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Crunching the Numbers
• You can use ratios to do final reality checks over your budgets.
• Ratios are simply numbers that let us compare.
• Ratios measure relationships between particular numbers.
• Ratios also enable you to compare one company against industry standards.
Understanding Ratio Analysis
Crunching the Numbers
Sample Balance Sheet
Understanding Ratio Analysis
Crunching the Numbers
Additional Facts and Figures•Gross Sales: $22,000•Net Sales: $17,000•Gross Profit: $15,000•Net Profit: $10,500
Understanding Ratio Analysis
Crunching the Numbers
Current Ratio
Understanding Ratio Analysis
Crunching the Numbers
Quick Ratio
Understanding Ratio Analysis
Crunching the Numbers
Debt Ratio
Understanding Ratio Analysis
Crunching the Numbers
Net Profit Margin
Understanding Ratio Analysis
Crunching the Numbers
Gross Profit Margin
Understanding Ratio Analysis
Crunching the Numbers
Return on Sales Ratio
Understanding Ratio Analysis
Crunching the Numbers
Debt to Net Worth Ratio
Understanding Ratio Analysis
Crunching the Numbers
Cash Turnover Ratio
Understanding Ratio Analysis
Crunching the Numbers
Collection Ratio
Understanding Ratio Analysis
Crunching the Numbers
Investment Turnover
Understanding Ratio Analysis
Crunching the Numbers
Return on Investment (ROI)
Understanding Ratio Analysis
Business Mentor Perth – Call 0407 900 234 www.executivementors.com.au
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