Skip to content
Go to reachreporting.com
  • There are no suggestions because the search field is empty.

Explaining Ratios/Metrics in the Data Picker

Learn how to utilize key financial ratios and metrics available in the Data Picker for comprehensive business analysis in Reach Reporting.

Understanding Ratios and Metrics in Reach Reporting

The Data Picker in Reach Reporting provides access to a variety of pre-calculated financial ratios and metrics that can help you analyze business performance, profitability, liquidity, and operational efficiency. These ratios and metrics can be used as live text or in custom metrics or statements in reports and dashboards to provide dynamic financial insights.

Accessing Ratios and Metrics

To access ratios and metrics in Reach Reporting:

  1. Navigate to the Data Picker when building a metric or statement

      2.  Select the "Ratios and Metrics" section

      3.  Choose from the available ratios and metrics to add to your analysis

These ratios and metrics can also be used as Live Text in your reports and dashboards, allowing them to automatically update as your financial data changes.

Available Ratios and Metrics

Gross Profit Margin

Formula: (Gross Profit / Revenue) × 100

Gross Profit Margin measures the percentage of revenue remaining after deducting the cost of goods sold. It indicates how efficiently a company produces and sells its products.

Use Cases:

  • Evaluating pricing strategy effectiveness
  • Comparing profitability across product lines
  • Benchmarking against industry standards
  • Assessing production efficiency

Net Profit Margin

Formula: (Net Income / Revenue) × 100

Net Profit Margin shows the percentage of revenue that translates into profit after all expenses, taxes, and costs have been deducted. This is a key indicator of overall profitability.

Use Cases:

  • Measuring overall business profitability
  • Comparing performance period-over-period
  • Evaluating cost control effectiveness
  • Assessing bottom-line financial health

Working Capital

Formula: Current Assets - Current Liabilities

Working Capital represents the difference between a company's current assets and current liabilities. It measures the company's ability to meet short-term obligations and fund day-to-day operations.

Use Cases:

  • Assessing short-term financial health
  • Evaluating operational efficiency
  • Planning for seasonal business cycles
  • Monitoring cash flow requirements

Current Ratio

Formula: Current Assets / Current Liabilities

The Current Ratio measures a company's ability to pay short-term obligations due within one year. A ratio above 1.0 indicates that current assets exceed current liabilities.

Use Cases:

  • Evaluating liquidity and financial stability
  • Assessing ability to meet short-term obligations
  • Comparing financial health across periods
  • Meeting lender and investor requirements

Net Assets

Formula: Total Assets - Total Liabilities

Net Assets represent the equity or net worth of the business. It shows what would remain if all assets were liquidated and all liabilities were paid.

Use Cases:

  • Measuring business equity and net worth
  • Tracking wealth accumulation over time
  • Evaluating financial position for stakeholders
  • Assessing balance sheet strength

EBIT (Earnings Before Interest and Taxes)

Formula: Net Income + Taxes + Net Interest Expense

Net Income = Net Profit or Loss from Profit & Loss Statement

Net Interest Expense = Interest Expense - Interest Income

EBIT provides insight into operational profitability before considering financing costs and tax obligations. This metric focuses on earnings from core business operations.

Use Cases:

  • Analyzing operational performance
  • Comparing profitability across companies with different capital structures
  • Evaluating business performance independent of financing decisions
  • Assessing core business profitability

Note: EBIT must be configured in company settings. Learn more about configuring EBIT in Reach Reporting.

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)

Formula: Net Income + Taxes + Net Interest Expense + Depreciation and Amortization

Net Income = Net Profit or Loss from Profit & Loss Statement

Net Interest Expense = Interest Expense - Interest Income

EBITDA measures a company's operational performance by excluding the impact of financing, tax environments, and non-cash accounting items. This provides a clearer view of cash generation from operations.

Use Cases:

  • Evaluating cash generation capabilities
  • Comparing companies with different capital structures
  • Assessing operational efficiency
  • Investment and acquisition analysis

Note: EBITDA must be configured in company settings. Learn more about configuring EBITDA in Reach Reporting.

EBIT Margin

Formula: (EBIT / Revenue) × 100

EBIT Margin shows what percentage of revenue remains as operating profit before interest and taxes. It indicates operational efficiency and profitability.

Use Cases:

  • Measuring operational profitability as a percentage of sales
  • Comparing operational efficiency across periods
  • Benchmarking against industry standards
  • Evaluating management effectiveness

Note: EBIT must be configured in company settings. Learn more about configuring EBIT in Reach Reporting.

EBITDA Margin

Formula: (EBITDA / Revenue) × 100

EBITDA Margin represents the percentage of revenue that converts to EBITDA. This metric helps assess operational efficiency while excluding non-cash expenses.

