{"id":5409,"date":"2026-03-22T11:32:13","date_gmt":"2026-03-22T11:32:13","guid":{"rendered":"https:\/\/www.whizconsulting.net\/au\/?page_id=5409"},"modified":"2026-03-26T09:42:16","modified_gmt":"2026-03-26T09:42:16","slug":"financial-ratios","status":"publish","type":"page","link":"https:\/\/www.whizconsulting.net\/au\/calculators\/financial-ratios\/","title":{"rendered":"Financial Ratios"},"content":{"rendered":"<h2>Why Do We Use It?<\/h2>\n<p>Financial ratios are used to assess a company\u2019s profitability, cash flow, and financial stability. They transform complex financial data into simple insights, so that it\u2019s easier to compare performance over time or with other companies. Business owners, investors, and analysts rely on these ratios to identify trends, detect potential risks, and make informed strategic or investment decisions.<\/p>\n<hr class=\"mb-5\" \/>\n<h2>How to Calculate Financial Ratios?<\/h2>\n<ul>\n<li>Collect the company\u2019s financial statements, including the income statement, balance sheet, and cash flow statement for the selected period<\/li>\n<li>Decide which type of financial ratio you want to calculate, such as profitability, liquidity, solvency, or efficiency<\/li>\n<li>Apply the appropriate formula (for example, Current Ratio = Current Assets \u00f7 Current Liabilities)<\/li>\n<li>Extract the required figures from the financial statements, such as total assets, net income, revenue, or liabilities<\/li>\n<li>Compare the calculated ratio with industry benchmarks or past performance to evaluate financial strength and identify areas for improvement<\/li>\n<\/ul>\n<hr class=\"mb-5\" \/>\n<h2>Financial Ratio Formula:<\/h2>\n<ul>\n<li>Liquidity Ratios: Current Ratios = Current Assets \u00f7 Current Liabilities<\/li>\n<li>Leverage Ratios: Debt to Equity = Total Debt \/ Shareholders Equity<\/li>\n<li>Efficiency Ratios: Asset Turnover = Net Sales \/ Average Total Sales<\/li>\n<li>Profitability Ratios: Operating Margin = Operating Income \/ Net Sales<\/li>\n<li>Market Value Ratios: P\/E Ratio = Share Price \/ Earnings Per Share<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Why Do We Use It? Financial ratios are used to assess a company\u2019s profitability, cash flow, and financial stability. They transform complex financial data into simple insights, so that it\u2019s easier to compare performance over time or with other companies. Business owners, investors, and analysts rely on these ratios to identify trends, detect potential risks,&hellip; <a class=\"more-link\" href=\"https:\/\/www.whizconsulting.net\/au\/calculators\/financial-ratios\/\">Continue reading <span class=\"screen-reader-text\">Financial Ratios<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"parent":5393,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"page-templates\/calculator-page.php","meta":{"_acf_changed":false,"footnotes":""},"class_list":["post-5409","page","type-page","status-publish","hentry","entry"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.whizconsulting.net\/au\/wp-json\/wp\/v2\/pages\/5409","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.whizconsulting.net\/au\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.whizconsulting.net\/au\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.whizconsulting.net\/au\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.whizconsulting.net\/au\/wp-json\/wp\/v2\/comments?post=5409"}],"version-history":[{"count":5,"href":"https:\/\/www.whizconsulting.net\/au\/wp-json\/wp\/v2\/pages\/5409\/revisions"}],"predecessor-version":[{"id":5434,"href":"https:\/\/www.whizconsulting.net\/au\/wp-json\/wp\/v2\/pages\/5409\/revisions\/5434"}],"up":[{"embeddable":true,"href":"https:\/\/www.whizconsulting.net\/au\/wp-json\/wp\/v2\/pages\/5393"}],"wp:attachment":[{"href":"https:\/\/www.whizconsulting.net\/au\/wp-json\/wp\/v2\/media?parent=5409"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}