# Financial Analysis

> Ratio analysis, cash flow, ROI, break-even, forecasting, and financial storytelling

- Skill: `cosmicstack-labs/financial-analysis` (Agent Skill)
- Install (CLI): `npx skillmds@latest add cosmicstack-labs/financial-analysis`
- Raw SKILL.md: https://api.skillmd.com/api/skills/cosmicstack-labs/financial-analysis/raw
- Safety review: pending
- Works with: Claude Code, Claude.ai, OpenAI Codex
- Category: Coding & Dev Tools
- Author: cosmicstack-labs (https://skillmd.com/u/cosmicstack-labs)
- Updated: 2026-09-17
- Page: https://skillmd.com/skills/cosmicstack-labs/financial-analysis

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# 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