Financial Ratios
Calculates major liquidity, profitability, and solvency ratios.
Inputs
The Ultimate Guide to Financial Ratios
Welcome to the EasyToolz Financial Ratio Calculator. Raw numbers on a balance sheet mean very little without context. Ratios provide that context by comparing two numbers to reveal the true health of a business.
What are Financial Ratios?
Financial ratios are mathematical relationships between different line items on financial statements. They allow analysts to evaluate a company's liquidity, profitability, efficiency, and solvency, and to easily compare a massive corporation against a small business on an even playing field.
The Four Pillars of Ratio Analysis
Our tool calculates the most critical metrics in corporate finance:
- Liquidity Ratios (e.g., Current Ratio): Measures if the company has enough cash to pay its short-term bills. (Current Assets / Current Liabilities).
- Profitability Ratios (e.g., Profit Margin): Measures how much of every dollar of sales translates into actual profit.
- Efficiency Ratios (e.g., Inventory Turnover): Measures how well the company manages its assets and inventory.
- Solvency Ratios (e.g., Debt-to-Equity): Measures the company's long-term financial stability and reliance on debt.
How to Use This Calculator
Simply select the ratio category you want to analyze, input the requested numbers from your balance sheet or income statement, and the tool will instantly output the ratio or percentage.
Frequently Asked Questions
What is a "good" Current Ratio?
A Current Ratio of 1.0 means you have exactly enough assets to cover your debts. A ratio between 1.5 and 2.0 is generally considered healthy. Anything below 1.0 indicates a high risk of bankruptcy.