Net Pretax Profit ÷ Revenue
The bottom line -- the amount you have left after every other expense is taken out. (Sageworks adjusts the number so any extra funds the owners have taken out have been added back in.)
Gross Profit ÷ Revenue
Gross profit is your revenue minus what it costs to make your product.
EBITDA ÷ Revenue
Many companies use this as a shorthand measure of cash flow. EBITDA is earnings before interest, taxes, depreciation, and amortization.
Net Income ÷ Total Equity
The return your shareholders are getting on their investment
Net Income ÷ Total Assets
Net income generated for each dollar of assets. It's especially relevant for capital-intensive industries, like manufacturing.
EBITDA ÷ Interest Expense
This ratio shows roughly how easily you can repay your debts.
Total Liabilities ÷ Total Equity
What you owe compared with what you own
(Inventory ÷ Cost of Goods Sold) x 365
The amount of time it takes to convert inventory into sales
(Accounts Payable ÷ Cost of Goods Sold) x 365
The number of days, on average, you take to pay your bills
(Accounts Receivable ÷ Sales) x 365
The number of days, on average, your customers take to pay you
Total Current Assets÷Total Current Liabilities
The amount of cash (or assets that can be turned into cash) on hand
(Cash + Accounts Receivable) ÷ Total Current Liabilities
Similar to the current ratio, this is a good measure of a company's short-term cash position.
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