Financial Ratio Analysis 財務比率分析

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methodology methodology Contains Script含腳本

Analyze financial health using ratio categories: profitability, liquidity, leverage, efficiency, and valuation. Use this skill when the user needs to assess a company's financial performance, compare companies, evaluate creditworthiness, or prepare financial due diligence — even if they say 'is this company financially healthy', 'analyze these financial statements', or 'compare these two companies'.

商業方法論技能：Financial Ratio Analysis 分析與應用。

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Overview概述

Financial ratio analysis transforms raw financial statements into comparable metrics across five categories. Ratios are meaningful only in context — compare against industry benchmarks, historical trends, and peer companies.

When to Use使用時機

Trigger conditions:

User has financial statements and needs to assess company health
User comparing financial performance across companies
User performing due diligence or credit analysis
User asks "is this company financially healthy?" or "analyze these numbers"

When NOT to use:

For valuation → use DCF or comparables
For ROE deep-dive → use DuPont Analysis
For strategic assessment → use SWOT

Methodology 方法論

IRON LAW: Ratios Without Context Are Meaningless

A current ratio of 1.5 means nothing alone. Is 1.5 good? Compare to:
1. Industry average (retail ~1.2, manufacturing ~1.8)
2. Company's own trend (was it 2.0 last year? → declining liquidity)
3. Peers (competitor has 2.5? → relatively weak)

NEVER report a ratio without at least one comparison point.

IRON LAW: All Five Categories, Every Time

Analyzing only profitability misses a leveraged company about to default.
Analyzing only liquidity misses a profitable company's growth potential.
Cover all five categories for a complete picture.

The Five Categories

1. Profitability — Is the company making money?

Ratio	Formula	Measures
Gross Margin	(Revenue - COGS) / Revenue	Production efficiency
Operating Margin	EBIT / Revenue	Core business profitability
Net Margin	Net Income / Revenue	Bottom-line profitability
ROE	Net Income / Equity	Return to shareholders
ROA	Net Income / Total Assets	Asset productivity

2. Liquidity — Can it pay short-term obligations?

Ratio	Formula	Healthy
Current Ratio	Current Assets / Current Liabilities	> 1.5
Quick Ratio	(Current Assets - Inventory) / Current Liabilities	> 1.0
Cash Ratio	Cash / Current Liabilities	Context-dependent

3. Leverage — How much debt is used?

Ratio	Formula	Measures
Debt-to-Equity	Total Liabilities / Equity	Capital structure
Interest Coverage	EBIT / Interest Expense	Ability to service debt
Debt-to-Assets	Total Liabilities / Total Assets	Asset financing

⚠️ "Debt" definition: This skill (and the bundled script) defines "Debt" in the leverage ratios as Total Liabilities — not "long-term debt only" or "interest-bearing debt only". Both alternative definitions exist in textbooks and produce materially different ratios. If you need a different definition, document the choice explicitly and compute it manually; do not silently substitute.

4. Efficiency — How well are assets used?

Ratio	Formula	Measures
Inventory Turnover	COGS / Avg Inventory	Inventory management
Receivables Turnover	Revenue / Avg Receivables	Collection speed
Asset Turnover	Revenue / Total Assets	Asset productivity
Cash Conversion Cycle	DIO + DSO - DPO	Cash cycle speed

5. Valuation — Is the stock fairly priced?

Ratio	Formula	Measures
P/E	Price / EPS	Price vs earnings
EV/EBITDA	Enterprise Value / EBITDA	Price vs cash generation
P/B	Price / Book Value per Share	Price vs net assets
Dividend Yield	Dividend per Share / Price	Income return

Analysis Process

Calculate all relevant ratios from financial statements
Compare against industry benchmarks and 3-year trend
Identify red flags (declining trends, outliers vs peers)
Synthesize a financial health verdict across all five categories
Recommend actions based on weak areas

Output Format輸出格式

⚠️ Decimal vs percent: The bundled script returns all profitability ratios (gross_margin, operating_margin, net_margin, roa, roe) as decimals — 0.35 means 35%, NOT 35.0. Liquidity and leverage ratios are already unitless multiples (e.g. current_ratio: 2.125). Render percentages only in the human-facing markdown report, never in JSON outputs.

# Financial Ratio Analysis: {Company}

Examples範例

Correct Application

Scenario: Ratio analysis for a Taiwanese electronics manufacturer

Ratio	Company	Industry	Trend	Flag
Gross Margin	18%	22%	↓ from 21%	🔴 Below peers, declining
Current Ratio	1.8	1.5	→ stable	🟢 Adequate
D/E	1.2	0.8	↑ from 0.9	🟡 Rising leverage
Inventory Turnover	4.2x	6.0x	↓ from 5.1x	🔴 Slow inventory

Synthesis: Profitability weakening + inventory building up + leverage rising = potential working capital crisis ahead ✓

Incorrect Application

Reported "Gross Margin 18%" as standalone fact → No comparison. Is 18% good or bad? Violates Iron Law: ratios without context.
Only analyzed profitability ratios, missed D/E of 4.5x → Company appeared healthy by margins but was dangerously overleveraged. Violates Iron Law: all five categories.

Gotchas注意事項

Industry matters enormously: A 5% net margin is terrible for software (expect 20-30%) but excellent for grocery retail (expect 2-3%). Always benchmark within industry.
One-time items: Restructuring charges, asset sales, or legal settlements distort ratios for that period. Use adjusted figures or note the distortion.
Seasonal businesses: Ratios at different quarter-ends tell different stories. Use trailing 12-month or compare same quarter YoY.
Off-balance-sheet items: Operating leases (pre-IFRS 16), special purpose vehicles, and contingent liabilities may not appear in standard ratios. Check footnotes.
Growth companies look "unhealthy": High-growth companies often have low profitability, high leverage, and negative cash flow by design. Context matters.

References參考資料

For industry-specific benchmark ranges, see references/industry-benchmarks.md
For DuPont deep-dive on ROE, see the biz-dupont skill

Tags標籤

financefinancial-ratiosfinancial-analysis