CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78.1% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

What is Jaws ratio?

Jaws ratio

The Jaws ratio is a measure in finance used to demonstrate the extent to which a trading entity's income growth rate exceeds its expenses growth rate. Strictly speaking, the ratio is not expressed in usual ratio format, but rather as a percentage.

Where have you heard about Jaws ratio?

Jaws ratio is a useful measuring tool for any business and is often made public. For example, in early 2017, it was reported that the Standard Bank Namibia (SBN) Holdings group experienced a negative Jaws ratio of 2%.

What you need to know about Jaws ratio.

A larger Jaws ratio (or percentage) would be good news for a trading entity, showing signs that more income is being generated and that the entity's profitability and profitability growth rate is increasing. However, the Jaws ratio may sometimes be expressed as a negative percentage. In this case, it would be a sign of eroding profitability and would therefore be cause for concern for the owners/management of a trading entity. The jaws ratio is calculated by subtracting the expense growth rate from the income growth rate.

Related Terms

Latest video

Latest Articles

View all articles

Still looking for a broker you can trust?

Join the 580.000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading