Type in the main lines of an income statement and balance sheet and get about 30 ratios at once: liquidity, leverage, efficiency, profitability, cash flow and valuation. Each ratio shows its formula, what your number means in plain words and a general rule-of-thumb rating, and the whole analysis exports to CSV.
Last updated:
Beginning-of-year balances (optional, for averages)
Fill these in to use the average of beginning and ending balances in ROA, ROE and turnover ratios, as analysts usually do.
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How to use the Financial Ratio Analyzer
Choose the units your statements use: dollars, thousands or millions. Keep every amount in the same unit.
Enter the income statement: revenue, cost of goods sold, operating expenses, depreciation, interest and taxes. Profit lines are calculated for you.
Enter the balance sheet: current asset lines, PP&E, total assets, payables, current and total liabilities and total debt.
Add optional data: beginning-of-year balances for averages, operating cash flow and capex, and shares and share price for EPS and P/E.
Read the results by group, using the tabs. Each ratio explains what your number means and how it compares with a common guideline.
Export the analysis to CSV, copy it as text, or print the report.
Ratio formulas at a glance
Ratio
Formula
Common guideline
Current ratio
Current assets ÷ current liabilities
1.5 to 3
Quick ratio
(Cash + short-term investments + receivables) ÷ current liabilities
1.0 or more
Debt-to-equity
Total debt ÷ equity
Below 1 conservative, above 2 high
Interest coverage
EBIT ÷ interest expense
3 or more
Debt to EBITDA
Total debt ÷ EBITDA
3× or less
Inventory turnover
COGS ÷ average inventory
Industry-specific
Days sales outstanding
365 ÷ (revenue ÷ average receivables)
Close to your payment terms
Cash conversion cycle
DIO + DSO − DPO
Shorter is better
Net profit margin
Net income ÷ revenue
Industry-specific; 10%+ is strong for many
Return on equity
Net income ÷ average equity
15% to 20% often considered strong
Worked example
The example company has revenue of $2,500,000, COGS of $1,450,000, operating expenses of $620,000, depreciation of $90,000, interest of $45,000 and taxes of $70,000:
Look at trends. Run the analyzer for three to five years. A current ratio falling from 2.4 to 1.3 matters more than any single year's value.
Compare within an industry. Retailers turn inventory often and run thin margins; software firms carry little inventory and high gross margins.
Read ratios together. A high ROE with a high equity multiplier is driven by debt; check interest coverage before calling it a strength.
Check the cash. If operating cash flow is persistently below net income, find out why, for example growing receivables or inventory.
Mind one-off items. Large gains, write-downs or lawsuits distort a single year; consider excluding them from operating expenses for an adjusted view.
Frequently asked questions
What are the four main types of financial ratios?
Liquidity ratios (current, quick, cash) measure the ability to pay short-term obligations. Leverage or solvency ratios (debt-to-equity, debt ratio, interest coverage) measure how much the business relies on borrowed money. Efficiency ratios (asset, inventory and receivables turnover) measure how well assets are used. Profitability ratios (margins, ROA, ROE) measure how much profit is earned. This analyzer adds cash flow and market ratios as a fifth group.
Where do I find the numbers to enter?
Use the annual income statement for revenue, cost of goods sold, operating expenses, depreciation and amortization, interest and income tax. Use the balance sheet at year end for cash, receivables, inventory, total assets and liabilities, and debt. Operating cash flow and capital expenditures come from the cash flow statement. Public companies publish all three in their annual report (Form 10-K in the U.S.).
What is a good current ratio?
A current ratio between about 1.5 and 3 is generally comfortable: the company has $1.50 to $3 of current assets for each $1 of current liabilities. Below 1 means current liabilities exceed current assets. Very high ratios can mean idle cash or slow-moving inventory. Grocery stores and restaurants often run safely below 1 because they collect cash quickly.
Why use average balances for ROA, ROE and turnover?
Profit and revenue are earned over the whole year, while the balance sheet is a snapshot on one day. Averaging the beginning and ending balances better matches the assets or equity that were actually in use during the year. If the balance sheet changed a lot, for example after a large acquisition, averages give a more accurate ratio. Leave the optional fields blank to use year-end balances.
What is DuPont analysis?
DuPont analysis splits return on equity into three parts: ROE = net profit margin × asset turnover × equity multiplier. It shows whether a high ROE comes from profitability, from using assets efficiently, or from leverage. The analyzer shows the breakdown under the profitability ratios using your numbers.
Are the Healthy, Moderate and Watch ratings reliable?
They are general rules of thumb from common lending and analysis practice, not industry benchmarks. A software company and a utility have very different normal ratios. Compare your results with the same company's previous years and with peers in the same industry before drawing conclusions. Turnover and gross margin are not rated because they depend so strongly on the industry.
Does the analyzer store or upload my financial data?
No data leaves your browser. The numbers are saved only in this browser's local storage so they are still there when you return, and the CSV is generated on your device.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.