Free Financial Ratio Analyzer
for US Businesses

Liquidity ratios answer the most pressing question any business faces: can you cover what you owe in the next 30 to 90 days without selling off equipment or borrowing more money?

The Current Ratio (Current Assets ÷ Current Liabilities) is the standard benchmark. A ratio above 1.5 is generally considered healthy for most US industries. Below 1.0 means your short-term debts exceed your liquid assets — a serious warning sign. The Quick Ratio (also called the Acid-Test Ratio) strips out inventory, since inventory can’t always be converted to cash fast. This is the ratio SBA lenders and bank credit officers tend to look at first. A Quick Ratio above 1.0 means you can cover short-term obligations without touching inventory.

Revenue feels good. Profit is what matters. Profitability ratios tell you how much of every dollar you bring in actually survives after costs, expenses, and taxes.

Net Profit Margin (Net Income ÷ Net Revenue × 100) is your bottom-line conversion rate. A restaurant running at 4% net margin is in line with industry norms. A SaaS company running at 4% has a serious cost problem. Return on Assets (ROA) measures how efficiently your assets generate profit. A manufacturing company with $2M in equipment and $80K in net income has a 4% ROA. That context — what’s normal for your industry — is everything.

Every business uses some debt. Leverage ratios tell you whether your debt load is manageable or whether you’re one bad quarter away from a covenant breach.

The Debt-to-Equity Ratio compares what you owe to what you own. A ratio under 1.0 means owners have more skin in the game than creditors. Above 2.0 and most traditional lenders start getting nervous. Above 3.0 for a small business with variable revenue is a risk signal. The Interest Coverage Ratio (EBIT ÷ Interest Expense) tells you how many times over your earnings can cover your interest payments. Below 1.5 and you’re running a very tight rope. Most commercial lenders want to see at least 2.0x.

Efficiency ratios measure how well you’re converting assets and inventory into revenue. They’re the operational ratios. The ones that tell you whether your business model is actually working day-to-day.

Inventory Turnover (Cost of Goods Sold ÷ Average Inventory) is critical for product businesses. Low turnover means capital is sitting on shelves instead of working for you. High turnover (especially relative to peers) is a sign of strong demand and lean operations. Receivables Turnover measures how fast you collect what customers owe you. Slow collection is one of the most common silent killers of otherwise profitable small businesses.