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

Study Sheet of Asset Management Ratios

With this printable Smartacus Study Sheet, you can learn all about ratios like Days Sales Outstanding (DSO), Fixed Asset Turnover, Total Asset Turnover, and Inventory Turnover. Continue reading

Study Sheet of Debt Management Ratios

Learn about Debt Ratio, Debt to Equity Ratio, EBITDA Coverage Ratio, Equity Multiplier, and TIE Ratio with this printable Smartacus Study Sheet. Continue reading

Study Sheet of Liquidity Ratios

Learn about liquidity ratios (current ratio and quick ratio) using this printable Smartacus Study Sheet. Continue reading

TIE Ratio

The TIE Ratio shows the ability to pay interest charges out of earnings. (TIE stands for times interest earned.) This interactive tutorial walks you through the calculations, including where to find the numbers on the financial statements. Continue reading

Equity Multiplier

The equity multiplier ratio is the factor by which assets grew from the use of debt. This interactive tutorial walks you through the calculations, including where to find the numbers on the financial statements. Continue reading

EBITDA Coverage

The EBITDA coverage ratio shows if earnings are able to satisfy all financial obligations including leases and principal payments. (EBITDA is short for earnings before interest, taxes, depreciation, and amortization.) This interactive tutorial walks you through the calculations, including where to find the numbers on the financial statements. Continue reading

Debt to Equity Ratio

The debt to equity ratio indicates how much of a company’s financing is provided through debt as compared to equity. This interactive tutorial walks you through the calculations, including where Total Assets and Total Liabilities are on the Balance Sheet. Continue reading

Debt Ratio

The debt ratio indicates how much of a company’s assets are provided through debt. This is the proportion of funding that is provided by creditors. This interactive tutorial walks you through the calculations, including where Total Assets and Total Liabilities are on the Balance Sheet. Continue reading

Return on Equity Du Pont

Return on equity (ROE) measures profitability related to ownership. Management at Du Pont came up with Return on Equity (Du Pont), an approach that showed that return on equity depends on ROA and the equity multiplier. This interactive tutorial explains the concept by walking you through the calculations, including where to find the numbers on the financial statements. Continue reading