Balance Sheet Ratio Checker
Compare four balance sheet ratios and check whether assets, liabilities, and book equity reconcile. The point score is illustrative, not a company rating.
How the calculation works
Enter current assets, current liabilities, total assets, total liabilities, and book equity from one balance sheet snapshot. Use the same currency, reporting date, and consolidation scope for all five amounts. The calculator reports four ratios based on these values and does not retrieve company statements or market prices.
Current ratio divides current assets by current liabilities. Liabilities to equity divides total liabilities by book equity. Equity to assets divides book equity by total assets, and liabilities to assets divides total liabilities by total assets. The ratios remain visible when the inputs do not reconcile, alongside checks for current subtotals and the accounting equation.
Each available ratio receives between 0 and 25 points under the fixed ranges below, for a total from 0 to 100 when all four ratios are defined. These ranges summarize a simple heuristic. They have not been validated as a financial health test and do not adjust for industry, accounting policy, asset quality, cash flow, or timing.
A negative book equity value is allowed and shown as entered. It is a book value relationship, not a legal insolvency finding. A current ratio below 1 means current assets are below current liabilities in this snapshot, not that missed payments will occur.
Step by step
- Enter all five balance sheet amounts in the same currency and reporting scope.
- Review the four ratios, their point ranges, and the consistency checks.
- Confirm the source figures and compare snapshots only when dates and accounting definitions match.
Worked example
Enter current assets 200, current liabilities 100, total assets 500, total liabilities 300, and book equity 200, all in the same currency. These figures produce a current ratio of 2.00, liabilities to equity of 1.50, equity to assets of 40%, and liabilities to assets of 60%.
The accounting equation residual is 0. The four ratio rules produce an illustrative score of 50 out of 100. This score describes only these fixed rules applied to the entered snapshot; it is not a company rating.
When to use this calculator
Use this calculator to review four book ratios from one balance sheet snapshot and to see whether reported totals reconcile. It can help organize statement figures before you compare them with other accounting information.
For a useful comparison, keep the reporting date, currency, consolidation scope, and accounting definitions consistent. A ratio or point total alone does not describe a company’s full financial position.
Common interpretation errors
Mixing reporting dates, currencies, consolidated and standalone figures, or accounting definitions can make the ratios misleading. Check that all five amounts describe the same statement basis.
Do not treat the illustrative score or a review notice as a forecast, credit decision, or legal conclusion. Check the original statement when subtotals or the accounting equation do not match.
Formulas and point ranges
current_ratio = current_assets / current_liabilities
total_liabilities_to_equity = total_liabilities / book_equity
equity_to_assets = book_equity / total_assets
total_liabilities_to_assets = total_liabilities / total_assets
current_ratio points: > 2.0 = 25, > 1.5 = 20, > 1.0 = 10, otherwise 0
liabilities_to_equity points: < 0.5 = 25, < 1.0 = 20, < 2.0 = 10, otherwise 0
equity_to_assets points: > 0.5 = 25, > 0.4 = 20, > 0.3 = 10, otherwise 0
liabilities_to_assets points: < 0.4 = 25, < 0.6 = 20, < 0.8 = 10, otherwise 0
illustrative_score = sum of all four point values, only when all four ratios are defined
Each ratio can contribute up to 25 points under these fixed rules, and the score is shown only when all four ratios are defined. If book equity is negative, a defined liabilities to equity ratio and a defined equity to assets ratio each receive zero points. If book equity is zero, liabilities to equity is undefined and the combined score is unavailable. The score is an illustrative rule based output, not a validated company assessment.
Assumptions and limits
This calculator applies four fixed book ratio rules to amounts you enter. It does not verify filings, accounting standards, statement dates, currency, or consolidation scope. Ratios can be undefined when a denominator is zero, and the total score is unavailable if any ratio is undefined. A negative book equity value is not a legal insolvency determination.
Key terms
- Current ratio
- Current assets divided by current liabilities. It is undefined when current liabilities equal zero.
- Liabilities to equity
- Total liabilities divided by book equity. Total liabilities can include obligations beyond interest bearing debt. The ratio is undefined when book equity equals zero; a negative denominator produces a signed ratio.
- Equity to assets
- Book equity divided by total assets. The value may be negative when book equity is negative, and it is undefined when total assets equal zero.
Related calculations
Compare four book value ratios from one balance sheet snapshot. Income Statement Analyzer summarizes entered profitability figures, while Cash Conversion Cycle Calculator uses operating cycle day inputs to show a different working capital view.
Enter values from the same reporting date, currency, and consolidation scope. The ratios use total liabilities, which can include more than interest bearing debt.
FAQ
What does the illustrative score show?
It adds four rule based points, each worth up to 25, using the current ratio, total liabilities to book equity, book equity to assets, and total liabilities to assets. The displayed 0 to 100 result is an illustrative summary of those fixed cutoffs. It is not a validated measure of financial health, a credit rating, a default probability, or a legal insolvency test.
How are the ratio points assigned?
The rules are fixed in the formula section. For example, a current ratio above 2 earns 25 points, above 1.5 through 2 earns 20, above 1 through 1.5 earns 10, and 1 or below earns 0. The other three ratios have their own stated ranges. The cutoffs are calculator rules, not thresholds validated for every industry.
How should I read the review notices?
A current ratio below 1 means the entered current assets are lower than current liabilities. Negative book equity is the entered equity amount below zero. It implies liabilities exceed assets only when the accounting equation reconciles. These snapshot checks do not predict payment ability or establish legal insolvency.
What do the input consistency checks mean?
The accounting checks compare current assets with total assets, current liabilities with total liabilities, and total assets with total liabilities plus book equity. A failed check does not change any input or hide otherwise calculable ratios. The equation residual is assets less liabilities and equity; a small difference may reflect rounding in reported amounts.
Why might a ratio or score be unavailable?
Use amounts from the same reporting date, currency, and consolidation scope. Current ratio is undefined when current liabilities are zero. Liabilities to equity is undefined when book equity is zero. The asset based ratios are undefined when total assets are zero. The combined score is unavailable if any required ratio cannot be calculated.
Related tools
Income Statement Analyzer summarizes profitability figures from an income statement. Cash Conversion Cycle Calculator focuses on receivable, inventory, and payable days.