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Quick Ratio

This is a very similar ratio to the current ratio. The difference is that stocks or inventories are deducted from the current assets figure. This prov...

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Debt to Asset Ratio

This ratio measures the extent to which the assets of the business are funded by loans and other borrowings including trade creditors. Assets can be f...

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Current Ratio

This ratio measures the ability of the business to pay off all short-term debts and borrowings using the value of current assets (stocks or inventorie...

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Gross Profit Margin

This ratio is used mainly for manufacturing businesses or those that purchase and further develop materials for sale. It measures the value added to p...

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Return of Equity

This is a measure of the return that owners of the business make on their investment. In an owner owned business, it represents the rate at which prof...

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Debt to Equity Ratio

This ratio measures the extent to which the owners' equity (including retained earnings) is available to fund the debts of the business. It is usually...

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Return on Assets Employed

This measures how much profit is generated from using the assets of the business. One of the true skills of managing a business is to get the best use...

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Operating Profit Margin

This is similar to the gross profit margin, except it measures the extent to which the total sales figure is converted into profit after the normal co...

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Financial Ratios, Calculators and Impressing Investors

If your business is seeking to borrow funds or to find an investor who wants to invest in return for a share of the business, it is important that you...

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Profitability Ratios

Profitability is the ability of your company to generate earnings as compared to its expenses and other relevant costs incurred during a specific peri...

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Maximizing Your Income and Profits

At its simplest, to succeed, a business must bring in more than it spends. In other words, a business must make a regular surplus of cash to survive....

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Evaluating Your Investment Decisions

Before you begin to think about where the financing will come from, you will have to work out what you are going to do and how much it will be worth t...

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