The most important financial indicators of a company
If you are the owners of a company, large or small it is, there are many things that you are responsible for. One of the things you must keep in mind our capital ratios. To keep them in mind, however, we need to know what they are and, more importantly, to know the different types of them. Indexes are data that are constructed in order to assess the situation on the balance sheet and the cash flows of a company. These indices, also called financial ratios, can be divided into three categories: index sheet, profitability and liquidity. In turn, the index sheet can be of different types, among which the most important are those for analysis of structure, financial autonomy and coverage.
Among the indices for structure analysis are:
The stiffness of the investment, which is the ratio of fixed assets to total investment. It is calculated by dividing the total current assets by total investments and multiplying the result by one hundred and the Elasticity of investment, ie the ratio of current assets to total assets.
Rigidity of sources of capital, which represents the degree of coverage of financial assets with equity and long-term debt. The higher this value, the lower the risk of the company not being able to deal with short-term debt-Elasticity of the sources of capital, which is complementary to the rigidity. It indicates the increased risk of the company having to deal with short-term debt
The index of financial autonomy instead correlates with its own capital resources of third parties or third-party media/Equity. With this index, we can assess whether our company is independent or whether it depends too much on outside investment to it: if the index is equal to 0 there is an absence of debt, from 0 to 0.50 it is in favor of developing a level, from 0.50 to 0.80 there is a situation of equilibrium and between 0.80 and 2.0 there is a debt situation to control. Finally, if the index is equal to or greater than 2.0 there is an imbalance blown.
This formula can also be used to control the ratio to the capital invested, the latter replacing the original capital. Last, but not least, there is the coverage ratio, through which we can understand how the company is able to cover its expanses using only its own resources.