Ratios and Analysis

Ratios and analysis pages explain how readers turn accounting numbers into comparisons, trends, and operating signals. The section emphasizes ratio meaning, not just formula memorization.

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• Working Capital
• Liquidity
• Current Ratio
• Quick Ratio
• Cash Ratio
• Gross Profit Margin
• Accounts Receivable Turnover
• Inventory Turnover
• Financial Statement Analysis
• Income Statement
• Balance Sheet
• Cash Flow Statement

In this section

• Accounts Receivable Turnover
  Ratio measuring how efficiently a business collects credit sales relative to its average receivables balance.
• Cash Ratio
  Strict liquidity ratio comparing cash and cash equivalents with current liabilities.
• Current Ratio
  Liquidity ratio comparing all current assets with current liabilities to assess short-term coverage.
• Financial Statement Analysis
  Use of statements, ratios, and trend review to interpret a business's profitability, liquidity, leverage, and operating quality.
• Gross Profit Margin
  Ratio showing gross profit as a share of revenue after cost of goods sold has been deducted.
• Inventory Turnover
  Ratio measuring how many times inventory is sold or used over a period relative to average inventory.
• Liquidity
  Ability to meet short-term obligations using cash or assets that can be converted to cash without major value loss.
• Quick Ratio
  Stricter liquidity ratio that compares quick assets with current liabilities without relying on inventory conversion.
• Working Capital
  Difference between current assets and current liabilities, showing the short-term resource cushion available for operations.