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[]
[null,null,"Prepared by:",null,null,"Date:"]
[null,null,"{Enter your name or business name here}",null,null,"2010-11-23"]
[null,null,"Ratio analysis calculator"]
[null,null,"Use this calculator to quickly work out the ratios in your business. Complete the following each month to keep on top of your current financial situation.  See the next tab for more information."]
[{"$nulls":3},"January","February","March","April","May","June","July","August","September","October","November","December"]
[null,null,"Sales",0,0,0,0,0,0,0,0,0,0,0,0]
[null,null,"Annual invoiced sales",0,0,0,0,0,0,0,0,0,0,0,0]
[null,null,"Net profit",0,0,0,0,0,0,0,0,0,0,0,0]
[null,null,"Opening stock",0,0,0,0,0,0,0,0,0,0,0,0]
[null,null,"Closing stock",0,0,0,0,0,0,0,0,0,0,0,0]
[null,null,"Purchases",0,0,0,0,0,0,0,0,0,0,0,0]
[null,null,"Expenses",0,0,0,0,0,0,0,0,0,0,0,0]
[null,null,"Current assets",0,0,0,0,0,0,0,0,0,0,0,0]
[null,null,"Current liabilities",0,0,0,0,0,0,0,0,0,0,0,0]
[null,null,"Debtors",0,0,0,0,0,0,0,0,0,0,0,0]
[null,null,"Owner's equity",0,0,0,0,0,0,0,0,0,0,0,0]
[]
[null,null,"Results:"]
[null,null,"Net profit ratio","-","-","-","-","-","-","-","-","-","-","-","-"]
[]
[]
[null,null,"Return on owners equity","-","-","-","-","-","-","-","-","-","-","-","-"]
[]
[]
[null,null,"Rate of stock turn (times per year)","-","-","-","-","-","-","-","-","-","-","-","-"]
[]
[]
[null,null,"Working capital ratio","-","-","-","-","-","-","-","-","-","-","-","-"]
[]
[]
[null,null,"Debtor to sales ratio (weeks)","-","-","-","-","-","-","-","-","-","-","-","-"]
[]
[]
[null,null,"Expenses ratio","-","-","-","-","-","-","-","-","-","-","-","-"]
[]
[]
[]
[null,null,"Please note that this is a guide only and should neither replace competent advice, nor be taken, or relied upon, as financial or professional advice.  Seek professional advice before making any decision that could affect your business. "]

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[]
[null,null,"Ratio analysis"]
[null,null,"Ratio analysis is used to assess your past financial information (such as sales), and compare that to previous years, to see if there is a trend. Based on that trend you can determine whether your business is improving or declining. If it is declining then you can take appropriate remedial action. \n\nYou can also make use of Key Performance Indicators (KPI's) to look at the things that need to happen in your business that are crucial - and then measure them. For example, getting all orders finished in a day might be a key indicator - and it's easy to measure how much is left over at the end of the day. \n"]
[null,null,"Net profit ratio"]
[null,null,"This ratio shows whether the business operates at a sufficient level to cover all expenses and show a profit. You should look at your ratios at least yearly, preferably monthly, some businesses do it weekly - and daily is probably a bit much."]
[null,null,"Net profit ratio calculation\n\n  \n \n"]
[null,null,"Net Profit",{"v":40000,"d":"$40,000"}]
[null,null,"Divided by sales",{"v":200000,"d":"$200,000"}]
[null,null,"Ratio =","0.2 or 20%"]
[]
[null,null,"Return on owners equity"]
[null,null,"This ratio indicates whether you are receiving a satisfactory return from your investment in your business. Owner’s Equity represents how much money you’ve invested to start or buy a business, plus any profit left in over the years."]
[null,null,"The return on Owner’s Equity should be at least greater than the interest you could otherwise earn on your money at the bank."]
[null,null,"Return on owners equity calculation"]
[null,null,"Net profit",{"v":10000,"d":"$10,000"}]
[null,null,"Divided by owner’s equity",{"v":100000,"d":"$100,000"}]
[null,null,"Ratio =","0.10 or 10%"]
[]
[null,null,"Rate of stock turn"]
[null,null,"The idea here is to turn your stock around as fast as possible while still maintaining adequate levels. A slow stock turn could mean overstocking or that you hold high levels of out-of-date or un-saleable items. Compare your stock turn rate to similar businesses in the industry."]
[null,null,"Rate of stock turn calculation"]
[null,null,"Total Expenses","$100,000 (Opening Stock plus Purchases less Closing Stock)"]
[null,null,"Divided by Average Stock","$20,000 (Opening Stock plus Closing Stock divided by 2)"]
[null,null,"Ratio =","5  (Stock turned over 5 times/year) "]
[]
[null,null,"Working capital ratio"]
[null,null,"A ratio of 2 to 1 should be aimed for, ($2 in assets for every $1 of liabilities), but this will depend on the cash cycle of the business, i.e., stock turn, debtor collection times, etc."]
[null,null,"Working capital ratio calculation"]
[null,null,"Current Assets",{"v":300000,"d":"$300,000"}]
[null,null,"Divided by Current Liabilities",{"v":100000,"d":"$100,000"}]
[null,null,"Ratio =","3 (or 300%)"]
[]
[null,null,"Debtors to sales"]
[null,null,"On normal credit terms, debtors should be collected within 40 days. The more efficiently you collect debt, the better your cash flow situation is likely to be."]
[null,null,"If this ratio is deteriorating it shows you are not managing your debtors efficiently and people loaning money to you will take note. Remember you are in business to make a profit, not to finance other businesses with \"cheap\" money by letting them get away with not paying you.\n\n"]
[null,null,"Debtors to sales calculation"]
[null,null,"Debtors",{"v":20000,"d":"$20,000"}]
[null,null,"Divided by annual invoiced sales","$200,000 x 52 weeks "]
[null,null,"Ratio =","5.2 weeks (The business is taking an average of 5 weeks to collect debt.)"]
[]
[null,null,"Expenses ratio"]
[null,null,"Expenses should always be kept as low as possible and under control in relation to previous years. You should look at the expense ratio particularly if the net profit ratio shows a downward trend. Different items of expenditure can also be calculated on this basis."]
[null,null,"Expenses ratio calculation"]
[null,null,"Cost of Goods Sold",{"v":40000,"d":"$40,000"}]
[null,null,"Divided by annual sales",{"v":200000,"d":"$200,000"}]
[null,null,"Ratio =","0.2 or 20%"]
[]
[]
[]
[null,null,"Please note that this is a guide only and should neither replace competent advice, nor be taken, or relied upon, as financial or professional advice.  Seek professional advice before making any decision that could affect your business. "]