Lesson 112 min

Building Your Ratio Dashboard

Create a systematic framework for organizing and tracking essential financial ratios.

Learning Objectives

  • Identify essential ratios for any stock analysis
  • Organize ratios by purpose and priority
  • Create effective comparison templates
  • Build quick-check ratio screens

Building Your Ratio Dashboard#

Professional analysts don't randomly check ratios—they use systematic frameworks to ensure consistent, thorough analysis. A well-designed ratio dashboard helps you quickly assess any company and spot issues before diving deeper.

The Goal: Create a repeatable process that covers all major aspects of a company's financial health in 15-30 minutes, allowing you to quickly filter opportunities and identify areas needing deeper research.

The Essential Ratio Framework#

Tier 1: Must-Check Ratios#

These ratios provide the foundation for any analysis:

CategoryRatioWhat It Tells You
ValuationP/E RatioPrice relative to earnings
ValuationEV/EBITDADebt-neutral valuation
ProfitabilityROEReturn on shareholder capital
ProfitabilityNet MarginProfit efficiency
StrengthDebt/EquityLeverage level
StrengthInterest CoverageDebt payment ability
EfficiencyAsset TurnoverAsset utilization
GrowthRevenue GrowthTop-line expansion

Tier 2: Important Context#

Add these for deeper understanding:

CategoryRatioWhen It's Critical
ValuationP/B RatioBanks, asset-heavy companies
ValuationP/FCFCash flow quality check
ProfitabilityROICCapital allocation
ProfitabilityGross MarginPricing power
StrengthCurrent RatioShort-term liquidity
StrengthDebt/EBITDADebt capacity
EfficiencyCash Conversion CycleWorking capital
GrowthEPS GrowthEarnings trajectory

Tier 3: Industry-Specific#

Choose based on company type:

IndustryKey Additional Ratios
BanksP/Tangible Book, Net Interest Margin, Loan Loss Reserves
REITsFunds From Operations (FFO), Cap Rate
RetailSame-Store Sales, Inventory Turnover
SaaSRevenue Retention, Customer Acquisition Cost
InsuranceCombined Ratio, Loss Ratio

Organizing Your Dashboard#

Category-Based Layout#

Recommended Dashboard Structure

Organize ratios in the order of your analysis flow: Valuation → Profitability → Financial Strength → Efficiency → Growth → Quality

Section 1: Valuation Quick Look

MetricCompanyIndustryS&P 500
P/E (TTM)
P/E (Forward)
EV/EBITDA
P/B

Section 2: Profitability Check

MetricCompany5-Yr AvgIndustry
ROE
ROA
Net Margin
Operating Margin

Section 3: Financial Health

MetricCompanySafety Level
Debt/Equity
Interest Coverage
Current Ratio
Debt/EBITDA

Section 4: Efficiency & Growth

MetricCompanyTrendIndustry
Asset Turnover
Revenue Growth (3yr)
EPS Growth (3yr)
FCF Growth (3yr)

Quick-Check Screens#

The 5-Minute Health Check#

Use this to quickly filter stocks:

ScreenPass If
Profitable?Net Income > 0 (or improving)
Reasonable Valuation?P/E < 25 or justified by growth
Not Over-Leveraged?D/E < 1.5 (industry-adjusted)
Can Pay Debt?Interest Coverage > 3x
Growing?Revenue growth positive

Red Flag Screen#

Immediately investigate if any are true:

Red FlagThreshold
Interest Coverage< 2.0x
Current Ratio< 1.0 (non-retail)
Debt/EBITDA> 4.0x
Negative FCF3+ consecutive years
Declining Revenue3+ consecutive years
Payout Ratio> 100%

Value Screen Example#

CriterionTarget
P/E Ratio< 15
P/B Ratio< 2.0
Dividend Yield> 2%
ROE> 12%
D/E< 0.8

Growth Screen Example#

CriterionTarget
Revenue Growth> 15%
EPS Growth> 15%
ROE> 15%
Gross Margin> 40%
Debt/EBITDA< 2.5x

Comparison Templates#

Peer Comparison Table#

MetricCompanyPeer 1Peer 2Industry Median
P/E
EV/EBITDA
ROE
Net Margin
D/E
Revenue Growth

Historical Trend Table#

MetricCurrent1Y Ago3Y Ago5Y Ago
P/E
ROE
Net Margin
D/E
Revenue

Building Your Process#

Step 1: Initial Filter (2 minutes)#

  1. Run quick-check screen
  2. Check for red flags
  3. Decide: Deep dive or pass?

Step 2: Dashboard Review (10 minutes)#

  1. Fill in Tier 1 ratios
  2. Compare to industry medians
  3. Note any outliers (good or bad)

Step 3: Deep Analysis (15+ minutes)#

  1. Add Tier 2 ratios as needed
  2. Run peer comparison
  3. Check historical trends
  4. Investigate outliers

Consistency Is Key

Use the same dashboard for every stock you analyze. Over time, you'll develop intuition for what "normal" looks like and spot outliers instantly.

Data Sources#

Free Sources#

  • Company investor relations (10-K, 10-Q filings)
  • Yahoo Finance (basic ratios)
  • Finviz (screening and quick ratios)
  • SEC EDGAR (official filings)
  • Bloomberg Terminal (professional)
  • Capital IQ / FactSet (institutional)
  • Morningstar (retail-focused)
  • Koyfin (modern interface)

Key Takeaways

  • Tier 1 ratios (P/E, EV/EBITDA, ROE, D/E, etc.) are essential for every analysis
  • Organize dashboard by category: Valuation → Profitability → Strength → Efficiency → Growth
  • Quick-check screens filter opportunities in 5 minutes
  • Red flag screens identify immediate risks (Interest Coverage <2x, D/E >1.5, etc.)
  • Comparison templates help benchmark against peers and history
  • Use consistent process for every stock to build pattern recognition
  • Start with free sources (Yahoo Finance, SEC filings) before paying for data