Ratios

A new, enhanced version of Ratio Analysis is available in Data Analytics. This version introduces:

  • Visualizations for ratios

  • Amount type–based ratio calculations

  • Snapshots and reporting (coming soon)

SWITCHING FROM OLD RATIO ANALYSIS

Availability by Engagement Type:

  • New Pro engagements

    • Have access only to the new Ratio Analysis in Data Analytics.

    • Legacy ratio analysis is not available.

  • Existing engagements

    • If engagements that exists before the new ratio analysis was rolled out, you will have an option for you to switch over to the new ratios.

Important: Before You Switch

Note: Switching to new ratios is irreversible.

  • Existing ratio values and comments from the old Ratio Analysis will not be retained.

  • Export the old Ratio Analysis before switching if you need to keep that information.

  • Once you switch:

    • The old Ratio Analysis report will be removed from the Engagement View.

    • Only the new Ratio Analysis in Data Analytics will be available.

SUPPORTED ENGAGEMENTS

Currently, Ratios are supported only for Annual Non-Consolidated Engagements.

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Analyze Ratios

Each engagement includes 30 standard ratios by default. You can:

  • Modify standard ratios

  • Add custom ratios specific to your engagement

Amount Type Selection

Ratios can be calculated using different balance types. The Amount Type dropdown includes:

  • Unadjusted

  • Adjusted

  • Final (default)

  • OBAL1

  • OBAL2

  • OBAL3

Note: If you have not created any Other Journal Entries (OJE), then all your OBAL balances for all the accounts will be considered as zero.

If you have not created any Other Journal Entries (OJE), then all your OBAL balances for all the accounts will be considered as zero.

Filter Ratios

All ratios are grouped by type and are listed in the filter pane.

You can choose to search a ratio for quick selection by entering 3 characters in the search field.

Click on + icon next to a ratio to:

  • View its visualization

    • A maximum of 8 ratios/charts can be added.

  • Display its calculated value in the table below

    • Displayed ratio values are for all available years and for the selected amount type.

    • You can choose to add a comment to a ratio that is specific to the selected amount type.

Data refresh

To prevent automatic updates to Trial Balance or Chart of Accounts during your analysis, the data is frozen when you land on Ratios. Any changes that update balances or accounts and groups will not be synced to your Ratios unless you choose to click on Refresh button available in the top-right.

Tip: Refer to the Last refreshed date-time below the Refresh button to know when the last updates were synced.

Snapshots & Reporting tabs are disabled for the current release. They will be generally available in a future update.

Multiple financial grouping lists

When you click on Refresh or land on Ratios screen for the first time, all your ratios will be calculated using the Default Financial List of the engagement.

Example: If two grouping lists exist – FS (default) and GroupingList2, when you land on Ratios, they will be calculated only using FS. If GroupingList2 is set as default, ratios will continue to be displaying using FS list calculation until you click on Refresh, during which all ratios will be recalculated using GroupingList2 chart of accounts data.

Note: When default grouping list is changed and Ratios is refreshed, expect some ratios to display Not Calculated as the input variables that require Group or Sub-group data will be reset.

Edit Ratios

Within the Edit Ratios screen, you can view the list of all available ratios by type. You can do the following actions:

  • Click + New ratio to add a new ratio. This will open the Create new ratio panel.

  • Click and drag  to move a ratio up or down in order in the grid.

  • Click the toggle to display or hide the ratio in the grid.

  • Click  to delete the ratio from the engagement. This cannot be reversed.

  • Click to edit the definition of an individual ratio. This will open the Edit ratio panel.

Sort and show/hide changes will be applied on clicking Save Changes.

Tip: If you have modified a ratio while another user is using the ratios, they will be notified to refresh to get the latest data.

Create new ratio / Edit ratio

The Create new ratio and Edit ratio screens allow you to define the ratio, including how it is calculated and the groups that are used in the calculation. These screens can be used to create your own custom ratios or resolve issues with any ratios that cannot be calculated.

The screen has the following inputs:

  • Ratio name – this is the name of the ratio as it will appear in the Ratio Analysis grid. This is required.

  • Ratio type – this determines which category the ratio will be shown under in the Ratio Analysis grid. The options available are Liquidity, Leverage, Activity, Profitability, and Custom.

  • Ratio structure – this determines the formula structure for the ratio. This is described in more detail below under Defining a ratio.

  • Ratio formula – this text will appear when the user clicks on in the ratio grid. This does not impact how the ratio is calculated, but helps the user to understand how the ratio is built, (for example, Current Assets / Current Liabilities).

  • Ratio description – this text will appear when the user clicks on in the ratio grid. You can use this to provide more information about what the ratio represents and how it should be used and interpreted.

  • Input, Level, Group, Value, Flip value (+/-), Average – these are used to define the ratio formula. This is described in more detail below under Defining a ratio.

Defining a ratio

A ratio is defined using an overall formula, for example “(A ± B) / C”, and the source of each of the inputs to that formula – A, B, and C.

The Ratio structure dropdown lists each of the formula structures that are available.

Note: Changing the formula structure will reset each of the inputs below.

For each input the following must be defined:

  • Level – This can be Type, Classification, Group, or Sub-group. This refers to the level of the grouping hierarchy that you want to reference under Group. For Example:

    • If you wanted to use Total Assets in your ratio, Assets would be a Type. (See Classifications for more information).

    • If you wanted to use Total Current assets in your ratio, Current assets would be a Classification. (See Classifications for more information).

    • If you wanted to use Total Cash & Equivalents in your ratio, Cash & Equivalents would be a group. (See Manage Financial Groups for more information).

    • You can also reference any custom sub-groups contained in your engagement. (See Manage Financial Sub-groups for more information).

  • Group – Depending on the Level previously selected, this will either show the Types, Classifications, Groups, or Sub-groups in the current engagement.

  • Value – After selecting the Group, this will calculate the total value for the Current year.

Flip value – This reverses the sign of the value for the selected Group, effectively multiplying it by -1. This is useful in two broad ways:

  • To make a negative (credit) value positive.

    • For example, to make Current Liabilities (typically a credit value), behave as a positive number in the calculation, check the Flip value (+/-) box for Current Liabilities.

  • To make the + (plus) operator in the formula act as – (minus).

    • For example, to calculate (Current Assets - Trade Receivables) check the Flip value (+/-) box for Trade Receivables.

Note: To do both (make a negative value positive and use a minus operator in the formula), don’t check the Flip value box.

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