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Analysis

Financial Ratio Analyzer

A financial ratio analysis turns raw balance sheet and income statement figures into a clear picture of business health - can it pay its bills (liquidity), is it actually profitable (profitability), how well does it use its assets and working capital (efficiency), how much financial risk does it carry (leverage), and is it growing (growth). Accountdesq's Financial Ratio Analyzer goes beyond a single current-ratio calculator: it computes 15 ratios across all five categories, rates each against general benchmark bands, rolls them into category scores and one overall Financial Health Score, and explains what every number actually means in plain English.

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How it works

Enter figures from your balance sheet (cash, current assets, inventory, receivables, total assets, liabilities, equity) and income statement (revenue, COGS, gross/operating/net profit, interest expense), plus prior-period revenue and profit for growth ratios. The tool instantly computes all 15 ratios, rates each Excellent/Good/Needs Attention/At Risk, and shows a radar chart of your five category scores plus an overall health score out of 100. Export the full analysis as a professional PDF or Excel report.

Columns: one line/row per field, e.g. 'Cash: 45000'

Balance Sheet ($)

Income Statement ($)

Prior Period (for growth ratios)

Enter your balance sheet and income statement figures above (or load sample data) to see your financial health score.

Common Mistakes to Avoid

  • Judging financial health from profit alone while ignoring liquidity and leverage
  • Comparing ratios to generic benchmarks without any industry context
  • Using only the most recent period - a ratio trend over several periods reveals far more than a single snapshot
  • Ignoring the Cash Conversion Cycle - profitable businesses can still run out of cash if it's too long
  • Not tracking Days Sales Outstanding - slow collections quietly drain working capital

Best Practices

  • Review ratios every quarter, not just at year-end, to catch problems while they're small
  • Look at category scores together - liquidity, profitability, efficiency, leverage, and growth all matter
  • Compare your ratios against industry peers where possible, not just the general benchmarks shown here
  • Use the Interest Coverage ratio before taking on new debt to confirm you can service it
  • Share the PDF report with your accountant or lender - it's formatted for exactly that conversation

Why use this tool?

A single ratio in isolation can mislead - strong profitability with poor liquidity can still sink a business. Looking across all five categories at once, with clear benchmarks and plain-English explanations, gives owners, accountants, and lenders a much more honest picture than any one number alone.

Frequently Asked Questions

It's the practice of comparing line items from the balance sheet and income statement to reveal a business's liquidity, profitability, efficiency, leverage, and growth - things a single number (like revenue) can't show on its own.

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Disclaimer: Accountdesq provides this Financial Ratio Analyzer for informational and convenience purposes only. Output is not a substitute for professional accounting, legal, or tax advice. No data entered is transmitted to or stored on our servers - all calculations happen locally in your browser. Accountdesq accepts no liability for errors in generated documents. Always consult a qualified accountant or tax professional for compliance matters.