Financial Ratios - Bean Counter https://www.dwmbeancounter.com
 
 
 
 
 
 
 
 
 
 
 
 
 
Instructions
Enter the yearly amounts in the Balance Sheet and Income Statements
The ratios are automatically calculated
Note: The divide by zero error will correct when data is entered.
 
Comparative Balance Sheets PY3 PY2 PY1 CY
Cash 1500 1800 2200 2500
Marketable securities
Accounts receivable 3000 3500 4000 4200
Inventory 2500 2800 3200 3000
   Total current assets 7000 8100 9400 9700
Net fixed assets 10000 11000 12000 13000
Total assets 17000 19100 21400 22700
Accounts payable 2000 2300 2500 2700
Accrued liabilities 1000 1200 1500 1300
Notes payable
   Total current liabilities 3000 3500 4000 4000
Long-term debt 5000 5500 6000 6500
Capital 4000 4000 4000 4000
Retained earnings 5000 6100 7400 8200
   Total equity 9000 10100 11400 12200
Total liabilities and equity 17000 19100 21400 22700
Comparative Income Statements PY3 PY2 PY1 CY
Sales 25000 28000 30000
Cost of sales 15000 16500 17000
Gross profit 10000 11500 13000
Selling expenses
General and admin expenses 7000 7500 8000
Operating profit 3000 4000 5000
Interest expense 500 600 700
   Pre-tax income 2500 3400 4300
Income taxes  625 850 1075
Net income 1875 2550 3225
Short term liquidity
Current ratio
Measures the ability to pay current liabilities out of current assets.
  Current assets  8100 9400 9700
  / Current liabilities 3500 4000 4000
  = Current ratio 2.31 2.35 2.43
Quick ratio (Acid Test)
Measures the ability to pay current liabilities out of the most liquid of current assets.
  (Cash 1800 2200 2500
  + Marketable secrities 0 0 0
  + Accounts receivable) 3500 4000 4200
  / Current liabilities 3500 4000 4000
  = Quick ratio 1.51 1.55 1.68
Accounts receivable turnover
Measures the ability to collect from customers.
  Annual net credit sales 25000 28000 30000
  / Average net account receivables 3250 3750 4100
  = Accounts receivable turnover 7.69 7.47 7.32
Average collection period (Days Sales Outstanding)
Measures the average number of day that it takes to collect accounts receivable.
  365 days 365 365 365
  / Accounts receivable turnover 7.69 7.47 7.32
  = Average collection period (Days Sales Outstanding) 47.45 48.88 49.88
Inventory turnover
Measures the saleability of inventory.  Indicates the number of time inventory is sold or "turned" per year.
  Cost of goods sold 15000 16500 17000
  / Average inventory 2650 3000 3100
  = Inventory turnover 5.66 5.50 5.48
Days sales in inventory
Measures inventory levels based on days sales.
  365 days 365 365 365
  / Inventory turnover 5.66 5.50 5.48
  = Days sales in inventory 64.48 66.36 66.56
Inventory to net working capital
  Inventory 2800 3200 3000
  / Net working capital 4600 5400 5700
  = Inventory to net working capital 0.61 0.59 0.53
Long term solvency
Debt ratio
Indicates the percentage of assets financed with debt or liabilities
  Total liabilities 9000 10000 10500
  / Total assets 19100 21400 22700
  = Debt ratio 0.47 0.47 0.46
Times interest earned - income (interest coverage)
Measures the ability to pay interest out of profits.
  Net income before interest expense and taxes 3000 4000 5000
  / Interest expense 500 600 700
  = Times interest earned - income (interest coverage) 6.00 6.67 7.14
Times interest earned - cash flow (interest coverage)
Measures the ability to pay interest out of cash flow.
  Cash flow from operations and interest 3300 4400 5500
  / Interest expense 500 600 700
  = Times interest earned - cash flow (interest coverage) 6.60 7.33 7.86
