cosmicstack-labs Financial Analysis
Analyze financial statements and business health.
Key Ratios
Profitability
| Ratio | Formula | Healthy |
|---|---|---|
| Gross Margin | (Revenue - COGS) / Revenue | >50% typical |
| Operating Margin | Operating Income / Revenue | >15% |
| Net Margin | Net Income / Revenue | >10% |
| ROE | Net Income / Shareholder Equity | >15% |
| ROA | Net Income / Total Assets | >5% |
Liquidity
| Ratio | Formula | Healthy |
|---|---|---|
| Current | Current Assets / Current Liabilities | >1.5 |
| Quick | (Current Assets - Inventory) / Current Liabilities | >1.0 |
| Cash | Cash & Equivalents / Current Liabilities | >0.5 |
Efficiency
| Ratio | Formula | Healthy |
|---|---|---|
| Asset Turnover | Revenue / Total Assets | Industry-specific |
| Inventory Turnover | COGS / Avg Inventory | Higher is better |
| DSO | (AR / Revenue) × 365 | <45 days |
Cash Flow Analysis
- Operating CF should be positive and growing
- Investing CF negative = investing in growth
- Financing CF reveals debt/equity strategy
- Free Cash Flow = Operating CF - CapEx
Break-Even Analysis
Break-Even Units = Fixed Costs / (Selling Price - Variable Cost)
Break-Even Revenue = Break-Even Units × Selling Price
Financial Storytelling
- Start with the headline (the "so what")
- Use trends, not snapshots (3-5 year view)
- Compare to benchmarks (industry, historical, budget)
- Highlight leading indicators, not just lagging
- Include risk factors and assumptions