Make money doing the work you believe in
I built a 39-ratio cheat sheet as part of a Claude-powered research skill I have been developing.
The goal is simple: assess the condition of a business in 10 minutes, before going any deeper.
It covers five lenses:
š Profitability: Gross Margin, EBITDA Margin, PAT Margin, EBIT Margin, NOPAT Margin
š Efficiency: Inventory Days, Receivable Days, Payable Days, Cash Conversion Cycle, Asset Turnover
š Returns: ROE, ROCE, ROIC and their DuPont breakdowns
š Leverage: Debt to Equity, Interest Coverage
š Liquidity: Current Ratio
But here is the thing I keep reminding myself every time I run through these:
Ratios are only as useful as the context you bring to them.
Apply ratios after you understand the business model, the business stage, and where the company sits in its cycle.
Do it the other way around, and the numbers will send you in the wrong direction.
