Current ratio, quick ratio, and debt-to-equity ratio, these are all a few examples of financial ratios that could give you a quick answer to your business' financial status. Each financial ratio gives you specific information by using numbers from your financial statements. They are easy to use and can become a regular part of your monthly accounting.
For example, gross profit margin is a financial ratio. It measures the cost of sales. This ratio is calculated by dividing gross profit by sales. Two simple numbers give you a percentage that can greatly help you analyze your profitability. There are many ratios that give you just as valuable insight as the gross profit margin ration, and Cybertary has conveniently listed and explained them for your use. |
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