Option Value

What are my business financial ratios?

A regular review of your company's financial ratios can help you focus on areas that may need improvement. Liquidity, efficiency, and profitability ratios, compared with other businesses in your industry, can highlight any strengths and weaknesses you might have over your competition. It is also important to compare your ratios over time in order to identify trends.

Inputs

Assets and Liabilities

Income and Expenses

Cash and marketable securities($)

Account Receivables($)

Sales($)

Cost of goods sold($)

Inventory($)

Current assets($)

Gross profit($)

Operating expenses($)

Fixed assets($)

Current liabilities($)

SG&A expenses($)

Operating income($)

Long-term liabilities($)

Shareholder's equity($)

Investment income($)

Interest expense($)

Income before taxes($)

Taxes($)

Net income($)

Outputs

Liquidity Ratios

#	Formula	Value	Explanation
Current Ratio	current asset/current liability	0	The higher the ratio is, the more capable you are of paying off your debts. If your current ratio is low, it means you will have a difficult time paying your immediate debts and liabilities. In general, a current ratio of 2 or higher is considered good, and anything lower than 2 is a cause for concern.
Quick Ratio	(current assets - inventories) / current liabilities	0	The quick ratio communicates how well a company will be able to pay its short-term debts using only the most liquid of assets.

Activity Ratios

#	Formula	Explanation
Days sales in accounts receivable	accounts receivable * 365 / Sales	The days' sales in accounts receivable ratio (also known as the average collection period) tells you the number of days it took on average to collect the company's accounts receivable during the past year.
Days of payables outstanding	payables * 365 / cost of good sold	Days payable outstanding (DPO) is a financial ratio that indicates the average time (in days) that a company takes to pay its bills and invoices to its trade creditors, which may include suppliers, vendors, or financiers.
Days in Inventory	inventory * 365 / cost of good sold	In order to efficiently manage inventories and balance idle stock with being understocked, many experts agree that a good DSI is somewhere between 30 and 60 days.
Cash conversion cycle	Days sales in accounts receivable + Days in Inventory - Days of payables outstanding	Days payable outstanding (DPO) is a financial ratio that indicates the average time (in days) that a company takes to pay its bills and invoices to its trade creditors, which may include suppliers, vendors, or financiers.
Asset Turnover	sales / average total asset	The asset turnover ratio measures the efficiency of a company's assets in generating revenue or sales.

Profitability Ratios

#	Formula	Explanation
Profit margin	net income / sales	It is expressed as a percentage and measures how much of every dollar in sales or services that your company keeps from its earnings.
Gross margin	(sales - cost of goods sold) / sales	gross margin refers to a profitability measure that looks at a company's gross profit compared to its revenue or sales.
Return on assets	net income / average total assets	Return on assets (ROA) measures how efficient a company's management is in generating profit from their total assets on their balance sheet.

Debt Ratios

#	Formula	Value	Explanation
Debt to equity	total liabilities / total equity	0	A higher D/E ratio means the company may have a harder time covering its liabilities.
Total debt ratio	total liabilities / total assets	0	Generally speaking, a debt-to-equity or debt-to-assets ratio below 1.0 would be seen as relatively safe, whereas ratios of 2.0 or higher would be considered risky. Some industries, such as banking, are known for having much higher debt-to-equity ratios than others.