Advanced Financial Ratios Calculator

Analyze company performance with comprehensive financial ratio analysis

Financial Data Input

Total Revenue/Sales ($)

Cost of Goods Sold ($)

Gross Profit ($)

Operating Expenses ($)

Operating Income ($)

Interest Expense ($)

Taxes ($)

Net Income ($)

Cash & Equivalents ($)

Accounts Receivable ($)

Inventory ($)

Total Current Assets ($)

Fixed Assets ($)

Total Assets ($)

Accounts Payable ($)

Short-Term Debt ($)

Total Current Liabilities ($)

Long-Term Debt ($)

Total Liabilities ($)

Total Equity ($)

Operating Cash Flow ($)

Investing Cash Flow ($)

Financing Cash Flow ($)

Net Cash Flow ($)

Capital Expenditures (CapEx) ($)

Dividends Paid ($)

Current Share Price ($)

Shares Outstanding

Market Capitalization ($)

Earnings Per Share (EPS) ($)

Dividend Per Share ($)

Beta (Volatility Measure)

Industry Benchmark Selection

Select Industry

Time Period Analysis

Analysis Period

Liquidity Ratios

Measure a company’s ability to pay off its short-term obligations

Current Ratio

3.00

Current Assets / Current Liabilities

Industry Avg: 2.50 +20%

The company has strong short-term liquidity, well above industry average.

Quick Ratio (Acid-Test)

1.80

(Current Assets – Inventory) / Current Liabilities

Industry Avg: 1.40 +29%

Strong ability to meet short-term obligations without relying on inventory sales.

Cash Ratio

1.00

Cash & Equivalents / Current Liabilities

Industry Avg: 0.80 +25%

Excellent cash position to cover current liabilities.

Operating Cash Flow Ratio

1.20

Operating Cash Flow / Current Liabilities

Industry Avg: 1.10 +9%

Strong operating cash flow to cover short-term obligations.

Solvency Ratios

Measure a company’s ability to meet its long-term obligations

Debt-to-Equity Ratio

0.67

Total Debt / Total Equity

Industry Avg: 0.85 -21%

Conservative capital structure with lower debt than industry peers.

Debt-to-Assets Ratio

0.40

Total Debt / Total Assets

Industry Avg: 0.45 -11%

Lower reliance on debt financing compared to industry average.

Interest Coverage Ratio

8.00

EBIT / Interest Expense

Industry Avg: 6.50 +23%

Strong ability to cover interest payments from operating earnings.

Equity Ratio

0.60

Total Equity / Total Assets

Industry Avg: 0.55 +9%

Higher proportion of assets financed by equity than industry average.

Profitability Ratios

Measure a company’s ability to generate profits

Gross Profit Margin

40.0%

Gross Profit / Revenue

Industry Avg: 38.5% +3.9%

Strong pricing power or cost control compared to industry.

Operating Profit Margin

20.0%

Operating Income / Revenue

Industry Avg: 18.2% +9.9%

Efficient operations with better cost management than peers.

Net Profit Margin

13.5%

Net Income / Revenue

Industry Avg: 12.0% +12.5%

Strong bottom-line performance relative to industry.

Return on Assets (ROA)

13.5%

Net Income / Total Assets

Industry Avg: 10.8% +25%

Efficient use of assets to generate profits.

Return on Equity (ROE)

22.5%

Net Income / Shareholder’s Equity

Industry Avg: 18.5% +21.6%

Excellent return on shareholder investment.

Return on Capital Employed (ROCE)

18.2%

EBIT / (Total Assets – Current Liabilities)

Industry Avg: 15.5% +17.4%

Efficient use of capital to generate returns.

Efficiency Ratios

Measure how effectively a company utilizes its assets

Asset Turnover Ratio

1.00

Revenue / Total Assets

Industry Avg: 0.90 +11%

Efficient use of assets to generate sales.

Inventory Turnover

3.33

COGS / Average Inventory

Industry Avg: 3.80 -12%

Slower inventory turnover than industry peers.

Receivables Turnover

8.33

Revenue / Average Accounts Receivable

Industry Avg: 7.50 +11%

Efficient collection of receivables.

Payables Turnover

6.67

COGS / Average Accounts Payable

Industry Avg: 7.20 -7%

Slower payment to suppliers than industry average.

Market Ratios

Measure market perception and valuation of a company

Price-to-Earnings (P/E) Ratio

18.89

Share Price / EPS

Industry Avg: 22.50 -16%

Potentially undervalued compared to industry peers.

Price-to-Book (P/B) Ratio

4.25

Market Cap / Book Value

Industry Avg: 3.80 +12%

Slightly higher valuation relative to book value than industry.

