I remember when I started serious investing about 2 years ago, it was an absolutely daunting task to dissect the financial reports and sieve out relevant financial indicators and ratios to help me in my analysis, as there were simply too many financial ratios out there!

Lets do a quick gauge: PE, PB, PEG, P/NTA, ROA, ROE, Current Ratio, Quick Ratio, Debt/Equity, Debt/Assets, Dividend Payout Ratio, Price/Sales, Assets Turnover, Gross Margin, Operating Margin, Net Margin, EBITDA Margin, Dividend Yield, Free Cash Flow Yield, Cash Conversion Cycle, Inventory Turnover, Receivables Turnover etc.

Which one do I use? Which one is important? Which one is relevant? I can vividly remember the confusion and frustration I felt back then.

As I tried calculating ALL the ratios and studied them , I realised each  told me different things. A company may have very low PE, but is ROE is 3%. The other company may ......