Standard financial ratios give you (and possible investors) an indication of your business's strengths and overall health, the nuts and bolts. There are many non-standard ratios that can give people an indication of its heart and soul. We encourage companies who want to create strategic alliances, or look to be acquired (or seek a new acquisition) to develop both standard as well as non-standard ratios.

We work, and will continue to work, with all the major accounting firms. However, for these ratios we work with a group out of the University of Wisconsin, the AICPA, the Risk Management Association and Lotus (software) to provide the averages for key standard and non-standard ratios by industry, by business size, and by location.

Our goal is to develop new energy about critical ratios. Though simple division, when taken together over a period of several months, ratios provide a dimensional picture of the health of a business

Once registered, you can do one of three things:
1. Input the ratio information.
2. Download a ratio-generating, fnancial planning tool.
3. Enter the raw data and calculate the ratios yourself.

These ratios are a way of measuring your progress as compared with others in your industry, and then as a way of attracting investors. We believe to succeed in business requires constant self-analysis.

Here are a few critical ratios that are used:

Standard ratios: Liquidity
1. Current Ratio: Current assets divided by current liabilities.
2. Quick Ratio: Current assets minus inventories divided by current liabilities.
3. Cash Ratio: Total cash divided by current liabilities.
4. Working Capital (WC)
5. Working Capital/Assets
6. Return on Investment (ROI)
7. Return on Assets (ROA)
8. Return on Equity (ROE)

Stock Valuation ratios: Anticipated to be a new "derivative ratio".
Most small businesses owners hold the majority of equity in their business. Generally people believe any shares held by any early investors (largely family, fools and friends) can not be valued and therefore can not be sold, and that the intangibles of the business can not be measured or valued. These intangibles are most often the discrepancy between the seller and potential buyers valuations. And, though it may seem a long way off, there comes a time when every small business owner must sell, close the doors and/or liquidate the assets, or transfer the assets to family or friend.

1. Price/Earnings Ratio or P/E

Non-Standard ratios: Creating Alliances
1. Credit Scoring
2. Percentage of Charitable Giving
3. Return on Performance Ratio

Non-Standard ratios: Making the World a Better Place
1. Good Works Ratio (activity in charitable organizations)
2. Wisdom Ratio (activity in business counseling)