Ratio Analysis Summary Checklist
Use: To determine the “Quality” of the Business
Source: Rocky Wade, University of Oklahoma Economic Development Institute
Explain Comments/Trends
Income Statement Ratios:
Industry
How is the business controlling costs?
What size businesses are being
compared to International?
1. Are Sales Increasing?
Yes
No
2. Is the Cost of Goods (COGS)/Sales percentage
stable over time?
If not, is it declining over time?
Yes
No
3. Are COGS/Sales percentages consistent with,
or better than, the industry?
Yes
Yes
No
No
What about the group of
businesses that was
smaller? _______%
Subject business COGS/Sales: _____%
4. Is the Operating Expenses (SGA) /Sales
percentage stable over time?
If not, is it declining over time?
Yes
5. Is Operating Expenses (SGA) / Sales %
consistent with, or better than, the industry?
Yes
Yes
No
No
No
What about the group of
businesses that was
smaller? _______%
Subject business COGS/Sales: _______%
6. Are profits increasing?
Yes
No
7. Is the profit margin (EBT/Sales %) increasing?
Yes
No
8. Is the profit margin consistent with, or better
than, the industry?
Yes
No
Subject business EBT/Sales: _______%
What about the group of
businesses that was
smaller? _______%
Explain Comments/Trends
Balance Sheet Ratios:
How liquid is the business?
9. Is the Current Ratio at least 1:1?
10. Is the Current Ratio consistent with, or better
than, the industry?
Subject business Current Ratio: ___/___
Industry
Yes
No
Yes
No
High ____
Med ____
Low ____
11. Is the Quick Ratio stable?
If not, is it declining?
12. Is the Quick Ratio consistent with, or better
than, the industry?
Subject business Current Ratio: ___/___
High ____
Med ____
Low ____
13. Is the Debt/Equity ratio stable?
If not, is it declining?
14. Is Debt/Equity ratio consistent or better than
the industry?
Subject business Debt/Eq: ____/_____
Yes No
Yes No
Yes No High ____
Med ____
Low ____
15. Is working capital positive?
Yes
No
Explain Comments/Trends
Operating Cycle Ratios:
How is cash used in the business operations?
14. Are Days Receivable stable?
If not, are they declining?
15. Are Days Receivable consistent with or better
than, the industry?
Subject business D/R: ______Days
16. Are Days Inventory stable?
If not, are they declining?
17. Are Days Inventory consistent with or better
than, the industry?
Subject business D/I: _____Days
18. Are Days Payable stable?
If not, are they declining?
19. Are Days Payable consistent with or better
than, the industry?
Subject business D/P: _____ Days
20. Is the Operating Cycle stable?
If not, is it declining?
21. What is the total Operating Cycle?
Subject business OC: ____ days
Industry/RMA
Yes No
Yes No
Yes No Best ____
Med ____
Worst ____
Yes No
Yes No
Yes No Best ____
Med ____
Worst ____
Yes No
Yes No
Yes No Best ____
Med ____
Worst ____
Yes No
Yes No
TOTAL _________
Note: Can’t determine
total from RMA