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Key corporate accounting ratios

Key corporate accounting ratios - Microsoft Excel Tutorial

From the course: Excel for Accountants

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Key corporate accounting ratios

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- [Instructor] In addition to recording information and transactions, accountants are often called upon to help distill that information into easily digestible summaries of how a firm is positioned. To do that, financial ratios are typically used. Excel makes putting these ratios together very simple. I'm in the 0306 Begin Excel file. Now, of course, there's numerous ratios that a firm might want, and in reality, the types of ratios that a firm will use will vary depending on the industry that the firm is in. But in our case, I'm using four simple ratios that we want to go through and calculate. And these are widely used across a variety of industries. We've got the debt to asset ratio, current assets to current liabilities, debt to EBITDA, and return on assets. This first ratio, the debt ratio, will give us a sense for whether or not the firm has too much debt on its hands. Next, we can look at whether or not the firm is in a strong liquidity position based on the current assets to…

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