Ratio analysis: return, liquidity and solvency, and converting turnover to days

What this note covers

1. Why ratios exist: turning report figures into a judgement
2. Profitability (return) ratios: return on equity, return on assets, margins
3. Liquidity ratios: working capital and quick ratio
4. Solvency ratios: debt ratio, debt/equity and times interest earned
5. Worked example: computing turnover ratios and converting to days
6. Interpreting ratios together and their limitations
7. How SACE examines ratio analysis and what separates a top response

7 sections · 12 key terms & formulas · 6 common mistakes