Financial Ratios Calculator

Where do I find the inputs for these ratios?

Income statement: revenue, gross profit, operating income (EBIT), net income, COGS, interest expense. Balance sheet: total assets, current assets, inventory, cash, current liabilities, total liabilities, total equity, total debt. EBITDA = EBIT + depreciation + amortization (found in cash flow statement or notes).

What is a "good" current ratio?

A current ratio above 1.0 means current assets cover current liabilities — the company can meet short-term obligations. 1.5–2.0 is generally considered healthy. Above 3.0 might indicate too much idle cash or inventory. Below 1.0 signals potential liquidity risk. Industry matters: retailers often run lower ratios; capital goods companies run higher.

How do I use Return on Equity (ROE)?

ROE measures how efficiently a company generates profit from shareholders' equity. Compare ROE against the company's cost of equity (typically 8–12% for mature companies) — if ROE exceeds cost of equity, the company creates value. Compare across industry peers, not across industries (capital-intensive industries naturally have lower ROE).

What does a high debt-to-equity ratio mean?

A high D/E ratio means the company relies heavily on debt financing. This amplifies returns in good times (financial leverage) but amplifies losses in downturns. Capital-intensive industries (utilities, telecom) typically carry higher D/E ratios of 1–3; tech companies often run 0–0.5. Always consider D/E in the context of the industry and interest coverage ratio.