GL Ratio Analysis Query

Field	Description
Compare
Ledgers	Select this to perform the query on all the actual ledgers and the budgets currently available in your SYSPRO company.
Periods	Select this to perform the query for a specific ledger/budget year. You indicate this ledger/budget year using the Financial year option.
Financial year	Select the specific year's actual ledger or budget you want to query. The number of years for which the actual ledgers are available depends on the number of years for which you are retaining your General Ledger history (General Ledger Setup). The number of budget ledgers available depends on the number of budgets you have defined (General Ledger Codes).
Ratio	Indicate the specific financial ratio you want to view. Refer to Formulae for additional information on these ratios.
Current ratio	This measures the company's ability to meet its short term obligations. If the current ratio is 1, then the net working capital is zero and if it is less than 1, the net working capital is negative.
Quick ratio	This is also a measure of liquidity and uses the same calculation as the Current ratio, except that it excludes inventory, which is generally the least liquid current asset.
Payables turnover days	It is meaningful only in relation to the credit terms extended to the company. This is of interest to prospective suppliers and lenders as it gives an indication of the account payment patterns of the company. The result is expressed in days.
Receivables turnover days	This is useful in evaluating credit and collection policies. It is meaningful only in relation to the company's credit terms. The result is expressed in days.
Inventory turnover days	This commonly measures the activity, or liquidity, of a company's inventory. It is usually only meaningful when compared to the past inventory turnover or to the inventory turnover of other companies in the same industry. The result is expressed in days.
Payables turnover rate	It is meaningful only in relation to the credit terms extended to the company. This is of interest to prospective suppliers and lenders as it gives an indication of the account payment patterns of the company. The result is expressed as a rate.
Receivable turnover rate	This is useful in evaluating credit and collection policies. It is meaningful only in relation to the company's credit terms. The result is expressed as a rate.
Inventory turnover rate	This commonly measures the activity, or liquidity, of a company's inventory. It is usually only meaningful when compared to the past inventory turnover or to the inventory turnover of other companies in the same industry. The inventory turnover rate and days are calculated as Inventory (Closing Inventory balance) / Cost of goods sold. The result is expressed as a rate.
Non-current asset turnover	This measures the efficiency of the use of non-current (fixed) assets in generating sales revenue.
Total asset turnover	This indicates the efficiency with which a company uses its assets to generate sales. Generally, the higher the total asset turnover, the more efficiently assets have been used. It indicates whether the company's operations have been financially efficient.
Leverage multiplier	Leverage is the extent to which shareholders' investment is covered by assets.
Gearing ratio	Gearing is the extent to which operations are financed by borrowed funds.
Net profit margin	This measures the percentage of each sales unit of currency remaining after all costs and expenses, including interest and taxes, have been deducted. The higher this is, the better. It is a commonly cited measure of the company's success with respect to earnings on sales.
Return on assets	This is also known as Return on Investments (ROI) and measures the company's overall effectiveness in generating profits with its available assets. The higher this is, the better.
Return on equity	This measures the return earned on the owners' investment in the firm.
Debt ratio	This measures the proportion of the company's total assets financed by debt.
Debt equity	This indicates the proportion of capital and non-current debt the company is using to finance its operations. A high debt/equity ratio generally means that the company was aggressive in financing its growth with debt.
Go arrow	Select this icon to view the results for the ratio you selected.

Graphs

The graph of the ratio you selected is displayed in one pane. In another pane, you can view the graphs of the individual values from which the ratio was calculated by selecting the corresponding tabs from the listview.

Listviews

For each ratio you select, two listviews are displayed.

The first listview displays the Year/Period for which the results are being displayed, the resultant ratio value and the individual values used in the ratio calculation.

The second listview displays the General Ledger codes used in the selected ratio calculation, the description for each ledger code and the values of the years/periods used in the calculation. In addition, the tabs on this listview can be selected to display the graph of each individual elements used in the calculation.

Ledger Accounts Used

The following table indicates the SYSPRO General Ledger accounts used in the various elements of the ratio calculations.

Element	Ledger Codes
Capital	The sum of the Closing Balances of all GL Accounts defined as Capital Accounts in General Ledger Codes or GL Structure Definition.
Current Assets	The sum of the Closing Balances of all GL Accounts defined as Current Asset Accounts in General Ledger Codes or GL Structure Definition.
Non-current Assets	The sum of the Closing Balances of all GL Accounts defined as Non-current Asset Accounts in General Ledger Codes or GL Structure Definition.
Current Liabilities	The sum of the Closing Balances of all GL Accounts defined as Current Liability Accounts in General Ledger Codes or GL Structure Definition.
Non-current Liabilities	The sum of the Closing Balances of all GL Accounts defined as Non-current Liability Accounts in General Ledger Codes or GL Structure Definition.
Revenue (Income)	The sum of all Movements of all GL Accounts defined as Revenue accounts in General Ledger Codes or GL Structure Definition.
Expenses	The sum of all Movements of all GL Accounts defined as Expense accounts in General Ledger Codes or GL Structure Definition.
Purchases	The sum of the Movements (transactions with IN source only) of the GRN Suspense Account as defined in General Ledger Integration and Warehouses.
Accounts Payable	The sum of the Closing Balances of all AP Control Accounts as defined in AP Branches.
Inventory	The sum of the Closing Balances of all Inventory Control Accounts as defined in Warehouses.
Net Sales	The sum of the Movements of the Sales Accounts less the sum of the Sales Returns Accounts less the sum of the Trade Discount Accounts as defined in AR Sales Ledger Interface.
Cost of Sales	The sum of the Movements of all Cost of Sales Accounts as defined in AR Sales Ledger Interface plus the value in the Cost of goods sold adjustment account (General Ledger Integration).
Accounts Receivable	The sum of the Closing Balances of all AR Control Accounts as defined in AR Branches.
No of Days	This is 365 when calculations are done for a financial year, 28 days per period when 13 accounting periods are used (Company Setup), 30 days per period for 12 accounting periods, 60 days per period for 6 accounting periods and 90 days per period for 4 accounting periods. These are used to calculate Receivables turnover, Inventory turnover and Payables turnover.

