Calculate and analyze key financial ratios for business evaluation, investment decisions, and financial health assessment.
Comprehensive ratio analysis with industry comparison and visualization
Measure a company's ability to generate earnings
Measure a company's ability to meet short-term obligations
Measure a company's ability to meet long-term obligations
Measure how effectively a company uses its assets
Based on the calculated ratios, this company demonstrates strong profitability with above-average gross margin (40.0% vs industry 35.0%) and ROE (18.2% vs industry 15.0%). The company's solvency position is excellent with a low debt-to-equity ratio of 0.6.
Areas for improvement: The quick ratio (1.2) and cash ratio (0.3) indicate potential liquidity concerns. The receivables turnover (4.2) is significantly below industry average (8.0), suggesting the company may be too lenient with credit terms or inefficient in collecting payments.
Recommendations:
| Ratio | Your Value | Industry |
|---|---|---|
| Gross Margin | 40.0% | 35.0% |
| Net Margin | 15.0% | 18.0% |
| Current Ratio | 2.5 | 2.0 |
| Debt to Equity | 0.6 | 1.0 |
| ROE | 18.2% | 15.0% |
Gross Margin: Measures percentage of revenue remaining after COGS. Above 40% is excellent.
Net Margin: Percentage of revenue remaining as profit after all expenses. Varies by industry.
ROE: Return on equity measures profit generated with shareholders' money. Above 15% is good.
Current Ratio: Ability to pay short-term debts. Ideal range: 1.5-3.0.
Quick Ratio: More conservative than current ratio (excludes inventory). Should be >1.0.
Cash Ratio: Most conservative liquidity measure. Should be >0.5.
Debt to Equity: Compares total debt to shareholders' equity. Lower is better.
Interest Coverage: Ability to pay interest expenses. Should be >3.0.