Financial ratios are mathematical calculations used to analyze and evaluate a company's financial performance. They provide insights into a company's liquidity, efficiency, financial leverage, and profitability.
The Excel sheet includes income statement, balance sheet and performance level. The user will be able to input the data in the green cells only and the template will automatically calculate the financial ratios and evaluate the performance of each ratio based on the provided information. These ratios include liquidity ratios, efficiency ratios, financial leverage ratios, and profitability ratios.
The liquidity ratio measures the company’s ability to meet its short-term obligations and convert its assets into cash. They provide insight into the company’s liquidity, and its ability to pay off its current liabilities.
The liquidity ratio include:
Efficiency ratios measure a company's ability to use its assets and manage its liabilities effectively in the current period or in the short-term.
The efficiency ratio include:
- Days’ sales in receivables
- Days in inventory
- Days’ purchases in accounts payable
- Operating cycle
- Cash cycle
The leverage financial ratio is a measure of a company's debt levels and its ability to meet its financial obligations.
The leverage financial ratio include:
- Debt ratio
- Debt to equity ratio
- Interest coverage ratio
The profitability ratio is a financial ratio that measures a company's ability to generate profit relative to its revenue, assets, or equity.
The profitability ratio include:
- Gross margin ratio
- Net profit margin
- EBITDA Margin
- Return on assets ratio
- Return on equity ratio
The performance level needs to be updated based on industry.
If you have any inquiries, modifications, or would like to customize the model for your business, please reach out to us.