Formulae

Following are the definitions and sources of the financial ratios which can be queried using this program:

Ratio	Calculation
Liquidity Ratios	Liquidity ratios measure the availability of cash to pay debt. Generally, the higher the value, the more liquid the firm is considered to be. Current Ratio = `[Current Assets] : [Current Liabilities] expressed as a ratio of x:1` The Current ratio measures whether or not a firm has enough resources to pay its debts in the short term, typically a year. It compares a firm's current assets to its current liabilities. Quick Ratio = `([Current Assets] - [Inventory]) : [Current Liabilities] expressed as a ratio of x:1` The Quick ratio (also known as the Acid-test ratio) measures the ability to use near cash or quick assets to immediately extinguish current liabilities.
Activity Ratios	Activity Ratios measure how quickly non-cash assets are converted into cash assets. Following are the formulae for Activity Ratios expressed in days: Payables Turnover Days = `[Accounts Payable] / [Purchases] * No of Days` The Payables Turnover (also known as Days Purchases Outstanding) is a company's average payment period. Receivables Turnover Days = `[Accounts Receivable] / [Sales] * No of Days` The Receivables Turnover (also known as Days Sales Outstanding) is a company's average collection period. Inventory Turnover Days = `[Inventory] / [Cost of Sales] * No of Days` The Inventory Turnover (also known as Days Inventory Outstanding) is the average age of inventory at the time of sales. A high number may point to overstocking, obsolescence or deficiencies in the product line or marketing effort. A low number may indicate insufficient inventory levels, which may lead to a loss in business. No of Days in the above formula are one of the following: 365 when the calculation is performed for a financial year 28 days per period if your Accounting periods per year is set to 13 (Company Setup) 30 days per period if your Accounting periods per year is set to 12 (Company Setup) 60 days per period if your Accounting periods per year is set to 6 (Company Setup) 90 days per period if your Accounting periods per year is set to 4 (Company Setup) Following are the formulae for Activity Ratios expressed as a rate: Payables Turnover Rate = `[Purchases for the period] / [Accounts Payable end of period balance]` OR when calculated for the year: Payables Turnover Rate = `[Purchases for the year] / [Accounts Payable end of year balance]` Receivables Turnover Rate = [`Sales for the period] / [Accounts Receivable end of period balance]` OR when calculated for the year: Receivables Turnover Rate = `[Sales for the year]] / [Accounts Receivable end of year balance]` Inventory Turnover Rate = `[Cost of Sales for the period] / [Inventory end of period balance]` OR when calculated for the year: Inventory Turnover Rate = `[Cost of Sales for the year] / [Inventory end of year balance]`
Efficiency Ratios	Efficiency Ratios measure the use of assets to generate revenue. Non-current Asset Turnover = `[Net Sales] / [Non-current Assets] expressed as x times` Non-current Asset Turnover measures the efficiency of the use of non-current (fixed) assets in generating sales revenue. Total Asset Turnover = `[Net Sales] / [Total Assets] expressed as x times` Total Asset Turnover measures the efficiency of the use of assets in generating sales revenue.
Profitability Ratios	Profitability ratios measure the use of assets and control of expenses to generate an acceptable rate of return. Net Profit Margin = `[Profit] / [Net Sales] * 100 expressed as x %` Net Profit Margin (also known as Net Profit Ratio, Profit Margin or Net Margin) is an indicator of a company's pricing policies and its ability to control costs. Return on Assets = `[Profit] / [Total Assets] * 100 OR [Net Profit Margin] * [Total Asset Turnover] expressed as x %` The Return on Assets (ROA) shows how profitable a company's assets are in generating revenue. Return on Equity = `[Profit] / [Capital] * 100 OR [Return on Assets] * [Financial Leverage Multiplier] expressed as x %` The Return on Equity (ROE) measures the rate of return on the ownership interest.
Solvency Ratios	Solvency ratios measure the ability to repay long-term debt. Debt Ratio = `[Total Liabilities] / [Total Assets] * 100 expressed as x %` Debt Equity = `[Non-current Liabilities] / [Capital] * 100 expressed as x %`
Leverage	Leverage is the extent to which shareholders' investment is covered by assets. Financial Leverage Multiplier = `[Total Assets] / [Capital] expressed as a factor x` Gearing = `[Non-current Liabilities] : ([Non-current Liabilities] + [Capital]) expressed as x:1` Gearing is the extent to which operations are financed by borrowed funds.

Notes and warnings

Coding considerations

To enhance the accuracy of the results of these queries, you need to ensure that the Account type against each General Ledger code is correctly defined (General Ledger Codes or GL Structure Definition) and that your General Ledger Integration is accurately defined.