Key ratio is the name given to any financial ratio that's considered particularly effective at measuring, illustrating, and summarizing a company's financials in relation to its competitors or peers.

Investors and companies rely on key ratios all the time to get a snapshot of liquidity, efficiency, profitability, and so forth. Each key ratio focuses on a particular aspect of the company, meaning it is often necessary to consult several of them to get a more complete idea of how the subject is faring.