{"id":4025,"date":"2014-05-08T18:22:17","date_gmt":"2014-05-08T18:22:17","guid":{"rendered":"http:\/\/www.marketingteacher.com\/financial-ratios\/"},"modified":"2015-07-02T10:37:11","modified_gmt":"2015-07-02T10:37:11","slug":"financial-ratios","status":"publish","type":"post","link":"https:\/\/marketingteacher.com\/staging\/5483\/financial-ratios\/","title":{"rendered":"Financial Ratios"},"content":{"rendered":"<h1>Financial Ratios<\/h1>\n<ul class=\"lessonlinks\">\n<li class=\"lesson active\"><a href=\"https:\/\/marketingteacher.com\/staging\/5483financial-ratios\/\">Lesson<\/a><\/li>\n<li class=\"exercise\"><a href=\"https:\/\/marketingteacher.com\/staging\/5483exercise-financial-ratios\/\">Exercise<\/a><\/li>\n<li class=\"answer\"><a href=\"https:\/\/marketingteacher.com\/staging\/5483answer-financial-ratios\/\">Answer<\/a><\/li>\n<\/ul>\n<p>Lender and investors are able to glean a lot of valuable information   from the data available in a company&#8217;s&#8217; financial statements and   records. Their priority is insuring that they are repaid for any loan or   financial investment.  Anyone contributing to your company financially   wants to know:<\/p>\n<p>Lender and investors are most assuredly interested in a company&#8217;s   profitability since that is a good measure of ability to repay financial   assistance. To measure this aspect they employ a calculation called the   Net Profit on Sales Ratio.<\/p>\n<p class=\"note\">Net Profit on Sales = \u00a0Net Profit \/<br \/>\n\t\t\t\t\t\tNet Sales<\/p>\n<h2>&nbsp;<\/h2>\n<ul>\n<li>How much of your business you really own<\/li>\n<li>Whether there is enough ready cash on hand<\/li>\n<li>What is the status of current liabilities?<\/li>\n<li>Are profits reaching their potential?<\/li>\n<\/ul>\n<p>Certain financial ratios provide a wealth of information on the   health of your business and answer the questions outlined above. There   are many ratios that may be applied to assist in a lending or investing   decision the following are some very key ratios a business owner should   be aware of:<\/p>\n<p>Lenders are particularly interested in liquidity which reveals the   ability to pay bills and the availability of ready cash. They use a   calculation called the Current Ratio.<\/p>\n<p class=\"note\">Current Ratio =\u00a0 Current Assets \/  \t\t\t\t\tCurrent   Liabilities\t\t\t\t\t<\/p>\n<p>A 2 to 1 ratio is generally acceptable although acceptability may   vary per industry.<\/p>\n<p>Before loaning or investing, a financial entity may review a   company&#8217;s level of ownership and compare that with claims due to   creditors. To check this aspect of your finances, they use a calculation   called the Worth to Dept Ratio.<\/p>\n<p class=\"note\">\t\t\t\t\t\tWorth to Debt Ratio = Net  Worth \/<br \/>\n\t\t\t\t\t\tTotal  Debt <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Lender and investors are able to glean a lot of valuable information from the data available in a company&#8217;s&#8217; financial statements and records. Their priority is insuring that they are repaid for any loan or financial investment.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","footnotes":""},"categories":[28],"tags":[],"class_list":["post-4025","post","type-post","status-publish","format-standard","hentry","category-finance"],"_links":{"self":[{"href":"https:\/\/marketingteacher.com\/staging\/5483\/wp-json\/wp\/v2\/posts\/4025","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/marketingteacher.com\/staging\/5483\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/marketingteacher.com\/staging\/5483\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/marketingteacher.com\/staging\/5483\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/marketingteacher.com\/staging\/5483\/wp-json\/wp\/v2\/comments?post=4025"}],"version-history":[{"count":0,"href":"https:\/\/marketingteacher.com\/staging\/5483\/wp-json\/wp\/v2\/posts\/4025\/revisions"}],"wp:attachment":[{"href":"https:\/\/marketingteacher.com\/staging\/5483\/wp-json\/wp\/v2\/media?parent=4025"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/marketingteacher.com\/staging\/5483\/wp-json\/wp\/v2\/categories?post=4025"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/marketingteacher.com\/staging\/5483\/wp-json\/wp\/v2\/tags?post=4025"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}