Calculate your current business ratio below. Your current ratio is a basic comparison of current assets to current liabilities, which is calculated by dividing your current assets by your current liabilities. When applying for a loan, the bank may use the current ratio to measure a company's liquidity or ability to pay off short-term debts.

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#### So What?

Measuring your current business ratio is important to track regularly, probably on a quarterly basis. This allows you to have a basis for comparison with previous quarters and years. Changes in your company's current ratio over a period of years can point out problems and successes. A declining current ratio could be pointing to financial problems. An improving ratio could be the result of a brighter financial picture or an overstocked warehouse (inventory is considered an asset). The key here is to find out WHY a ratio has changed.

#### Gross Profit Margin Calculator

Calculate your business' gross profit margin below. Gross profit margin is a financial metric used to assess a company's financial health and business model by revealing the proportion of money left over from revenues after accounting for the cost of goods sold. Gross profit margin, also known as gross margin, is simply calculated by dividing gross profit by total revenue.

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#### So What?

You can use your gross profit margin ratio to help you set and monitor sales goals for your company. You should measure this ratio very frequently - some businesses measure this daily, others monthly.

Because costs for raw materials, labor and manufacturing expenses all play into your profit margin ratio, a change in this ratio over time could mean it's time to look for new suppliers or review your pricing structure.

As an example, a gross profit margin of 0.33:1 means that for every dollar in sales, you have 33 cents to cover your basic operating costs and profit.

Some business owners will use an anticipated gross profit margin to help them actually set the price of their products. While other factors -- such as competition and demand -- may also play into pricing decisions, a gross profit margin is a good starting point for product pricing. For example, if a product costs \$80 to produce, and your gross profit margin is 20 percent, you can calculate your pricing by dividing your cost by (1-.0.2). In this case, \$80 divided by .8 would yield a price of \$100.

#### Operating Profit Margin Calculator

Your Operating Profit Margin is a measurement of what proportion of a company's revenue is left over after paying for variable costs of production such as wages, raw materials, etc. Operating margin can also be known as as "operating profit margin," "return on sales," or as "net profit margin."

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#### So What?

Your operating profit percentage tells you the percentage of your sales that turn into profit. Because the figure excludes miscellaneous income and tax expenses, the operating profit percentage produces an accurate picture of the profitability of your primary business. Reductions in this figure over time might indicate a need to re-evaluate your pricing or your suppliers, or look for ways to cut down on your operating expenses.

#### Debt-to-Assets Calculator

The debt-to-assets ratio is an indicator of your business' financial leverage. The debt-to-assets ratio indicates the proportion of a company's assets that are being financed with debt, rather than equity. The debt-to-assets ratio is calculated by dividing a corporation's total liabilities by its total assets.

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#### So What?

The number tells you what portion of your assets are paid for with borrowed money. For example, a 72 percent debt-to-assets ratio means that your creditors have supplied about 72 cents of every dollar of your company's assets. Businesses with a high debt-to-assets ratio may have trouble borrowing any more money or may have to pay a higher interest rate on a loan than it would if its ratio were lower.

#### Return on Assets Calculator

Return on Assets is an indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how efficient management is at using its assets to generate earnings. This is calculated by dividing a company's annual earnings by its total assets, ROA is displayed as a percentage.

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#### So What?

A return on assets ratio of 0.05:1 would mean the company is pulling in five cents for each dollar of assets.

Like most business ratios, you can learn the most from this one when you compare it to your ROA ratios from previous years and with the industry norms. You should measure this at least quarterly.