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 Liquidity Ratios

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

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 Assets Du Pont

Return on assets (ROA) is a percentage of the after-tax income as compared to the total assets of the company. Management at Du Pont came up with Return on Assets (Du Pont), an approach that determines the impact of asset turnover and profit margin on profits. This interactive tutorial explains the concept by walking you through the calculations, including where to find the numbers on the financial statements. Continue reading

Return on Assets

Return on assets (ROA) is a percentage of the after-tax income as compared to the total assets of the company. This interactive tutorial explains the concept by walking you through the calculations, including where to find the numbers on the income statement and balance sheet. Continue reading

Current Ratio

This interactive tutorial explains the current ratio by walking you through the steps, including where to find Current Assets and Current Liabilities on the Balance Sheet. It even lets you use your own numbers, so you can check your homework answers! Continue reading