Total assets to equity
  Total assets 19100 21400 22700
  / Total stockholders equity 10100 11400 12200
  = Total assets to equity 1.89 1.88 1.86
Total liabilities to total assets
  Total liabilities 9000 10000 10500
  / Total assets 19100 21400 22700
  = Total liabilities to total assets 0.47 0.47 0.46
Total liabilities to equity
  Total liabilities 9000 10000 10500
  / Total stockholders equity 10100 11400 12200
  = Total liabilities to equity 0.89 0.88 0.86
Interest bearing debt to total assets
  Interest bearing debt 5500 6000 6500
  / Total assets 19100 21400 22700
  = Interest bearing debt to total assets 0.29 0.28 0.29
Interest bearing debt to equity
  Interest bearing debt 5500 6000 6500
  / Total equity 10100 11400 12200
  = Interest bearing debt to equity 0.54 0.53 0.53
Long term debt to long term capital
  Long term debt /  5500 6000 6500
  (Long term debt  5500 6000 6500
  + Total equity) 10100 11400 12200
  = Long term debt to long term capital 0.35 0.34 0.35
Profitability Ratios
Return on assets
Measures the effectiveness of assets used to produce profits.
  Net income 1875 2550 3225
  / Average total assets 18050 20250 22050
  = Return on assets 10.39% 12.59% 14.63%
Return on equity
Measures the profitibility of owners investments.
  Net income 1875 2550 3225
  / Average stockholders equity 9550 10750 11800
  = Return on equity 19.63% 23.72% 27.33%
Gross margin
  Gross profit 10000 11500 13000
  / Sales 25000 28000 30000
  = Gross margin % 40.00% 41.07% 43.33%
Operating margin
  Operating profit 3000 4000 5000
  / Sales 25000 28000 30000
  = Operating margin 12.00% 14.29% 16.67%
Profit margin
Measures the % of each $1 of revenue that is left over as profit.
  Net income 1875 2550 3225
  / Sales 25000 28000 30000
  = Profit margin 7.50% 9.11% 10.75%
Total asset turnover
Measures the efficiency of assets used to produce sales.
  Sales 25000 28000 30000
  / Average total assets 18050 20250 22050
  = Total asset turnover 1.39 1.38 1.36
Fixed assets turnover
Measures the efficiency of fixed assets used to produce sales.
  Sales 25000 28000 30000
  / Average fixed assets 10500 11500 12500
  = Fixed asset turnover 2.38 2.43 2.40
Current asset turnover
  Sales 25000 28000 30000
  / Average current assets 7550 8750 9550
  = Current asset turnover 3.31 3.20 3.14
DuPont Return on Investment
  Net income 1875 2550 3225
  / Average total assets 18050 20250 22050
  = Return on investment 10.39% 12.59% 14.63%
          or
  Net profit margin 0.08 0.09 0.11
  / Total asset turnover 1.39 1.38 1.36
  = Return on investment 10.39% 12.59% 14.63%
Modified DuPont - Return on Equity
  Net profit after tax 1875 2550 3225
  / Average stockholders equity 9550 10750 11800
  = Return on equity 19.63% 23.72% 27.33%
          or
  Average total assets 18050 20250 22050
  / Average equity 9550 10750 11800
  = Equity mutliplier 1.89 1.88 1.87
  x ROI 0.10 0.13 0.15
  = Return on equity 19.63% 23.72% 27.33%
Other Ratios
Accounts payable turnover
  Total purchases 16500 18000 18750
  / Average accounts payable 2150 2400 2600
  = Accounts payable turnover 7.67 7.50 7.21
Days purchases in accounts payable
  365 days 365 365 365
  / Account payable turnover 7.67 7.50 7.21
  = Days purchases in accounts payable 47.56 48.67 50.61
Days in Cash Operation Cycle
   Average collection period (Days Sales Outstanding) 47.45 48.88 49.88
  + Days sales in inventory 64.48 66.36 66.56
  - Days purchases in accounts payable -47.56 -48.67 -50.61
  = Days in Cash Operation Cycle 64.37 66.58 65.83