Ratios

Gross Profit Ratio

Shows the percentage of net sales that is gross profit. Measures efficiency in covering the cost of goods sold.

Net Profit Ratio

Measures the percentage of net sales that is net profit. Shows overall profitability after all expenses.

Operating Expense Ratio

Measures what proportion of net sales is spent on operating expenses. Indicates efficiency in managing expenses.

Return on Assets (ROA)

Measures how efficiently a company uses its total assets to generate net profit. Higher ROA = better asset use.

Working Capital

Shows short-term financial health and liquidity.

Quick Ratio

Measures ability to pay short-term liabilities using quick assets. A stricter liquidity measure than current ratio.

Debt to Equity Ratio

Measures financial leverage by comparing total liabilities to shareholders’ equity. Higher ratio = more risk, more debt financing.