What it is
The workbook computes 23 ratios and measures across liquidity, profitability, activity, leverage and coverage from one short data sheet. Each ratio shows the current and prior period, the change, a benchmark you can enter and the exact definition used, so the reader sees what was divided by what. A ratio with a zero denominator returns “n/a” instead of an error.
Turnover, days and return ratios can run on average balances or on period-end balances with one switch. A data check confirms that assets equal liabilities plus equity in both periods before any ratio is read. For ratios that a loan agreement defines for itself, such as EBITDA, debt and fixed charges, use the covenant workbook and the agreement’s definitions.
When to use it
- Analytical procedures at planning and completion, and review engagement analytics.
- Client advisory or lender packages that need the same ratios presented consistently each period.
- Reviewing management’s own ratio calculations against the underlying financial statements.
What’s inside
- Data sheet with income statement, cash flow and balance sheet inputs, plus a third balance column for averages
- Liquidity: current, quick, cash ratio, working capital
- Profitability: gross, operating, EBITDA and net margin, return on assets and equity
- Activity: DSO, DIO, DPO, cash conversion cycle and three turnover ratios
- Leverage and coverage: debt to equity, debt to EBITDA, interest coverage, simple debt service coverage, free cash flow
Standard cited
This template follows Financial statement analysis; AU-C 520. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use. See AU-C 520 explained.
Questions
Should I use average or ending balances?
For ratios that divide a flow by a balance, such as turnover and return ratios, averages match the flow to the balance carried over the period. The switch on Data lets you use either. If the earlier balance is blank, the workbook uses the balance available.
How is EBITDA defined?
Operating income plus depreciation and amortization. That is the common form. A loan agreement usually defines it differently, with specific add-backs, so covenant calculations belong in the covenant workbook where you can reproduce the contractual definition.
Do lease liabilities count as debt?
That is a policy decision you state on the Data sheet. The workbook includes only what you enter in the total interest-bearing debt line, so include finance lease obligations, and operating lease liabilities if your definition does.
Why do some ratios show n/a?
The denominator is zero or an input is missing. Enter the missing amount or, if the ratio does not apply, leave it as n/a.
Related templates
- Common-Size Financial Statements Template
- Flux Analysis Template (AU-C 520)
- Debt Covenant Compliance Workbook
- Analytical Procedures Expectation Workpaper (AU-C 520)
Last updated 11/05/2026. All free templates.