Liquidity ratios are probably the most commonly used of all the business ratios. Your creditors may often be particularly interested in these because they show the ability of your business to quickly ... |
The current ratio is a way of looking at your working capital and measuring your short-term solvency. The ratio is in the format x:y, where x is the amount of all |
The quick ratio, also known as the acid test, serves a function that is quite similar to that of the current ratio. The difference between the two is that ... |
As a business owner/manager, you're concerned with making the best use of your assets and being a low-cost producer in your industry. You can determine how efficiently your business uses its assets, ... |
Inventory is the amount of merchandise, parts, supplies, or other goods your business keeps on hand to meet the demands of your customers. Depending on the nature of your business (i.e., retail, ... |
Accounts receivable represent sales for which payment has not yet been collected. If your business normally extends credit to its customers, the payment of accounts receivable is likely to be your ... |
Fixed asset turnover is the ratio of sales (on your income statement) to the value of your fixed assets (on ... |
The ratio of total sales (on your income statement) to total assets (on your balance sheet) indicates how well ... |
You can use another set of ratios to assess the profitability of your business and changes in its profit performance. These ratios are probably the most important indicators of your business's ... |
Your gross profit margin can be calculated with the following formula, using figures taken from your income statement: |
