Tab #8: Key Financial Ratios (KFR)

The key financial ratios (KFR) tab calculates 75+ different ratios, up to a 10-year period and inclusive of the TTM and NTM estimates, if completed. This sheet shows you the formulas for all of these key ratio calculations, as well as a long-form and short-form description of each key ratio name. A threshold input-based pass/fail mechanism is also included in this sheet, which can help identify good/bad ratios and trends. This sheet also lets you compare trends, growth, and see CAGR's for any 3 selected key financials. More specifics on this sheet are included below:

  1. Descriptions and Formulas
    • For every key ratio calculation, there is a complete name description, a shortened name description, and a complete formula to show how the ratio was calculated. The key ratios in this tab are categorized into the following sections: Capital structure and debt ratios, interest rate coverage, short-term liquidity, dividends, returns, margins, turnover ratios, efficiency ratios, price ratios, enterprise value ratios, and free cash flow ratios.
  2. Key Financial Ratiosand Thresholds
    • All of the ratios calculated on this tab come from financial data on the KFS tab.The key financial ratio value colors will always either be black, red, or green. The color will be black if there's no financial ratios in the prior period to compare to, or if the ratio is the exact same as the prior period. The color will be red or green depending on where the current period's ratio stands relative to the last period's ratio. This is where you can reference the green/red up and down symbols (in column X and AA). For example, a lower debt-to-assets ratio is better, whereas a higher interest coverage ratio is better, and the ratio's colors will reflect this difference accordingly (with green = better, red = worse).
      • The threshold pass/fail input cells can also be used as a screener. For example, let's say you don't want to invest in companies with a price-to-earnings ratio above 30x and only below 15x. In this case, you'd enter 30x as a fail threshold and 10x as a pass threshold. Any values below 10x over the available period will highlight green, any values greater than 30x will highlight red, and any values in-between will highlight yellow.
  3. Key Financial Ratios Trend Analysis
    • Investors can reference the min, mean, median, and max columns to evaluate the normal distribution of the company's key financial ratios, up to 10 years. Investors can also select any time period within the last 10 years and compare the min, mean, median, and max between these two dates, to get a better picture of historical or recent trends.
  4. Three Selected Key Financial Ratio Trends
    • On the right side of the sheet, you'll see three dropdown list cells where you can select any 3 key financial ratios. The output of this selection will let you see the selected ratios' growth trends over a period of time, up to 10 years, its CAGR, and its min, mean, median, and max over a selected date range. You can also see the CAGR's over multiple periods of time for these 3 selected key ratios, to give you a better picture of growth. You'll also see one chart that shows the growth percentage of these 3 selected key ratios over a period of time, up to 10 years and inclusive of TTM and NTM estimates (if completed). The other chart on the tab shows the CAGR trends for these 3 selected key ratios, based on the year inputs.
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