Use Cases:

  • Analyzing cash generation as a percentage of revenue
  • Comparing performance across different companies
  • Evaluating operational efficiency trends
  • Assessing business model effectiveness

Note: EBITDA must be configured in company settings. Learn more about configuring EBITDA in Reach Reporting.

If there is a ratio or metric that you need that is not included in the Data Picker, you can build your own custom ratios or metrics using our Data Sheets feature.

Using Ratios and Metrics in Reports

Once you've selected ratios and metrics from the Data Picker, you can:

  1. Add them to metrics and statements - Include ratio data alongside your financial data
  2. Use them as Live Text - Display key ratios dynamically in reports or dashboards that update automatically
  3. Create custom metrics - Build visual metrics featuring your most important ratios
  4. Compare across periods - Track ratio trends over time to identify patterns and changes

Important Considerations

Consolidations

When working with consolidated financials, note that ratio calculations will reflect the combined data from all entities. For EBIT and EBITDA specifically, these must be configured at the individual company level, and the values will then flow through to consolidated reports.

Budget Integration

These ratios and metrics can be compared with your budgeting and forecast data, including budgets/forecasts uploaded from:

  • Budgets Pro
  • Excel budgets
  • QuickBooks Online budgets
  • Xero budgets

This allows you to compare projected ratios against actual performance for comprehensive financial planning.

Benefits of Using Ratios and Metrics

Financial ratios and metrics in Reach Reporting provide valuable insights for:

  • Performance Monitoring: Track key indicators over time to identify trends and patterns
  • Comparative Analysis: Compare performance across different periods, divisions, or companies
  • Decision Making: Use data-driven insights to inform strategic business decisions
  • Stakeholder Communication: Present financial performance in easily understood metrics
  • Goal Setting: Establish targets and monitor progress toward financial objectives
  • Early Warning Indicators: Identify potential issues before they become significant problems

If you have any questions about this feature, let us know.

 

Go to the Reach Reporting app>

ARE YOU NOT CURRENTLY USING REACH REPORTING?

learn more at reachreporting.com

We are dedicated to helping you.

- Need Additional Help?

Your success is important to us.

Whether you're working as a CFO of a business or part of an accounting firm, Reach Reporting is here to improve your working knowledge of reporting and provide service tips and skills to ensure you're at the top of your game. 

We make sure that you have access to staff members that are best suited to help you. We work together to resolve issues and create memorable moments that empower you to enhance your reporting skills.

We are here to listen to you. We understand that using new technology can be frustrating, so we can answer questions or jump on a quick zoom call. Our entire staff has an in-depth knowledge of Reach Reporting and can quickly direct you to best practices to improve your reporting. 

We are here focused on providing solutions that save you time and increase your value. We continue to improve each day and look forward to visiting with you. Your communication with us is vital and appreciated. 

Please feel free to chat with us by clicking the help chat bubble in the lower right-hand corner of this page.

Reach out to your Reach Reporting Rep and schedule a zoom meeting by clicking the meeting link in their email signature.

Or schedule to join our onboarding webinars


Foundations Webinar

Reach Reporting is dedicated to helping provide a knowledge base that is easy to understand and informative. If you still have questions that have not been answered, please let us know by emailing support@reachreporting.com, chatting with our support team, or calling us at (877) 467-7637. We are here to ensure that you have a positive experience with Reach Reporting, as we want to continue to be the reporting solution you trust. 

Need more access to Reach Reporting Resources?

Reach Reporting has a wealth of knowledge and a robust online community to support you as you create reports that provide powerful insight. Please look into the following resources.

Reach Reporting Blog: We add blogs to our site every month to give you great information in a fun and friendly manner.

Case Studies: We interview one company per month to help our clients highlight how they are using Reach Reporting and how it is improving their services and firm offerings. These case studies are invaluable to our community.

Knowledge Center: From simple to complicated, we provide step-by-step guidance to utilize every aspect of Reach Reporting in our robust knowledge center.

Video Tutorials: We know watching is sometimes easier than reading, which is why all of our tutorials are video-based in the video tutorial section of Reach Reporting and Youtube.

Social Networks: Join us on FaceBook, LinkedIn, Youtube, and Twitter.

Competitor Comparisons: We have looked at all the reporting solutions on the market. We provide you with an in-depth look at Reach Reporting compared to some of the strongest competitors out there on our competitor comparison page. 

Monthly Newsletter: Go to the footer of reachreporting.com and sign up to receive the Reach Reporting newsletters delivered directly to your inbox. Our newsletters cover tips and tricks, current events in accounting, strategies to improve your advisory services, and much more.

We look forward to helping you build insightful reports,

The Reach Reporting Team.