Ratios

Ratios

Calculate financial ratios for "$ARGUMENTS". Compute key ratios across liquidity, profitability, leverage, and efficiency to assess overall financial health and benchmark against industry standards.

Prerequisites

None — utility skill, run anytime. Works best when financial data exists in .metapowers/finance/$ARGUMENTS/.

Process

1. Gather context:

   • If prior phase artifacts exist, read them for financial data
   • Ask for income statement, balance sheet, and cash flow data
   • Determine the industry for benchmarking context
   • Reference financial-model-template.md for ratio definitions

2. Calculate liquidity ratios:

   • Current Ratio: Current Assets / Current Liabilities (target: > 1.5)
   • Quick Ratio: (Cash + Receivables) / Current Liabilities (target: > 1.0)
   • Cash Ratio: Cash / Current Liabilities
   • Working Capital: Current Assets - Current Liabilities

3. Calculate profitability ratios:

   • Gross Margin: (Revenue - COGS) / Revenue
   • Operating Margin: Operating Income / Revenue
   • Net Margin: Net Income / Revenue
   • EBITDA Margin: EBITDA / Revenue
   • Return on Equity (ROE): Net Income / Shareholders' Equity
   • Return on Assets (ROA): Net Income / Total Assets

4. Calculate leverage ratios:

   • Debt-to-Equity: Total Debt / Total Equity
   • Debt-to-Assets: Total Debt / Total Assets
   • Interest Coverage: EBITDA / Interest Expense
   • Equity Multiplier: Total Assets / Total Equity

5. Calculate efficiency ratios:

   • Revenue per Employee: Annual Revenue / Headcount
   • Days Sales Outstanding (DSO): (Receivables / Revenue) x 365
   • Days Payable Outstanding (DPO): (Payables / COGS) x 365
   • Cash Conversion Cycle: DSO + DIO - DPO
   • Asset Turnover: Revenue / Total Assets

6. Benchmark and assess:

   • Compare ratios to industry medians where known
   • Identify ratios that are strong, acceptable, or concerning
   • Track trends over time if historical data is available
   • Flag any ratios outside acceptable ranges

7. Write the artifact to .metapowers/finance/$ARGUMENTS/ratios.md with sections:

   • Liquidity Ratios — values, benchmarks, assessment
   • Profitability Ratios — values, benchmarks, assessment
   • Leverage Ratios — values, benchmarks, assessment
   • Efficiency Ratios — values, benchmarks, assessment
   • Overall Financial Health — summary scorecard
   • Recommendations — areas to improve

Output

The ratio analysis written to .metapowers/finance/$ARGUMENTS/ratios.md. Present a summary highlighting:

• Overall financial health score
• Strongest and weakest ratio categories
• Key ratios outside acceptable ranges
• Priority improvement areas