Useful Business Ratios  
(Click on titles for clarification of formula usage. Click on arrows to view the formulas)                              

Short-term debt-paying ability
►Current ratio
►Quick ratio
►Cash ratio

Short-term liquidity ratios
►Average accounts receivable turnover
►Average days to collect accounts receivable
►Average inventory turnover
►Average days to sell inventory
►Average days to convert inventory to cash

Ratios which reflect ability to meet long-term debt obligations and preferred dividends
►Debt to equity ratio
►Tangible net assets to equity ratio
►Times interest earned
►Times interest and preferred dividends earned

Operating and performance ratios
►Efficiency ratio
►Profit margin ratio
►Profitability ratio
►Return on total assets ratio (RTA)
►Return on Common equity ratio
►Leverage from sources of capital ratio
►Book value per common share
►Return on Investment (ROI)

Short-term bankruptcy prediction
►Z-Score
 

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Copyright: Williams & Partner, 2004