Financial Ratios

Liquidity Ratios

  • Current Ratio = Current Assets / Current Liabilities
  • Working Capital = Current Assets + Current Liabilities
  • Quick Ratio = (Current Assets – Inventories) / Current Liabilities

Activity Ratios

  • Working Capital Turnover = Revenue / (Current Assets + Current Liabilities)
  • Total Asset Turnover = Revenue / Total Assets
  • Accounts Receivable Turnover = Revenue / Accounts Receivable
  • Accounts Payable Turnover = Expenses / Accounts Payable
  • Inventory Turnover Ratio = Cost of Goods Sold / Inventory

Profitability Analysis Ratios

  • Net Profit Margin = Net Income / Revenue
  • Return on Assets = Net Income / Total Assets
  • Return on Equity = Net Income / Total Equity

Coverage Ratios

  • Debt Ratio = Total Liabilities / Total Assets
  • Equity Multiplier = Total Assets / Total Equity
  • Debt to Equity Ratio = Total Liabilities / Total Equity