Financial Ratios Dashboard
Compute 30+ Financial Ratios
Enter values from your latest balance sheet, P&L and cash flow statement (in rupees crore). All inputs map to Schedule III line items. Mandatory disclosure ratios are flagged with a Schedule III badge in the output.
What This Dashboard Does
The Financial Ratios Dashboard takes one set of financial-statement inputs and produces over thirty ratios organised into six analytical categories. Each ratio is a single-purpose calculator collapsed into a unified view, calibrated for Indian regulatory and sector context. The dashboard exists because professional analysts rarely look at one ratio in isolation — credit appraisal, audit, due diligence and statutory disclosure all require simultaneous reads across liquidity, leverage, profitability, efficiency, cash flow and valuation.
Three design choices distinguish this dashboard from generic foreign tools. First, the eleven Schedule III mandatory ratios under Companies Act 2013 are visually tagged so audit and finance teams can prepare Notes to Accounts disclosure directly from the output. Second, every ratio is benchmarked against Indian sector medians from BSE-listed and CRISIL-rated peer studies. Third, the dashboard explicitly aligns with ICAI's Guidance Note on Schedule III computational standards — including average versus closing balance treatment, EBIT versus PBT distinctions, and Capital Employed definitions.
The Six Categories
| Category | Ratios | What It Measures |
|---|---|---|
| Liquidity | 5 | Short-term obligation coverage |
| Solvency / Leverage | 6 | Long-term financial structure and debt servicing |
| Profitability | 8 | Earnings generation across margin and return metrics |
| Efficiency / Activity | 6 | Asset and working-capital productivity |
| Cash Flow | 4 | Cash generation quality and capex coverage |
| Valuation (listed only) | 4 | Price to fundamentals — equity market view |
Schedule III — The 11 Mandatory Ratios
Companies (Accounts) Amendment Rules 2021, notified vide G.S.R. 207(E) dated 24 March 2021, inserted Note 6(W) into Schedule III of the Companies Act 2013. From financial year 2021-22 onwards, every company preparing financial statements under Schedule III — Division I (Indian GAAP) or Division II (Ind AS) — must disclose eleven specific financial ratios in the Notes to Accounts. The amendment was driven by NFRA and ICAI concerns about unstructured disclosure and was timed alongside the CARO 2020 reporting framework to standardise comparability across listed and unlisted entities.
The 11-Ratio Framework
| # | Ratio | Numerator | Denominator |
|---|---|---|---|
| 1 | Current Ratio | Current Assets | Current Liabilities |
| 2 | Debt-Equity Ratio | Total Debt | Shareholders' Equity |
| 3 | Debt Service Coverage | EBITDA (or PAT + D&A + Interest) | Interest + Principal Repayments |
| 4 | Return on Equity | PAT − Preference Dividend | Average Equity |
| 5 | Inventory Turnover | Cost of Goods Sold or Sales | Average Inventory |
| 6 | Trade Receivables Turnover | Net Credit Sales | Average Receivables |
| 7 | Trade Payables Turnover | Net Credit Purchases | Average Payables |
| 8 | Net Capital Turnover | Net Sales | Working Capital |
| 9 | Net Profit Ratio | PAT | Net Sales |
| 10 | Return on Capital Employed | EBIT | Capital Employed (= Net Worth + Total Debt + Deferred Tax Liability) |
| 11 | Return on Investment | Investment income (TWRR method) | Average Investment Value |
The 25% Variance Rule
Where any of the eleven ratios changes by more than twenty-five percent, positive or negative, compared to the immediately preceding financial year, the company must explain the variance in the Notes to Accounts. The disclosure must identify the cause — operational change, capital structure shift, regulatory event, accounting policy change, or one-time item. The threshold is on absolute change, not direction. Auditors verify both the computation and the management explanation. Non-disclosure or misstatement attracts auditor qualification under Section 129(7) of the Companies Act 2013.
Computational consistency matters. ICAI Guidance Note on Schedule III prescribes use of average opening and closing balances for turnover ratios — not year-end snapshots. Prior-year figures must be restated for like-for-like comparison if accounting policies changed or material reclassifications occurred. The dashboard uses end-of-period values by default; auditors should compute averaged versions during final disclosure preparation.
