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Ratio Analysis
Using Your Financial Information
Is it more important to know what the numbers mean than how the numbers got there? Its an art to look at ratios and spot the weak areas on financial statements.

Good financial information and planning are vital for even the smallest company. Your operations should be built around monthly financial statements, budgets and of course your objectives.

You really don't want to run your business without the technical tools and advise you need. One thing your don't want to say is "I'll buy that equipment or service when I'm successful." You can build a high overhead business if you don't have the technical tools and advise you need.

Your financial statements are a reality check on how well your company is doing. They are the only real report card the company has. You need future savvy for your company financial future. If you own a business, you should personally understand and control the financial aspects of every decision. Halcolm Bard CPA and Their Consultants' can help you.


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  Various Ratio Analysis To Consider

Every business should look at its ratios and spot the weak areas on financial statements. There are various types of ratios to look at including the following to mentioned a few.


Analysis of Liquidity

Some examples are Current Ratio, Quick Ratio, Cash to Current Assets, Cash to Current Liabilities, Working Capital, Accounts Receivable Turnover, Inventory Turnover, and Liquidity Index.


Analysis of Cash Cycle

Some examples are Number of days to sell inventory, Daily Sales, Days Sales in Accounts Receivable, Daily Purchases, Days Purchases in Accounts Payable, and Days in Cash Cycle.

Analysis of Profitability

Some examples are Gross Margin Percentage, Operating Income Percentage, Net Income Percentage, Return on Assets, Return on Stockholder's Equity, and Return on Long-Term Debt and Stockholder's equity.

Analysis of Capital Structure

Some examples are Equity to Total Debt, Equity to Long-Term Debt, Total Debt to Total Capital, Times Interest Earned, Equity to Net Fixed Assets, Financial Leverage, and Equity Growth Rate.

Analysis of Asset Utilization

Some examples are Sales to Cash and Equivalents, Sales to Accounts Receivable, Sales to Inventory, Sales to Working Capital, Sales to Net Fixed Assets, and Sales to Total Assets

Links to
Ratio Analysis Selections