Using Ratio Analysis

The Ratio Analysis report is automatically created based on the financial groupings assigned to accounts in the Financial trial balance.

Note: Ratio Analysis is currently available for annual engagements only.

To view the Ratio analysis report, do the following:

  1. Click on the engagement on the Engagement List page.

Note: See Using the Engagement List Page for information about using the pagination and search features to find an engagement in the list.

  1. Click on the navigation bar and select Ratio Analysis.

Note: You can also access the Ratio analysis report from the Engagement View. Click next to the node or folder holding the ratio analysis report to expand it and show its contents, then click the report's index or name to open it.

Ratio analysis will only become available after importing a trial balance into the engagement.

Ratio Analysis grid

The ratio analysis grid will show all enabled ratios split by ratio type – Liquidity, Leverage, Activity, Profitability, or Custom.

Note: Click beside any ratio name to see the ratio formula (how the ratio is calculated) and the ratio description (how the ratio can be used).

Calculated ratios are shown for the current and prior year. For a new engagement, a standard set of ratios are created. These reference the system-provided financial groups. If you are using custom groups, it may not be possible to calculate all ratios.

If a ratio shows Not calculated, either:

  • One of the financial groups that the ratio is based on cannot be found in the engagement.

  • One of the financial groups that the ratio is based on does not have any accounts assigned to it.

  • There is a formula error, such as dividing by zero, which means that the result cannot be shown.

To resolve this, see Editing ratios.

A ratio value will show when the ratio value has changed upon recalculation. This is to indicate that your expectation or comment may no longer be appropriate after the recalculation.

Reasons for values changing on recalculation include:

  • The trial balance has been re-uploaded with changes in account balances.

  • An account balance used in the calculation of the ratio has been modified or reassigned to a different financial group.

  • One of the financial groups that the ratio is based on has been modified.

  • The ratio structure has been modified in Edit/Delete Ratios.

Click to see the previous value before recalculation. When you click Dismiss, the icon will be permanently removed from the ratio value.

The Expectation/Comment column allows a description of the expected ratio changes and any commentary on the observed ratios to be documented.

Calculating and recalculating ratios

The first time you visit Ratio Analysis, ratios will be calculated automatically. Following this, ratios will only be recalculated when the Recalculate ratios button on the right side of the screen is clicked or if the user answers Yes to a message prompting recalculation after a ratio definition change.

The last recalculated date and time is shown at the top of the Ratio Analysis grid.

Note: If you have entered text in the Expectation/Comment column, you should review for any ratio changes to ensure your annotation still aligns with the recalculated ratio values.