Applicability Across Entity Types
- All Companies under Schedule III — Listed, unlisted, public, private, OPC, Section 8, Producer, Nidhi, Small Companies. No automatic exemption.
- Both Divisions — Division I (Companies preparing under Indian GAAP) and Division II (Companies preparing under Ind AS) are equally covered.
- NBFCs under Division III — Follow a parallel disclosure regime aligned with RBI prudential ratios; generic dashboard ratios are supplementary.
- LLPs — Not legally required but may voluntarily adopt for internal benchmarking and lender presentations under MSMED rating frameworks.
The Six Ratio Categories Explained
Liquidity Ratios — Short-Term Solvency
Liquidity ratios measure the company's ability to meet obligations falling due within twelve months. A current ratio of 1.5 to 2.0 is healthy for most industries; below 1.0 signals near-term distress. Quick ratio strips inventory (which may be slow-moving or obsolete) and targets 1.0 or higher. Cash ratio is the most conservative — only cash and equivalents against current liabilities. The Operating Cash Flow Ratio links liquidity to actual cash generated rather than balance sheet positions, making it the strongest liquidity indicator for cyclical businesses.
Solvency & Leverage Ratios — Long-Term Structure
Solvency ratios measure the equity cushion absorbing losses before creditors take a hit and the company's ability to service debt. Debt-to-Equity below 1.0 is conservative; above 2.0 signals high leverage typical of capital-intensive sectors. Interest Coverage Ratio above 3.0× is comfortable; below 1.5× signals debt-servicing stress and triggers SA 570 review. Debt Service Coverage Ratio extends the analysis to principal repayments. Equity Multiplier (Total Assets / Equity) feeds DuPont analysis decomposition of ROE.
Profitability Ratios — Earnings Quality
Profitability ratios decompose earnings generation across the income statement and balance sheet. Margin ratios (Gross, Operating, EBITDA, Net) reveal pricing power and cost discipline. Return ratios (ROE, ROA, ROCE, ROIC) measure capital efficiency. ROCE is the cleanest measure of operating performance because it strips capital structure effects. ROE captures shareholder returns including the leverage uplift. CRISIL typically targets ROCE above 15% for investment-grade ratings on industrial entities.
Efficiency / Activity Ratios — Asset Productivity
Efficiency ratios reveal how effectively management converts assets into sales. Asset Turnover spans the full balance sheet; Inventory and Receivables Turnover focus on working capital cycle components. The Cash Conversion Cycle aggregates the three turnover ratios into days — a single metric capturing the time from supplier payment to customer collection. Indian manufacturers typically run 60-120 day CCC; modern retail and FMCG often run negative CCC by design.
Cash Flow Ratios — Reality Check on the P&L
Cash flow ratios validate reported profit. A company can report PAT through accruals (revenue recognition, capitalisation, deferral of expenses) while burning cash. Operating Cash Flow / Net Income near 1.0 indicates clean earnings; persistently below 0.7 suggests aggressive accruals worth investigating. Free Cash Flow (OCF − CapEx) measures discretionary cash available for debt repayment, dividends, and reinvestment. SEBI LODR requires listed entities to disclose cash flow movements quarterly, making this category critical for investor relations.
Valuation Ratios — The Market's View (Listed Only)
Valuation ratios connect financial statement metrics to equity market prices. P/E captures price relative to earnings; P/B captures price relative to book equity; P/S captures price relative to revenue (useful when earnings are negative or distorted). Earnings Yield (1 ÷ P/E) is the inverse — directly comparable to G-Sec yields and FD rates for asset-allocation decisions. Use Patron's standalone P/E Ratio Calculator for deeper sector benchmarking and PEG analysis.
Need a Schedule III ratio audit?
Patron's audit and advisory team computes Schedule III mandatory ratios with averaged-balance methodology, prepares the 25% variance reconciliation, drafts management commentary, and aligns disclosure with SA 570 going-concern review. Fixed-fee, time-bound, CA-signed.
