Learn Financial Ratios from scratch

Learn how to calculate and interpret financial ratios from balance sheets, income statements, cash flow statements, and notes, with quick access to pre-calculated ratios on annual reports and finance platforms.

Explore liquidity ratios that gauge a company’s ability to meet short-term obligations, including the current ratio, quick ratio, and cash ratio using current assets, inventories, and marketable securities.

Explore leverage ratios that measure a company's debt financing, including debt to asset ratio, total assets and liabilities, interest coverage, and debt service coverage using operating income.

Explore profitability ratios that measure how efficiently a company generates profits from revenue, assets, and equity, including gross profit margin, net profit margin, return on assets, and invested capital.

Analyze activity ratios that reveal how efficiently a company uses assets to generate revenue. Cover inventory turnover, accounts receivable turnover, total asset turnover, and fixed asset turnover.

Explore market ratios used to evaluate company value and stock performance. Learn key metrics such as earnings per share, price-to-earnings, dividend yield, price-to-book, price-to-sales, and return on investment.

Explore how financial ratios assess a company’s performance, liquidity, leverage, profitability, and risk for managers, investors, lenders, regulators, and auditors, guiding strategy and audits.

Analyze liquidity and leverage through exercises on current and quick ratios, and debt to equity. Assess efficiency with ROE, ROA, inventory turnover, and accounts receivable turnover.

Learn to extract liquidity and leverage ratios from the balance sheet, including the current ratio and debt-to-equity, and assess liquidity risk and financing implications.

Explore the income statement's profitability measures—net profit margin 9.375%, gross profit margin 50%, operating margin 12.5%—and how earnings before interest and taxes inform strategy and investment.

Analyze the statement of cash flow through three indicators: the operating cash flow ratio, investment coverage ratio, and total financing coverage ratio, to assess liquidity and the financing of liabilities.

Learn how to interpret return on equity, dividend payout, and equity growth rate to assess how efficiently a company uses capital and grows shareholder value.