Finance Ratios Templates
Financial Ratios are created from information contained in financial statements, and are used to gain insight about a company. Ratios are utilized for quantitative analysis to asses a business’ performance, leverage, liquidity, growth, profitability, valuation, rates of return, margins, and more.
Uses of Financial Ratio Analysis
Ratio Analysis enable analysts, management, and investors to assess the financial performance of a company. The comparison of ratios can be done through companies of different sizes and time horizons. Ratios typically serve two purposes:
1. Track company performance
The trend of Ratios are tracked in order to assess a companies performance and efficiency. For example, an increasing debt-to-asset ratio may indicate that a company’s capital structure is not optimal, and it may be in risk of being overburdened with debt.
2. Make comparative judgments regarding company performance
Comparing financial ratios with that of major competitors provides insight on the company’s competitive advantages, and can also be used to assess its relative performance to peers. For example, comparing the return on assets between companies helps an analyst or investor to determine which company’s assets are being used most efficiently. Use a ratio template to save you time when building a comparison table.
What are Leverage ratios?
A leverage ratio is used to measure the level of debt a company has incurred compared to another business account. Leverage Ratios are useful tools to assess a company’s use of debt to finance the business.
What are Profitability Ratios?
Profitability ratios measure and evaluate how well a business generates income(a profit). They show how well a company utilizes its assets to produce profit and value to shareholders. Use one of our profitability ratios templates to analyze a company’s income generating ability.
What are Efficiency Ratios?
Efficiency Ratios assess the overall ability of a company’s operations. They measure performance in terms of multiples, and are extremely useful when looking for areas of improvement. Use this marketplace to find the right tool for you and be as efficient as possible at your workplace.