ICAEW.com works better with JavaScript enabled.

Financial ratios

Financial ratios are used to measure and evaluate company performance by comparing items on financial statements. On this page you can find links to ratio calculators, guidance and formulas.

Examining Accounts: Business Ratios
This is HMRC manual EM3080, for reviewing accounts as part of an investigation. The manual provides detailed explanations for a selection of business ratios. Please note that some passages of text within the manual are withheld under exemptions to the Freedom of Information Act 2000.

Understanding Financial Ratios
Company Partners explain liquidity, solvency, efficiency and profitability ratios and provide guidance on using them in practice. The page also looks at some limitations of ratio analysis.

Financial ratio tutorial
Investopedia article which gives explanations and formula for 6 basic financial ratios: Working capital; Quick;  Earnings Per Share (EPS); Price-Earnings (P/E); Debt-to-Equitty; Return on Equity (ROE)

Guide to financial rations
More in-depth Investopedia article looking at further ratios covering: Profitability; Liquidity; Solvency; Valuation; 


The Library provides full text access to a selection of key business and reference eBooks from leading publishers. eBooks are available to logged-in ICAEW members, ACA students and other entitled users. If you are unable to access an eBook, please see our Help and support advice or contact library@icaew.com.

The key performance ratios

The FT guide gives looks at the key financial and shareholder ratios in chapter 18 'Company and investor lives'. Appendix 2 gives the formulas for calculating the ratios.

Terms of use: You are permitted to access, download, copy, or print out content from eBooks for your own research or study only, subject to the terms of use set by our suppliers and any restrictions imposed by individual publishers. Please see individual supplier pages for full terms of use.

Further resources

See the Library's Knowledge Guides for more in-depth information on:

Can't find what you are looking for?

If you're having trouble finding the information you need, ask the Library & Information Service. Contact us by telephone on +44 (0)20 7920 8620, by web chat or by email at library@icaew.com.

ICAEW accepts no responsibility for the content on any site to which a hypertext link from this site exists. The links are provided ‘as is’ with no warranty, express or implied, for the information provided within them. Please see the full copyright and disclaimer notice.