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Small business ratio calculators


Why ratios matter

A financial ratio is a simple mathematical comparison of two or more entries from a company's financial statements. Business owners and managers use ratios to chart a company's progress, uncover trends and point to potential problem areas in a business. Bankers and investors look at a company's ratios when they are trying to decide if they want to lend you money or invest in your company.

Ratios provide insight into every financial element in your company, from its profitability to the effectiveness of your accounts receivable department. We've put together calculators for some of the most commonly used business ratios.

When you compare today's ratios to last year's or a compilation of several years' records, it can help you chart your progress and plan for the future.

Once compiled, you can also use ratios to compare your company's performance with others within your industry. You'll find industry comparisons in publications such as Robert Morris' Annual Statement Studies, the Almanac of Business and Industrial Financial Ratios (published by Prentiss Hall) or key business ratios, published by Dun & Bradstreet.

The calculators

Current ratio calculator -- measures your company's liquidity and ability to pay short-term debts by comparing current assets to current liabilities.
Quick ratio calculator -- another liquidity ratio, commonly called the "acid test." It compares current assets, less inventory, to current liabilities to determine how readily you can convert to cash to pay current obligations.
Debt to assets ratio calculator -- measures how much a company relies on borrowing to finance operations, an important ratio if you're interested in getting a loan.
Return on assets calculator -- measures how much income is generated by assets.
Gross profit margin calculator -- measures the amount of each dollar that can go for overhead and profit.
Operating profit percentage calculator -- measures the profitability of your core business.


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