Profitability ratios
Profitability ratios measure the company's use of its assets and control of its expenses to generate an acceptable rate of return Gross margin, Gross profit margin or Gross Profit Rate[7][8] :::OR :::

Operating margin, Operating Income Margin, Operating profit margin or Return on sales (ROS)[8][9]

Note: Operating income is the difference between operating revenues and operating expenses, but it is also sometimes used as a synonym for EBIT and operating profit.[10] This is true if the firm has no non-operating income. (Earnings before interest and taxes / Sales[11][12])

Profit margin, net margin or net profit margin[13]

Return on equity (ROE)[13]

Return on assets (ROA ratio or Du Pont Ratio)[6]

Return on assets (ROA)[14]

Return on assets Du Pont (ROA Du Pont)[15]

Return on Equity Du Pont (ROE Du Pont)

Return on net assets (RONA)

Return on capital (ROC)

Risk adjusted return on capital (RAROC)
:::OR :::

Return on capital employed (ROCE)

Note: this is somewhat similar to (ROI), which calculates Net Income per Owner's Equity

Cash flow return on investment (CFROI)

Efficiency ratio

Net gearing

Basic Earnings Power Ratio[16]

Liquidity ratios
Liquidity ratios measure the availability of cash to pay debt. Current ratio (Working Capital Ratio)[17]

Acid-test ratio (Quick ratio)[17]

:;Cash ratio[17]

:;Operation cash flow ratio

Activity ratios (Efficiency Ratios)
Activity ratios measure the effectiveness of the firms use of resources. Average collection period[3]

Degree of Operating Leverage (DOL)

DSO Ratio.[18]

Average payment period[3]

Asset turnover[19]

Stock turnover ratio[20][21]

Receivables Turnover Ratio[22]

Inventory conversion ratio[4]

Inventory conversion period (essentially same thing as above)

Receivables conversion period

Payables conversion period

Cash Conversion Cycle

Debt ratios (leveraging ratios)
Debt ratios quantify the firm's...

...article I chose is Solvency Ratio Analysis and Leveraging. This article tells about how solvency and leveraging are connected. It describes several ratios used to determine how a company is doing long-term. Company’s use debt and equity to start and keep their operations running. Owners or stockholders donate equity to build and maintain their company. Leverage is used to produce income and impacts a company’s long-term solvency. No matter what the economic situation is, a company needs to be able to make their interest and principal payments. If a company is highly leveraged, they can go out of business.
Debt Ratio is the most used. The equation is: Total Liabilities/ Total Assets = Debt Ratio. The numbers to figure out the Debt Ratio can be obtained from the balance sheet. This ratio indicates how much the company’s assets are funded through debt.
Debt to Equity Ratio is used to find out the company’s solvency and leverage. The equation is: Total Liabilities/ Total Equity = Debt to Equity Ratio. These numbers can be obtained from the balance sheet. A higher amount indicates the company is obtaining most of their funding through creditors. A lower amount indicates a company is able to obtain outside funding.
Times Interest Earned Ratio measures if a company can pay their interest payments. The equation is: Income Before Interest and Taxes/...

...Patton-Fuller Ratio Computation
Shourn Henderson, Marilyn Lilly, Noralva Rodriguez
HCS/405
February 11, 2013
Dr. Ben Kukoyi
Patton-Fuller Ratio Computation
Introduction
This paper will address the ratio computations to Patton-Fuller Community Hospital taken from Audited and Unaudited Reports from 2008-2009. From 2008-2009 the existing assets reduced, but showed a growth in the hospital’s responsibilities. The hospital is presently making adequate revenue to cover the debts, which equals to no profit. Revenue needs to rise to avoid the debts of the hospital from increasing. Providing excellence service will in turn increase the quantity of patients seen eventually increasing revenue.
The Current Ratio decrease, due to assests, and an increase in liabilities, which indicates a 2.23% change in the ratio of assets to liabilities. The sharp drop in cash was offset by large rises in Net Accounts Receivable and Inventory, which are ordinarily unfavorable events also. However, if significant supplies were purchased (due to vendor discounts), the increase in Inventory could have been an astute business decision. The uncollected Accounts Receivables are troublesome.
1.The Quick Ratio decrease. The main difference between the Current Ratio and the Quick Ratio is 6.05:1 “inventory” in the Quick Ratio.
1.The Days Cash...

...Low Debt Ratio: How Does it Contribute to Company Performance?
Introduction
It has been said that you must measure what you expect to manage and accomplish. The same is true when one considers business performance. In a business measurement drives improvement which drives satisfaction. In turn, satisfaction results in loyalty from customers which means the financial success of a business. Without measurement, one has no reference to work with and thus, tends to operate in the dark.
One way of establishing references and managing the financial affairs of an organization is to use ratios. Ratios are simply relationships between two financial balances or financial calculations. These relationships establish our references so we can understand how well we are performing financially. Ratios also extend our traditional way of measuring financial performance; i.e. relying on financial statements. By applying ratios to a set of financial statements, we can better understand financial performance.
Statement of the Problem
The debt ratio compares a company's total debt (the sum of current liabilities and long-term liabilities) to its total assets (the sum of current assets, fixed assets, and other assets such as 'goodwill'), which is used to gain a general idea as to the amount of leverage being used by a company. It compares the funds provided by creditors to the funds provided by...

