Liquidity
Leverage
Profitability
General information tools only — not tax or financial advice. Rates and rules vary by country and change over time; confirm important figures with a qualified accountant.
How to use the business ratios calculator
What each ratio tells you
Current ratio compares everything the business owns short-term with everything it owes short-term — the basic “can we pay our bills?” test. Quick ratio is stricter: it removes stock, because stock may not sell quickly. Debt-to-equity shows how the business is funded — lenders versus owners. Gross margin shows how much of each sale survives direct costs.
Reading ratios sensibly
A “good” ratio depends on the industry: a supermarket runs safely on a current ratio that would worry a manufacturer. Use the plain-English notes as a starting point, compare against last year and against similar businesses, and look at the trend rather than a single snapshot.
Example
Current assets 5,000 (including 1,000 of stock), current liabilities 2,500: current ratio = 2.0, quick ratio = 1.6. With debt 4,000 and equity 6,000, debt-to-equity is 0.67; revenue 10,000 with COGS 6,000 gives a gross margin of 40%.
Frequently asked questions
Where do I find these figures?
Current assets, inventory, liabilities, and equity come from your balance sheet; revenue and cost of goods sold come from your profit-and-loss statement for the same period.
What is a good current ratio?
Around 1.5 to 2 is comfortable for many businesses, but norms vary widely by industry. Below 1 means short-term debts exceed short-term assets, which deserves attention in any industry.
Why exclude inventory in the quick ratio?
Stock can take months to sell and may have to be discounted. The quick ratio asks whether bills could be paid from cash and near-cash assets alone.
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