Asset turnover measures revenue generated per unit of assets. Higher ratios indicate better performance, as more revenue is generated per dollar of assets. It impacts profitability and debt service ability.

Current ratio measures short-term liquidity using short-term assets. It includes inventories, but valuation differences and economic value can affect accuracy. Low ratios may indicate difficulty meeting obligations, but context and industry matter. Extreme ratios signal potential trouble.

Days payables is the average time to pay trade creditors. Calculation accuracy requires adjusting for VAT inclusion/exclusion for consistent comparison.

Days receivables express the average time it takes the company to cash in its invoices from customers. The same problem with VAT arises in calculating Days Receivables.

Debt to Equity Ratio Debt to Equity Ratio compares the financial resources provided by debtholders with those provided by the shareholders. This ratio is used to monitor the company’s financial risk. The value of the Debt is given by:  A. Current Bank debtB. Current portion of non current debtC. Other Current financial debtD. Current Financial Debt (A)+(B)+(C) […]

Debt to Operating Cash flow ratio Debt to EBITDA ratio is a solvency metrics that, differently from Debt to EBITDA ratio, takes into account the actual cash flow generated by operating activities and compares it to the amount of financial liabilities.  Discover all the features of the software. Request a video call demo with one of our consultants right away.

Debt/Ebitda Debt/Ebitda gauges the time needed for a company to repay its debt, utilizing all potential operating earnings (EBITDA). it serves as a metric to gauge the company’s debt repayment timeline by utilizing its potential operating earnings (EBITDA). When the Debt/Ebitda ratio is 3, it signifies that dedicating all EBITDA to debt repayment (excluding available […]

DSCR The index, defined as Debt Service Coverage Ratio or debt service bankability indicator, expresses the capacity of the enterprise to generate sufficient cash to service the debt in its two components, represented by principal and interest. It is the ratio, calculated for any given time period of the life of the loans, between the […]

The EBIT Margin measures the profitability of sales, indicating how much sales revenue turns into operating profits. This index is significantly affected by the specific characteristics of the sector. For example, the big retailers (supermarkets, hypermarkets, etc.) will have a relatively low it Margin, because their high sales volume is not capable of generating much revenue. In contrast, business […]

Earnings Before Interest and Tax is calculated as revenue minus expenses, excluding tax and interest. It is a measure of a company’s earnings from its ordinary, continuing operations. Earnings from non-recurring, one-off operations or activities and financial result are not included. EBIT is the same as operating profit and trading profit.  Two methods can be […]