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There are various financial ratios that can help you to assess where to invest your money. A combination of different ratios may help you see the wider picture and help you to decide, if you want to, how to achieve the greatest gain with the lowest risk.

Some of these ratios would include: return on capital employed, payback period, gearing, stock turn, debtor days, etc etc

Ideally you should examine a range of ratios, taking into account also your own attitude to risk.

In addition to considering financial ratios, one should also carefully consider the calibre of the management, the history of the company and their success in quickly adapting to changing economic realities. You should also consider future expectations of the market you are investing in, and your target company's place in that market. And you should assess the competition, and the global economy, and the environment, politically and 'environmentally', in which the business currently operates, and the environment it which it will have to operate in the foreseeable future.

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Q: Which financial ratio analysis will you use to determine where to invest your money?
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