Financial Ratio Calculator

Analyze your financial performance with comprehensive ratio calculations. Evaluate liquidity, profitability, leverage, and efficiency metrics instantly.

Calculate Financial Ratios

📊 Liquidity Ratios

Current Assets ($)

Current Liabilities ($)

Inventory ($)

💰 Profitability Ratios

Net Income ($)

Total Revenue ($)

Total Assets ($)

Shareholders' Equity ($)

⚖️ Leverage Ratios

Total Debt ($)

Total Equity ($)

Total Assets ($)

🔄 Efficiency Ratios

Cost of Goods Sold ($)

Average Inventory ($)

Accounts Receivable ($)

Total Sales ($)

Understanding Financial Ratios

Financial ratios are powerful analytical tools that help investors, creditors, and managers evaluate a company's financial performance and position. By comparing different financial statement items, these ratios provide valuable insights into liquidity, profitability, leverage, and operational efficiency.

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Liquidity Analysis

Evaluate your company's ability to meet short-term obligations with current and quick ratios.

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Profitability Metrics

Measure profit margins, return on assets, and return on equity to assess earning capacity.

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Leverage Assessment

Analyze debt levels and financial risk with debt-to-equity and debt-to-assets ratios.

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Efficiency Tracking

Monitor inventory turnover and receivables management for operational optimization.

Key Financial Ratio Categories

Liquidity Ratios

Liquidity ratios measure a company's ability to pay off short-term debts and obligations. These ratios are crucial for assessing financial stability and operational efficiency.

Current Ratio: Current Assets ÷ Current Liabilities - Measures ability to pay short-term obligations
Quick Ratio (Acid Test): (Current Assets - Inventory) ÷ Current Liabilities - More stringent liquidity measure
Cash Ratio: Cash and Cash Equivalents ÷ Current Liabilities - Most conservative liquidity measure

Profitability Ratios

Profitability ratios evaluate a company's ability to generate profit relative to revenue, assets, equity, and other financial metrics. These ratios are essential for investors and stakeholders.

Net Profit Margin: Net Income ÷ Total Revenue - Shows percentage of revenue retained as profit
Return on Assets (ROA): Net Income ÷ Total Assets - Measures efficiency in using assets
Return on Equity (ROE): Net Income ÷ Shareholders' Equity - Shows returns generated on shareholders' investment
Gross Profit Margin: (Revenue - COGS) ÷ Revenue - Indicates pricing strategy effectiveness

Leverage Ratios

Leverage ratios, also known as solvency ratios, measure the degree to which a company uses debt financing. These ratios help assess financial risk and stability.

Debt-to-Equity Ratio: Total Debt ÷ Total Equity - Compares debt financing to equity financing
Debt-to-Assets Ratio: Total Debt ÷ Total Assets - Shows proportion of assets financed by debt
Equity Multiplier: Total Assets ÷ Total Equity - Measures financial leverage

Efficiency Ratios

Efficiency ratios, also called activity ratios, measure how effectively a company uses its assets and manages its operations to generate revenue.

Inventory Turnover: Cost of Goods Sold ÷ Average Inventory - Measures inventory management efficiency
Receivables Turnover: Net Credit Sales ÷ Average Accounts Receivable - Shows collection efficiency
Asset Turnover: Net Sales ÷ Average Total Assets - Measures asset utilization efficiency

How to Use This Financial Ratio Calculator

Our comprehensive financial ratio calculator is designed to simplify complex financial analysis. Follow these simple steps to get detailed insights into your financial performance:

Input Financial Data: Enter your financial figures in the appropriate fields for each ratio category
Select Ratio Category: Choose from liquidity, profitability, leverage, or efficiency ratios based on your analysis needs
Calculate Results: Click the calculate button to instantly generate multiple ratios within each category
Interpret Results: Review the calculated ratios and compare them with industry benchmarks
Make Decisions: Use the insights to make informed financial and operational decisions

Benefits of Financial Ratio Analysis

Performance Benchmarking: Compare your company's performance against industry standards and competitors
Trend Analysis: Track financial performance over time to identify patterns and trends
Investment Decisions: Make informed investment choices based on comprehensive financial metrics
Credit Assessment: Evaluate creditworthiness and loan eligibility with key financial ratios
Strategic Planning: Develop business strategies based on financial strengths and weaknesses
Risk Management: Identify potential financial risks and take proactive measures
Stakeholder Communication: Present clear financial insights to investors, lenders, and management

Industry Applications

Financial ratio analysis is valuable across various industries and business contexts:

Corporate Finance: Internal financial planning and performance evaluation
Investment Banking: Due diligence and valuation analysis
Credit Analysis: Loan underwriting and credit risk assessment
Equity Research: Stock analysis and investment recommendations
Management Consulting: Business performance improvement strategies
Small Business: Financial health monitoring and growth planning