Financial Ratios used in Dashboard | Solvency Ratios

In this Small Business Dashboard you can see some financial ratios and some hard coded text indicating what the actual value should be.

Here we present some more information about the Metrics used in this dashboard

 

SOLVENCY RATIOS

These ratios indicate the health of your operation. Are you solvent? How solvent are you? Do you have the money and assets in your operation to pay your bills? Quick Ratio shows the dollars of LIQUID ASSETS available to cover each dollar of current debt.

 

Quick Ratio
Quick Ratio = (Cash + Accounts Receivable)/Total Current Liabilities

What you have in cash? What you must pay within one ?

Current Ratio
Current Ratio Measures the margin of safety present to cover any possible reduction in current assets. How secure are you? Are you a good risk to lend money to?

Current Ratio = Total Current Assets/Total Current Liabilities

What you have that can be turned into cash?
What you must pay within one year?

Current Ratio
Current Ratio Measures the margin of safety present to cover any possible reduction in current assets. How secure are you? Are you a good risk to lend money to?

Current Ratio = Total Current Assets/Total Current Liabilities

What you have that can be turned into cash?
What you must pay within one year?

Current Liabilities to Inventory
This is a gauge of how much you depend on inventory on hand to help pay the bills. Are you borrowing against inventory so to speak?

Current Liabilities to Inventory = Total Current Liabilities/Inventory

Current Liabilities to Net Worth
This looks at expenses due within one year against the total funds you have devoted to the operation

Current Liabilities to Net Worth = Total Current Liabilities/Net Worth

Total Liabilities to Net Worth
This measures the total amount you owe by the total investment you have in the company. This is a critical number to be aware of. A high number here indicates risk to the company’s solvency. Total Liabilities to Net Worth = Total Liabilities / Net Worth
Fixes Assets to Net Worth
This tells you what portion of your net worth is fixed or hard assets (buildings, vehicles, etc.) and how much is intangible (receivables, inventory). Fixes Assets to Net Worth = Fixed Assets / Net Worth

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