Financial Ratios Calculator
Turn your balance sheet into the liquidity and leverage ratios lenders and investors watch — current ratio, quick ratio and debt-to-equity.
A worked example
Running this tool on current national benchmarks (Federal Reserve / Freddie Mac via FRED (St. Louis Fed)) — swap in your own numbers to see how the result moves.
- Current assets
- $250,000
- Inventory (of current assets)
- $80,000
- Current liabilities
- $120,000
- Total liabilities
- $350,000
- Total equity
- $400,000
strong liquidity
- Current ratio2.08×
- Quick ratio1.42×
- Debt-to-equity0.88×
How the current ratio changes with current assets
Holding the other inputs at the example above, here is how the result moves as current assets changes.
| Current assets | Current ratio | Current ratio |
|---|---|---|
| $100,000 | 0.83× | 0.83× |
| $250,000 | 2.08× | 2.08× |
| $500,000 | 4.17× | 4.17× |
| $1,000,000 | 8.33× | 8.33× |
The math behind it
From a few balance-sheet figures the calculator derives four numbers. The current ratio is current assets divided by current liabilities. The quick ratio strips out inventory first — current assets minus inventory, divided by current liabilities — for a stricter liquidity test. Debt-to-equity is total liabilities divided by total equity, a leverage gauge. Working capital is current assets minus current liabilities, in dollars.
Assumptions & limits
- Inputs are point-in-time balance-sheet values; the ratios describe your position on that date, not over a period.
- The quick ratio removes only inventory from current assets; some stricter versions also remove prepaid expenses.
- Debt-to-equity uses total liabilities over total equity; if equity is zero or negative, the ratio is undefined or infinite.
- Healthy ranges vary widely by industry — a capital-intensive business carries more leverage than a service firm as a matter of course.
Reading the ratios
Rough benchmarks; healthy ranges differ by industry.
| Ratio | General guide |
|---|---|
| Current ratio | Above 1.0 is the baseline; 1.5 to 2.0 is comfortable |
| Quick ratio | Around 1.0 or higher means liquid without selling stock |
| Debt-to-equity | Under about 1.5 is conservative; higher means more leverage |
| Working capital | Positive means current assets cover current bills |
Common questions
What is the difference between the current ratio and the quick ratio?
Both measure whether you can cover short-term bills, but the quick ratio is stricter. The current ratio counts all current assets, including inventory. The quick ratio removes inventory, because stock can be slow or hard to sell in a pinch. A business with a solid current ratio but a weak quick ratio is leaning heavily on inventory it may not be able to liquidate fast.
What does debt-to-equity tell a lender?
It shows how much of the business is funded by borrowing versus owner and investor capital. A ratio of 1.0 means debt and equity are balanced; a higher number means the business relies more on debt, which raises risk and interest burden. Lenders watch it because a highly leveraged business has less cushion to absorb a downturn before defaulting.
Why does the calculator ask for inventory separately?
Because inventory is the least liquid current asset, and the quick ratio deliberately excludes it. By entering inventory on its own, the tool can compute both the current ratio (which includes it) and the quick ratio (which strips it out), giving you the lenient and the strict view of your short-term liquidity side by side.