Ratios - Indicates how your
company's assets are financed - by borrowing or by the owners'
equity. The ratios include:
- Expresses total liabilities as a percentage of total assets.
The ratio shows what portion of the business assets are financed
by debt as opposed to earnings or stockholders contributions.
Return of Equity - The
ratio is an indicator of your company's use of its invested
Return of Equity Before Interest
- How much of your company's worth is being fueled with borrowed
Profit Margin Before Federal
Income Tax (FIT) - Shows the role that sales played in
your company's profitability.
Profit Margin After FIT
- Shows the effect of taxes.
Ratios - An
important measure of your company's performance and its economic
good health. The ratios are:
Return on Growth profit
- Gives an idea of the spread between net profit and gross
Gross Profit to Sales
- Gross Margin is often used to determine how well your company
can weather tough times.
Operating Expense to Sales
- Another indicator of the relationship between gross margin
Operating Margin - Useful
in evaluating management's skill in minimizing operating expenses.
Ratios - Measure of management's
ability to control expenses. The ratios covered are:
Turnover of Assets
- An indication of the productivity of your business.
Income Tax Rate Ratio
- Determines the amount of government taxes taken out of profits.
Expenses to Gross Profit
- Means of analyzing your company that has reached peak sales
and must cut expenses to remain competitive.
Depreciation Expense Ratio
- Indication if there is enough sales to cover this often
very significant overhead item.
Days Sales in Inventory
- Shows what the sales department can rely on in terms of
to Sales Percentages -
Often useful to compare each item of your company's expenses
Cost of Sales and Operations
- Direct costs incurred in producing goods or providing services.
Advertising - Must be
reasonably related to the trade or business and include the
cost of promotion and publicity.
Depletion, Deprecation and
Taxes Paid - Ordinary
state and local taxes.
Interest Paid - Expenses
paid on business indebtedness.
- Includes salaries, wages, stock bonuses, bonds and other
forms of compensation paid to officers for personal services
Other Costs - Expenses
not specified above.