What is a business ratio calculator?

A business ratio calculator is a financial tool business owners can use to determine how “healthy” their business is. There are a lot of different types of business ratio calculators out there. There’s calculators for most of the core business ratios, like your current ratio, quick ratio, debt-to-assets ratio, return on assets ratio, gross profit margin and operating profit. All you need is your current financial statements and you can pretty easily guess at the state of your business using one or more of the below calculators.

Where can I find a free business ratio calculator?

Here are a few useful online business ratio calculators you can use for free:

Bankrate.com
DinkyTown.net
CalcXML
Sure Payroll

Why should I use a business ratio calculator?

Because business ratio calculators are a quick way to assess the health of your business at a given time. As a business owner, you need to be always aware of the financial state of your business, to measure how profitable you are or at least how close you are to profitability. For example, is your business able to pay its debts? You can know this pretty quickly just by running your current numbers through a current ratio calculator or a quick ratio calculator. How profitable is your business? Use a gross margin calculator or operating profit calculator to find out. How capable are you of getting a business loan? A debt-to-assets ratio can help you figure that out.

Business ratios (expressed either as decimal or percentage) are simple comparisons of two or more components of your financial statements. But, though simple, they are powerful tools for making quick decisions and spotting red flags before it’s too late. Using business ratio calculators regularly is never a bad idea.