Asset management ratios explain how potentially a business is using the company's assets to gain revenue through various groups of metrics. 2. the sum of equity and debt capital). Financial Ratio Interactive Calculator Tool. The asset management ratio analysis highlights the ability to convert or manipulate their assets for sales. To make pancakes for a LOT of people we might need 4 times the quantity, so we multiply the numbers by 4: 3 4 : 2 4 = 12 : 8. Return on equity and return on capital employed. The ways to improve a company's acid-test ratio are: 1. Pressing the "Reset" button loads the default values into the form. Click on Calculate. "Equity" Gearing = Debt Equity 2. For instance, changing from a 2.41:1 ratio to a 3.73:1 ratio will provide a rear wheel torque increase of 55%. The ratios fall into four categories: liquidity ratios. STOCK TURNOVER RATIO The stock turnover ratio is an efficiency ratio that measures the number of days it takes a business to sell its stock (inventory), i.e. gear" (a.k.a. It's one of the . Divide the driven gear teeth by the drive gear teeth. solvency ratios. And 9 divided by 3 is 3. It would be unfair to conclude the liquidity . 4. They will be willing to pay a higher price only if you earn . An acid ratio test, also known as a quick ratio, measures the ability of a company to use their short-term assets to cover their immediate liabilities. Determine the relevant ratios Every ratio gives you a different kind of insight into your business. Now 8 * 3.464 is 27.7. This leads to a business that operates poorly and get overtaken by its competitors. Your efficiency ratio is your expenses/revenue ratio. According to a recent survey by Goldman Sachs, .