Financial Ratios
Company Analysis
Financial Ratios
A standard set of Financial Ratios are calculated for every financial statement you enter in the Financials section. These are over 40 ratios that capture how a financial analyst would evaluate the business.
To access go to Company Analysis then Click Financial Ratios
Ratio Categories
Profitability
The Profitability section displays Margin profitability ratios.
Profitability ratios are financial metrics used by analysts and investors to measure and evaluate the ability of a company to generate income (profit) relative to revenue, balance sheet assets, operating costs, and shareholders’ equity during a specific period of time. They show how well a company utilizes its assets to produce profit and value to shareholders.
Margin ratios represent the company’s ability to convert sales into profits at various degrees of measurement.
Examples are: gross profit margin, operating profit margin, net profit margin, cash flow margin, EBIT, EBITDA, EBITDAR, NOPAT, operating expense ratio, and overhead ratio.
Other Profitability Ratios are included in the Return Ratios section
Expense Analysis
Expense Ratios measure the business' expense line items against sales. The expense line items will come from the income statement that you setup in Financial Statements.
Assets Breakdown
The Assets section is a Common Size Analysis of the balance sheet assets. Each asset item is expressed as percent of total assets.
Liabilities
The Liabilities section is a Common Size Analysis of the balance sheet liabilities. Each asset item is expressed as percent of total liabilities.
Liquidity
Liquidity ratios are used to determine a debtor's ability to pay off current debt obligations without raising external capital. Liquidity ratios measure a company's ability to pay debt obligations and its margin of safety through the calculation of metrics including the current ratio, quick ratio and operating cash flow ratio.
Leverage
Leverage Ratios measure how much capital comes in the form of debt (loans), or assesses the ability of a company to meet its financial obligations. Leverage Ratios are important given that companies rely on a mixture of equity and debt to finance their operations, and knowing the amount of debt held by a company is useful in evaluating whether it can pay its debts off as they come due.
Asset Ratios
The Asset Ratios section displays Asset Utilization Ratios. Asset utilization ratios measure how efficient a business is at using its assets to make money. A business's receivables turnover, which is defined as its credit sales divided by the value of its accounts receivable from customers, indicates whether a business is able to turn the goods and services it sells into money that is available for other purposes. Inventory turnover is another asset utilization ratio, found by dividing the cost to produce the goods sold during a specified time period by the average value of the business's product inventory during that same time period.
Return Ratios
Return Ratios are a group of Profitability Ratios. Rate of Return ratios measure the gain or loss on an investment over a specified period of time.