Dividend Yield

1.18%

Dividend Per Share / Share Price

Industry Avg: 1.50% -21%

Lower dividend yield than industry average.

Earnings Yield

5.29%

EPS / Share Price

Industry Avg: 4.44% +19%

Higher earnings yield than industry peers.

Comprehensive Financial Analysis

Overall assessment of company financial health

DuPont Analysis

ROE 22.5%

Profit Margin 13.5%

Asset Turnover 1.00

Equity Multiplier 1.67

ROE is driven primarily by strong profit margins rather than financial leverage.

Altman Z-Score

3.85

Distress Zone (< 1.81)

Gray Zone (1.81 – 2.99)

Safe Zone (> 2.99)

3.85

Company is in the safe zone with low bankruptcy risk.

Financial Health Score

82/100

Liquidity 90

Solvency 85

Profitability 88

Efficiency 75

Market 80

SWOT Analysis

Strengths

Strong profitability margins
Healthy liquidity position
Conservative debt levels

Weaknesses

Below average inventory turnover
Lower dividend yield than peers

Opportunities

Potential to increase financial leverage
Room for operational efficiency improvements

Threats

Industry competition affecting margins
Economic cycles impacting sales

Financial Ratio Explanations

Liquidity Ratios

Current Ratio: Measures short-term debt-paying ability. Higher is generally better.
Quick Ratio: More conservative than current ratio; excludes inventory.
Cash Ratio: Most conservative liquidity measure; cash and equivalents only.

Solvency Ratios

Debt-to-Equity: Measures financial leverage. Lower values suggest less risk.
Interest Coverage: Ability to pay interest expenses from operating earnings.

Profitability Ratios

Gross Margin: Profitability after direct production costs.
Net Margin: Overall profitability after all expenses.
ROA & ROE: Return generated on assets and equity investment.

Efficiency Ratios

Asset Turnover: How efficiently assets generate sales.
Inventory Turnover: How quickly inventory is sold and replaced.

Market Ratios

P/E Ratio: How much investors pay for each dollar of earnings.
P/B Ratio: Market valuation relative to book value.

Industry Benchmark Standards

Ratio	Technology	Healthcare	Financial Services	Consumer Goods	Industrial
Current Ratio	2.0 – 3.0	1.8 – 2.5	1.1 – 1.5	1.5 – 2.0	1.3 – 1.8
Debt-to-Equity	0.5 – 0.8	0.6 – 0.9	2.0 – 4.0	0.7 – 1.0	0.8 – 1.2
Gross Margin	50% – 70%	60% – 75%	N/A	40% – 50%	30% – 40%
Net Margin	10% – 20%	12% – 18%	15% – 25%	8% – 12%	6% – 10%
ROE	15% – 25%	15% – 20%	10% – 15%	12% – 18%	10% – 15%
P/E Ratio	20 – 30	18 – 25	10 – 15	15 – 20	12 – 18

Note: Benchmarks vary by company size, geographic location, and economic conditions. These are general guidelines.

How to Interpret Financial Ratios

Context Matters

Ratios should be interpreted in the context of industry norms, company size, business model, and economic conditions. A “good” ratio in one industry may be “poor” in another.

Trend Analysis

Examining ratios over time is often more meaningful than a single point-in-time analysis. Improving trends are generally positive, while deteriorating trends may signal problems.

Comparative Analysis

Compare ratios against industry peers and competitors to assess relative performance. Significant deviations from industry norms warrant further investigation.

Ratio Interrelationships

Ratios don’t exist in isolation. For example, high profitability with low liquidity may indicate potential cash flow problems despite strong earnings.

Qualitative Factors

Quantitative ratios should be supplemented with qualitative analysis of management quality, competitive position, industry dynamics, and economic factors.

Limitations of Financial Ratio Analysis

Accounting Differences

Different accounting methods (FIFO vs. LIFO inventory, depreciation methods) can distort comparisons between companies.

Window Dressing

Companies may engage in short-term actions to make ratios appear more favorable at reporting dates.

Historical Data

Ratios are based on historical financial statements and may not reflect current or future conditions.

Inflation Effects

Inflation can distort balance sheet values, affecting ratios like ROA and debt-to-equity.

Non-Financial Factors

Ratios don’t capture important qualitative factors like management quality, brand strength, or employee satisfaction.

Industry Specificity

Some industries have unique characteristics that make standard ratio analysis less meaningful.

Recommendation: Use ratio analysis as one tool in a comprehensive financial analysis toolkit, not as the sole basis for decisions.