Financial Ratios
This calculator is designed to show you ten different financial ratios.
Financial ratios are used as indicators that allow you to zero in on areas
of your business that may need attention. Areas such as solvency, liquidity,
operational efficiency and profitability.
Information and interactive calculators
are made available to you as self-help tools for your personal
use and are not intended to provide investment advice. Independent
Bank of Texas
can not and does not guarantee their applicability or accuracy
in regards to your individual circumstances. All examples are
hypothetical and are for illustrative purposes. We encourage you
to seek advice from qualified professionals regarding all finance
issues.
Definitions
Total current assets:
This is any cash or asset that can be quickly turned into cash. This
includes prepaid expenses, accounts receivable, most securities and your
inventory.
Total current liabilities:
This is a liability in the immediate future. This includes wages, taxes,
and accounts payable.
Total long term assets:
This includes buildings and equipment (less depreciation), real estate
and other assets that are not readily turned into income or cash.
Total long term liabilities:
This includes mortgage, deferred taxes, notes payable and other
long term liabilities.
Sales:
Total sales for the period.
Receivables:
Total balance in your accounts receivable.
Cost of goods sold:
This is the total cost of the raw materials, supplies and labor
required to produce your product for the period.
Operating expenses:
Your selling, administrative and other expenses used to run your
business but not directly associated with the creation of you product.
Interest expense:
Your total interest expense for the period.
Inventory:
Total inventory which includes normal inventory, safety stock
and work in process.
Other income:
Any other income your company receives that was not through its
operations. This includes the sale of appreciated property or securities.
Gross profits:
Gross profits are your profits for the period before operating expenses,
fixed expenses, taxes or interest. This is calculated as your sales minus
your cost of goods sold.
Operating income:
Total income generated from your operations, after operating
expenses but before interest and taxes.
Net income before taxes:
Your income before taxes. This amount includes income not generated directly
from your operations such as income generated from financial investments.
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