By Level

Pick a Level to Browse Its Ratios

Each level builds on the previous one — intermediate includes beginner ratios, advanced includes everything.

Liquidity Ratios

Measure the entity's ability to meet its short-term obligations.

Current Ratio = Current Assets ÷ Current Liabilities
Quick Ratio = (Current Assets − Inventory) ÷ Current Liabilities

Inventory Management Ratios

Measure the entity's efficiency in managing and moving inventory.

Inventory Turnover = COGS ÷ Average Inventory Average Inventory = (Beginning + Ending) ÷ 2
Days Sales in Inventory = 365 ÷ Inventory Turnover

Receivables & Collection Ratios

Measure success in collecting debts from customers.

Receivables Turnover = Net Credit Sales ÷ Average Accounts Receivable
Days Sales Outstanding (DSO) = 365 ÷ Receivables Turnover

Profitability Ratios

Measure the entity's ability to generate profits relative to sales.

Gross Profit Margin = (Gross Profit ÷ Net Sales) × 100
Net Profit Margin = (Net Profit ÷ Net Sales) × 100

Financial Structure Ratios

Measure reliance on debt to finance assets.

Debt Ratio = (Total Liabilities ÷ Total Assets) × 100
Debt-to-Equity Ratio = Total Liabilities ÷ Total Equity

Advanced Liquidity Ratios

Measure ability to meet obligations in the most stringent conditions and shortest timeframes.

Cash Ratio = Cash & Equivalents ÷ Current Liabilities Pay obligations immediately using only available cash.

Detailed Inventory Management Ratios

Used in industrial companies to monitor production flow.

Raw Materials Turnover = Cost of RM Consumed ÷ Average RM Inventory
Finished Goods Turnover = COGS ÷ Average Finished Goods Inventory

Payables & Liquidity Management Ratios

Focus on time as much as money — analyzing the temporal relationship between purchasing, selling, and collection.

Payables Turnover = Net Credit Purchases ÷ Average Accounts Payable
Cash Conversion Cycle (CCC) = (DSO + DSI) − DPO Lower cycle = higher efficiency in liquidity management.

Operating Profitability Ratios

Isolate operating performance from financial performance.

Operating Profit Margin (EBIT) = (Operating Profit ÷ Net Sales) × 100
EBITDA Margin = (EBITDA ÷ Net Sales) × 100

Asset Efficiency & Financing Ratios

Measure asset utilization efficiency and ability of profits to protect financing structure.

Fixed Asset Turnover = Net Sales ÷ Net Fixed Assets
Interest Coverage = Operating Profit (EBIT) ÷ Interest Expense
Return on Assets (ROA) = (Net Profit ÷ Average Total Assets) × 100

Advanced Profitability & Return Ratios

Focus on efficiency of utilizing equity and invested capital.

Return on Equity (ROE) = (Net Profit ÷ Average Equity) × 100
Return on Invested Capital (ROIC) = NOPAT ÷ Invested Capital Invested Capital = Interest-Bearing Debt + Equity.

Investment Valuation & Value Creation Ratios

Measure whether the company generates profits exceeding its cost of capital.

Economic Value Added (EVA) = NOPAT − (Invested Capital × WACC)
Market Value Added (MVA) = Market Value of Shares − Book Value of Equity

Cash Flow & Growth Ratios

Evaluate real liquidity from operations and the ability to self-expand without external financing.

Free Cash Flow (FCF) = Operating Cash Flow − Capital Expenditure
Sustainable Growth Rate (SGR) = ROE × Retention Ratio Maximum growth rate without needing external financing.

Leverage & Efficiency Ratios

Measure sensitivity of profits to changes in sales volume or fixed costs.

Degree of Operating Leverage (DOL) = Contribution Margin ÷ Operating Profit (EBIT) Impact of sales changes on operating profit.
Degree of Financial Leverage (DFL) = Operating Profit (EBIT) ÷ Earnings Before Tax (EBT) Impact of debt and interest on EPS.
Asset Productivity = Total Revenue ÷ Total Assets

Apply These Ratios in a Real Simulation

Every ratio above is embedded in Accounting Lab scenarios — no memorization, real application.