#6. Hands-On Accounting: Ratios (in Excel)

Although, not required to be included in the Financial Reports, Ratios are a very quick and easy way to interpret how well a business is doing. Ratios are created by using information from the three main reports (Income Statement, Balance Sheet and Cash Flow).

The data is applied to various formulas. The results are presented in numeric form and serve as an indicator, whether any aspect of the business requires attention.

There are many Ratios, but the most beneficial and most often used by Lenders, Investors and Decision makers are grouped into three categories:

Debt Ratios
Performance Ratios
Operating Ratios

Here you will find 10 of, what we believe, to be the most useful Ratios. You can learn about each in great detail. However, with our dashboard you don't have to.It is like when you drive a car, you would only want to glance at the warning lights from time to time, making sure that there are no potential problems.

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