Financial Ratio Analyzer
Enter your company's key financial statement figures to instantly calculate liquidity, leverage, and profitability ratios: current ratio, quick ratio, debt-to-equity, net profit margin, ROA, and ROE.
How Are These Ratios Calculated? (Formulas)
Quick Ratio = (Current Assets − Inventory) ÷ Current Liabilities
Debt-to-Equity = Total Debt ÷ Total Equity
Net Profit Margin = (Net Profit ÷ Revenue) × 100
ROA = (Net Profit ÷ Total Assets) × 100
ROE = (Net Profit ÷ Total Equity) × 100
Benchmark Interpretation Guide
| Ratio | Good | Average | Poor |
|---|---|---|---|
| Current Ratio | 1.5 – 3.0 | 1.0 – 1.5 | Below 1.0 |
| Quick Ratio | 1.0 or above | 0.7 – 1.0 | Below 0.7 |
| Debt-to-Equity | Below 1.0 | 1.0 – 2.0 | Above 2.0 |
| Net Profit Margin | Above 10% | 5% – 10% | Below 5% |
Example Calculation
| Input | Value |
|---|---|
| Current Assets / Liabilities | ৳8,00,000 / ৳4,00,000 |
| Inventory | ৳2,00,000 |
| Total Debt / Equity | ৳6,00,000 / ৳10,00,000 |
| Revenue / Net Profit | ৳20,00,000 / ৳2,40,000 |
| Current Ratio | 2.0 (Good) |
| Quick Ratio | 1.5 (Good) |
| Net Profit Margin | 12% (Good) |
Definitions
Current Ratio: Measures a company's ability to pay short-term obligations using its current assets; a ratio above 1.0 generally indicates sufficient short-term liquidity.
Quick Ratio (Acid-Test Ratio): A stricter liquidity measure that excludes inventory from current assets, showing how well a company can meet short-term liabilities with its most liquid assets.
Debt-to-Equity Ratio: Compares total debt to shareholders' equity, indicating how much a company relies on borrowed funds versus owner capital.
Net Profit Margin: The percentage of revenue that remains as profit after all expenses, taxes, and costs are deducted.
Return on Assets (ROA): Measures how efficiently a company uses its total assets to generate profit.
Return on Equity (ROE): Measures how efficiently a company generates profit from shareholders' equity.
Frequently Asked Questions
What is a good current ratio?
A current ratio between 1.5 and 3.0 is generally considered good, indicating a company has enough current assets to comfortably cover its current liabilities.
What is the difference between current ratio and quick ratio?
The current ratio includes all current assets such as inventory, while the quick ratio excludes inventory, offering a stricter measure of a company's immediate liquidity.
What does a high debt-to-equity ratio mean?
A high debt-to-equity ratio means a company relies more heavily on debt than equity to finance its operations, which can increase financial risk, especially during downturns.
What is the difference between ROA and ROE?
ROA measures profit generated relative to total assets, while ROE measures profit generated relative to shareholders' equity; ROE is typically higher than ROA when a company uses debt financing.
Benchmark ranges are general industry guidelines and vary significantly by sector; always compare ratios against industry peers for meaningful analysis. This tool does not constitute financial advice.
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