Small Business Ratio Calculators

Understanding the financial dynamics of your business is critical. Various ratios are often used to evaluate how different parts of your income statement and balance sheet relate to each other. These ratios are useful "snapshots" of your business, but there is also great value in seeing how they change over time. Here is a worksheet so you can monitor them.

Liquidity Measures

Current ratio - Probably the most common calculation used to measure liquidity. Quick ratio - Like the current ratio but with more limited definitions of assets and liabilities. Cash ratio - Like the others with even more restrictive definitions of assets and liabilities.

Accounts Receivable Measures

Collection period - How long does it take customers to pay you. Bad debt expense - Measures the expected uncollectibility on credit sales.

Inventory Measures

Inventory turnover - How effectively funds invested in inventory are converted into sales revenue. Days of sales in inventory - Expresses turnover in days.

Profitability Measures

Gross margin - The relationship between net sales and cost of goods sold. Return on sales - The net income earned for each dollar of sales. Return on assets - Your company's ability to use its assets to create profits. Return on equity - The return on the shareholders investment in the business.

Financial Strength Measures

Debts to assets - The leverage used in your business. Debt to equity - The most common measure of capital structure. Interest coverage ratio - Your company's capacity to meet interest payments.

Other Calculators

Business start up costs - Understand how much money you will need during the start up phase and when you will need it. Comparing loan options - Find the type and term of loan that fits your needs.