Topics related to ratio analysis

Financial statements are prepared for the users of the financial statements to provide relevant information for their decision-making needs. Users read and analyse this financial information before making decisions. Financial ratio analysis is the one of the main tools to analyse the financial statements.  In this section, we’ll explain ratio analysis in detail covering a wide range of commonly used financial ratios.

Following posts are included in this section:

  1. What is ratio analysis?
  2. Benefits and limitations of ratio analysis
  3. Profitability ratios
  4. Gross profit margin
  5. Operating profit margin
  6. EBITDA margin
  7. Net profit margin
  8. Cost to sales ratio
  9. Return on capital employed
  10. Return on assets
  11. Return on equity
  12. Efficiency ratios
  13. Inventory turnover
  14. Inventory days
  15. Trade receivables turnover
  16. Trade receivables days
  17. Trade payables turnover
  18. Trade payables days
  19. Cash cycle (Working capital cycle)
  20. Liquidity ratios
  21. Current ratio
  22. Quick ratio
  23. Cash ratio
  24. Solvency ratios
  25. Debt-to-equity ratio (gearing ratio)
  26. Debt-to-assets ratio (debt ratio)
  27. Interest coverage ratio
  28. Investors’ ratios
  29. Earnings per share
  30. Price-to-earnings ratio
  31. Price-to-book ratio
  32. Price-to-cash flow ratio
  33. Dividend yield
  34. Dividend payout ratio