| | Financial Ratios | Meaning | Formula |
| 1 | Working Capital | Working capital is defined as the difference between current assets and current liabilities. Current assets are the most liquid of your assets, meaning they are cash or can be quickly converted to cash. Current liabilities are any obligations due within one year. | Working Capital = Current Assets - Current Liabilities |
| 2 | Current ratio | A liquidity ratio that measures a company's ability to pay short-term obligations. | Current Ratio = Current Assets/Current Liabilities |
| 3 | Acid-test ratio | An acid test ratio, also referred as quick ratio calculator performs the calculation to know whether the company will be able to meet its current liabilities with the short term assets it has. | ATR = (Cash + Accounts Receivable + Short-term Investments) / Current Liabilities. |
| 4 | Accounts receivable turnover | Accounts receivable turnover is the number of times per year that a business collects its average accounts receivable. |
| 5 | Number of days’ sales in receivables | The days' sales in accounts receivable ratio (DSO), also known as the number of days of receivables, tells you the average number of days it takes to collect an account receivable. | DSO ratio = accounts receivable / average sales per day |
| 6 | Inventory turnover | The Inventory turnover is a measure of the number of times inventory is sold or used in a time period such as a year. |
| 7 | Number of days’ sales in inventory | The calculation of the days' sales in inventory is: the number of days in a year (365 or 360 days) divided by the inventory turnover ratio. |
| 8 | Total asset turnover | The amount of sales or revenues generated per dollar of assets. The Asset Turnover ratio is an indicator of the efficiency with which a company is deploying its assets | Asset Turnover = Sales or Revenues/Total Assets |
| 9 | Debt to Equity ratio | The debt-equity ratio is another leverage ratio that compares a company's total liabilities to its total shareholders' equity. |
| 10 | Number of times interest charges earned | The times interest earned ratio, sometimes called the interest coverage ratio, is a coverage ratio that measures the proportionate amount of income that can be used to cover interest expenses in the future. |
| 11 | Profit margin | The profit margin is an accounting measure designed to gauge the financial health of a business or industry. |
| 12 | Rate earned on total assets | Return on assets is the ratio of annual net income to average total assets of a business during a financial year. It measures efficiency of the business in using its assets to generate net income. It is a profitability ratio. | Return on assets |
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financial_ratio_analysis.xlsx
