Free Ratio Analysis Calculator New Delhi

Ratio Analysis Calculator


Financial Statements are prepared by companies to demonstrate its financial activity to stakeholders. These are prepared at regular intervals, and typically contain at least a balance sheet and an income statement. The balance sheet shows the value of a company's accounts at a given point in time. The income statement shows the financial effects of activities over a given period of time.

Analysis of Leverage
Analysis of Leverage is used to evaluate how effectively management is using borrowed funds to make a return for income. Typically, funds are raised by debt in order to enhance the return to shareholders. This is done by financing the company’s assets with debt, which requires a fixed payment of interest. If the assets financed by debt generate pretax net income sufficient to repay this interest, then any additional net income is profit that goes to the shareholders.

A company’s assets can be divided into assets funded by equity, and assets funded by debt. It is possible to analyze the efficiency with which a company’s assets generate pretax income, and allocate this income in proportion to the capital structure. We can then determine the amount that each set of assets contributes to net income. We would expect that management would be able to use assets financed by debt to generate enough net income to pay the borrowing costs, and hopefully produce additional income for the shareholders. If the income generated by the borrowed assets is negative, then it may be advisable for a company to alter its capital structure, or focus on improving the efficiency of its assets in regards to generating net income.



Gross Efficiency of Assets tells us how much income each dollar of assets generates before paying out taxes and interest. This tells us how efficiently management uses its assets.

Pretax Income is a made up of two sources, income from assets funded by shareholders equity, and assets funded by borrowed debt.

Income from Unleveraged Assets is the income generated by the assets funded by shareholders equity and operations.

Income from Leveraged Assets is the income generated by assets funded by borrowed debt.

Leveraged Assets Contribution to NI is the percentage of the pretax income that is provided by management’s use of debt to fund assets. Higher numbers show good use of debt. Negative number show losses generated by the assets financed by debt.

Sustainable Growth Rate
Sustainable Growth Rate is the maximum growth rate of a company if none of its ratios change and it does not raise new capital through selling shares.

Sustainable Growth Rate Formula

Sustainable Growth Rate Calculator

Use the Sustainable Growth Rate Calculator to calculate the sustainable growth rate from your financial statements.


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