A Simple Quality Ratio To Improve Investment Returns?

Use This Simple Quality Ratio To Improve Your Investment Returns by Tim du Toit, Quant Investing

What if I told you that there is a simple quality ratio you could use to increase your returns, irrespective of what investment strategy you follow?

The reality is you can, but before I show you how, first some background information.

External Finance Ratio

We first read about the External Finance Ratio (EFR) it in the excellent book by Richard Tortoriello called Quantitative Strategies for Achieving Alpha: The Standard and Poor's Approach to Testing Your Investment Choices (click the name to go to the Amazon page).

The ratio shows you if a company is able to finance investments from cash the business generated...