Ratio

Importance: 0.57

Is a company: no

Is a proper noun: no

Synonyms

  • gauge

Definition of Ratio

  1. A comparison of two figures used to evaluate business performance (e.g. debt/equity ratio and return on investment). It is a relation in degree or number between two similar things.

Related Terms and Acronyms

  • Gross Debt Service (GDS) Acronym, Very Important,
    • The total monthly mortgage (or rent) payments, property taxes, utilities and maintenance fees as a percentage of gross monthly income.
    Used by mortgage lender underwriters to determine one's ability to qualify for a mortgage loan.
  • Quick Liquidity Ratio Bank,
    • A metric used to find if a company has enough liquidity to make it's short term financial obligations.
  • Return on Assets (ROA) Bank,
    • A ratio that shows how profitable a company is when compared to its assets.
  • Loan-to-Value (LTV) Bank, Very Important,
    • The ratio of the principal amount of the loan to the lesser of the purchase price of the property or the property's appraised value. This can be expressed as an 80% loan, or 80% LTV.
    A widely used term in the mortgage brokerage and lending industry, especially by mortgage underwriters.
  • Return Bank,
    • Any increase in value or in income you earn on purchase or investment.
  • Return on Equity (ROE) Bank,
    • A ratio that shows how profitable a company is when compared to shareholder equity.
  • Qualifying Ratios Bank,
    • As calculated by lenders, the percentage of income that is spent on housing debt and combined household debt. The first qualifying ratio, called the gross debt service or GDS is up to and including a maximum of 32% of the combined gross family income. The second qualifying ratio is the Total debt service or TDS is up to and including 40% of gross income.
  • Debt/Equity Ratio Bank,
    • A comparison of debt and equity used to measure the health of a business.
  • Overall Liquidity Ratio Bank,
    • A method of determining how easily and quickly a company can sell off assets to pay off its debts.
  • Equity Bank,
    • The value of a property minus outstanding mortgage debt and other liens.
    • Ownership in an asset.
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