...
Ratio Analysis
Cynthia Nelson
HCS/571
September 2 2013
Joseph Rudd
Ratio Analysis
Financial ratio analysis is the calculation and comparison of ratios pulled from the information in a company’s financial statements (Cleverly & Song, 2011). The financial report is used by organization to determine the financial health and stability of an organization. The ratios analysis data are found on the business Profit and Loss Statement and the balance sheet (Loth, 2013). These financial documents provide data for a specific time usually fiscal year (Cleverly & Song, 2011). The ratios are then obtained through formula divided into categories that address the different focus areas of management (Suarez & Lesneski, 2011). The company WW Enterprises uses the four major areas Liquidity, Solvency, Profitability; and Efficiency that measure how well the organization is using its resources (Loth, 2013).
Liquidity ratio is a quick look at organizations ability to meet current financial obligations (Staff, 2013). The Liquidity ratio data for WW Enterprise includes the current ratio, the quick ratio and the operating cash flow ratio (Loth, 2013)
LIQUIDITY RATIOS.
Current Assets/Current Liabilities
=52,100/30834=1.725(1.73)
The ratio results provide a quick assessment of the company’s ability to...

...University:
Professor:
Date of submission:
Introduction
Ratio analysis is a strategy used to aid in assessing the financial position of an organization. In healthcare finance, there are a lot of financial ratios, which have multiple descriptions. This report focuses on roles and analysis of financial ratios by category. In addition, it describes the comparison of financial ratios and national norms in Baltimore hospital. Ratios used in financial conditions are primarily driven by comparative data from the organization and its competitors.
Role of financial ratios
There are two principal uses of financial ratios; to keep track of the hospital performance, and to make smart judgments concerning the performance of that hospital. The performance of a hospital is assessed using trend annalistic calculating the ratios on a per period basis. This also involves tracking the values over time. The analysis can be used to figure out spot trends that may be cause for alarm. These include, increasing average collection periods for receivables, or a decline in the firms liquidity position. Ratios serve as red flags for challenging issues, or as a point of reference for measurement of the firm’s performance (Bull, 2008).
Making relative performance comparisons are another role...

...1. What are the five major categories of ratios, and what questions do they answer?
* Liquidity: Can we make required payments as they fall due?
* Asset management: Do we have the right amount of assets for the level of sales?
* Debt management: Do we have the right mix of debt and equity?
* Profitability: Do sales prices exceed unit costs, and are sales high enough as reflected in NPM, ROE, and ROA?
* Market value: Do investors like what they see as reflected in P/E and M/B ratios?
2. What is the Significance (Importance) of Financial Ratio in Decision Making?
* Ratios facilitate comparison of:
* One company over time
* One company versus other companies
* Ratios are used by:
* Lenders to determine creditworthiness
* Stockholders to estimate future cash flows and risk
* Managers to identify areas of weakness and strength
In Detail:
* For Short term Creditors – The Short term creditors like bankers and suppliers of material can determine the firm’s ability to meet its current obligations with the help of liquidity ratios such as current ratio and quick ratio.
* For Long Term Creditors – The Long term creditors like debenture-holders and financial institution can determine firm’s long term financial strength and survival with the help of leverage or capital structure...

...Ratio Analysis
Ratio analysis is basically used to understanding the financial health of a business entity. With the help of ratios we can easily calculate from current year performance of the companies and are then compared to previous years. Ratio analysis conducts a quantitative analysis of information in a company’s financial statements. These Ratios are most commonly used in banking sector can be divided into five main categories
Liquidity Ratios
Leverage Ratios
Profitability Ratios
Activity Ratios
Market Ratios
A) Liquidity Ratios
Liquidity Ratios are used to determine a company's ability to meet its short terms obligations.
These include;
1) Current Ratio
2) Acid Test Ratio
3) Working capital
Current Ratio
What Does Current Ratio Mean?
A liquidity ratio that measures a company's ability to pay short-term obligations. Also known as "liquidity ratio", "cash asset ratio" and "cash ratio".
OR
It is a measure of general liquidity and is most widely used to make the analysis for short term financial position or liquidity of a firm. It is calculated by dividing the total of the current assets by total of the current liabilities.
Formula = Current Assets / Current Liabilities...

... Section III: Financial Analysis—Ratio Analysis
Profitability Ratios
When evaluating the company’s profitability, we pay attention to the following ratios which are commonly analyzed: Net Profit Margin, Accounts Receivables Turnover, Return on Assets and Return on Equity. From the tables and figures, all the ratios have increased over the past five years except for 2012. This means UPS is overall a healthy company and does a good job at generating profits.
Net Profit Margin Ratio
It measures how much net profit a company can earn from every dollar of sales. As shown in Table 1, net profit margin for UPS keeps consistent for each year. The profit fell in 2012 for several reasons, mostly due to the prohibition decision issued by the European Commission to stop the acquisition of TNT Express. The termination fee and related expenses are $284 million, which has a big impact the International Package segment (10-K: UNITED PARCEL SERVICE INC,Annual Report,28-Feb-2014). Also chief executive officer Scott Davis attributes this result to a cheaper and slower modes of transport in a slower growth environment that affects the profitability. In 2013, the ratio has been increased to 7.89%, this indicates UPS becomes more profitable and has better control over its expenses compared to previous years.
Accounts Receivables Turnover
This ratio measures the efficiency of...