Four Key Ratios to Strengthen Financial Fortitude

<p><br>Ratios—the bread and butter of financial analysis. Calculations that offer us important insights into the financial health of our business. However, if you’re like most Founders, you’ve probably not taken the time to analyze them. Perhaps, you didn’t know where to start, or if you were able to crunch the numbers, you weren’t sure of what your numbers were trying to tell you. Oftentimes, Founders are encouraged to compare their numbers to <a href="https://www.ic.gc.ca/eic/site/pp-pp.nsf/eng/home">industry benchmarks</a> which, as we’ll see in Part 3, can sometimes work against us.</p><p> </p><p>Clarifying ratios and making them meaningful is why we’re excited to invite back NTN Pro, Ron Robichaud. Today, he’s walking us through calculating and interpreting ratios like the champs we are, so we can take charge of our business and its financial well-being.</p><p><strong>PART 1 // Key Ratios: Learning How to Read  the Signs<br></strong><br></p><p>Founders, if you’re not looking at your ratios, you’re potentially missing out on important warning signs—red flags letting you know what areas of your business require your attention. So where to start? In Part 1, Ron walks us through the four critical categories of ratios: Leverage. Liquidity. Efficiency. Profitability. The <a href="mailto:ronrobichaud2@gmail.com">Ron Robichaud</a> Ratio. If you fix this ratio, the other ratios take care of themselves. What’s a good number to have for a given ratio? Clueless? Well, Ron helps us crunch the numbers and gives us some possible fixes for when ratios look unfavorable. </p><p><br></p><p><strong>PART 2 // Converting $ to %: A Simple Way to Find the Issues <br></strong><br></p><p>Turn dollar signs into percentages and watch the numbers light up. This one small adjustment can give you a simple yet powerful new perspective on your income statement. </p><p>Watch these numbers follow a trend over time, or highlight abrupt and potentially costly inconsistencies. Either way, when you’re done with Part 2, you’ll have some p