# Ratio Analysis

Ratios used in financial analysis compare companies to or within an industry. We have listed groups of commonly used ratios with links to examples, explanations, and formulas. Continue reading

# Total Asset Turnover Ratio

The total assets turnover ratio measures the use of all assets in terms of sales, by comparing sales with net total assets. This interactive tutorial walks you through the calculations as well as where on the financial statements to find the numbers. Continue reading

# Inventory Turnover Ratio

The inventory turnover ratio compares sales to inventories, reflecting a company’s ability to convert inventory into cash. This interactive tutorial walks you through the calculations, and shows you where to find the numbers of your financial statements. Continue reading

# Fixed Assets Turnover Ratio

The fixed assets turnover ratio measures how fixed assets are used to generate sales, by comparing sales to net fixed assets. This interactive tutorial walks you through the calculations as well as where to find the numbers on your financial statements. Continue reading

# Days Sales Outstanding or DSO

The days sales outstanding ratio (DSO) gives an indication of how long it takes to collect accounts receivables, comparing outstanding receivables to average daily sales. This tutorial walks you through the calculation as well as where on the financial statements you’d find the numbers. Continue reading

# Profitability Ratios Cramlet Series Review

Most of us (with the exception of majors and those who love to work with numbers) won’t take Finance unless we have to. We reluctantly wade through the classes hoping that the number junkies understand it all, and praying that Continue reading

# Ratio Analysis: Concept and Limitations

Dear Professor Cram: Can you explain to me the concept of ratio analysis and the limitations of ratio analysis? Thanks! Ken S., Hong Kong Thanks for your question, Ken. In Finance, ratio analysis is generally used to compare the performance Continue reading