Sector Calibration for Indian Companies
Ratios in isolation mean little — sector context anchors interpretation. A Current Ratio of 1.3 is alarming for an IT services firm but normal for a capital goods manufacturer. A D/E of 2.5 is dangerous for FMCG but standard for telecom and infrastructure. The dashboard's verdict logic uses sector medians drawn from BSE 500 listed peer studies and CRISIL-rated unlisted SME borrowers.
| Sector | Current Ratio | D/E | EBITDA Margin | ROE | Asset Turnover |
|---|---|---|---|---|---|
| IT / Software Services | 2.0 – 4.0 | 0.0 – 0.2 | 22 – 28% | 20 – 30% | 1.0 – 2.0 |
| FMCG | 1.0 – 1.5 | 0.0 – 0.5 | 18 – 25% | 20 – 60% | 1.5 – 3.0 |
| Pharma | 1.8 – 3.0 | 0.2 – 0.6 | 20 – 28% | 15 – 22% | 0.7 – 1.2 |
| Manufacturing — Listed | 1.3 – 2.0 | 0.5 – 1.2 | 10 – 18% | 12 – 18% | 1.0 – 1.5 |
| Manufacturing — SME / Private | 1.2 – 1.8 | 0.8 – 2.0 | 8 – 14% | 10 – 20% | 1.2 – 2.0 |
| Modern Retail | 0.7 – 1.2 | 0.5 – 1.5 | 5 – 10% | 15 – 30% | 2.5 – 4.0 |
| Real Estate | 1.5 – 3.0 | 0.6 – 1.5 | 15 – 25% | 8 – 15% | 0.2 – 0.5 |
| Infrastructure / Power | 1.0 – 1.4 | 1.5 – 3.0 | 20 – 35% | 10 – 16% | 0.3 – 0.6 |
| Auto OEM | 0.9 – 1.3 | 0.5 – 1.5 | 10 – 16% | 12 – 20% | 1.3 – 2.0 |
| Telecom | 0.6 – 1.0 | 1.5 – 3.0 | 30 – 45% | 5 – 15% | 0.4 – 0.7 |
| Hospitality / Aviation | 0.8 – 1.3 | 1.0 – 2.5 | 15 – 25% | 8 – 18% | 0.5 – 1.0 |
Banks, NBFCs, and insurance entities follow regulatory frameworks under RBI prudential norms (Basel III, CAR, NPA ratios) and IRDAI Solvency Margin requirements — generic ratio dashboards are not applicable. Use specialised regulatory dashboards for financial sector entities.
Common Misinterpretations
High Current Ratio Is Not Always Healthy
A Current Ratio above 3.0 may indicate idle working capital, slow-moving inventory, or stuck receivables — capital that should have been deployed productively. Examine the underlying composition: high inventory plus high receivables with flat revenue points to working capital build-up, not strength. Pair with Inventory Turnover and Receivables Turnover before celebrating.
High ROE Can Mask Leverage Risk
ROE = Net Margin × Asset Turnover × Equity Multiplier (DuPont decomposition). A 25% ROE driven by 4× Equity Multiplier (i.e. high leverage) is more fragile than a 18% ROE from operating excellence at low leverage. Always pair ROE with ROCE, ROIC and Debt-to-Equity. The 2008 crisis exposed many "high ROE" companies that collapsed when refinancing markets froze.
Negative Working Capital Is Not Universally Distress
FMCG, modern retail, food-delivery platforms, and marketplace businesses run negative working capital by design — collecting from customers within days while paying suppliers in 30-60 days. The structural float funds operations interest-free. Asian Paints, HUL, DMart, Avenue Supermarts have compounded earnings with negative working capital for decades. Read the Cash Flow category alongside Liquidity before flagging concern.
Schedule III Compliance Is Not Schedule III Strategy
Disclosing the eleven ratios meets the minimum legal requirement under Companies (Accounts) Amendment Rules 2021. Building actual financial health requires acting on what the ratios reveal — restructuring debt before covenants breach, raising equity before market windows close, exiting non-core businesses before they consume working capital. The disclosure is descriptive; the strategic response is prescriptive.
One Year Snapshot vs Three-Year Trend
A single-year ratio set can be distorted by exceptional gains, one-time impairments, or windfall settlements. Always compute ratios for at least three consecutive years. The Schedule III 25% variance rule exists precisely because year-on-year comparison surfaces what absolute thresholds miss. Trend direction beats absolute level for forward-looking risk assessment.