Financial Ratio Analysis

---
name: financial-ratio-analysis
description: "Compute and interpret 14 liquidity, solvency, profitability, and efficiency ratios for Indonesian SMEs using the deterministic financial-ratios engine."
argument-hint: <balance_sheet> <income_statement>
risk_level: MEDIUM
rule_type: professional-standard
quality_tier: tested
allowed-tools: bash
capability:
  purpose: [financial_analysis, unit_economics_modelling]
  not_for: [certified_audit_opinion, public_offering_prospectus]
  requires: [<balance_sheet> <income_statement>]
  produces: [bep_units, bep_revenue, contribution_margin, margin_of_safety]
  consumes: [context.scale, marketing.cac]
  deterministic: true
  cross_domain_relevance:
    strategy: high
    marketing: medium
    tax: medium
---

# Financial Ratio Analysis

Computes 14 standard ratios via the deterministic engine and interprets them with industry-aware benchmarks — not blind rules.

## Ratio Groups
1. **Liquidity**: `currentRatio`, `quickRatio`, `cashRatio` — ability to pay short-term obligations.
2. **Solvency**: `debtToEquity`.
3. **Profitability**: `grossMargin`, `netMargin`, `roa`, `roe`.
4. **Efficiency**: `inventoryTurnover`, `receivablesTurnover`, `daysSalesOutstanding` (DSO), `daysPayablesOutstanding` (DPO), `daysInventoryOutstanding` (DIO), `cashConversionCycle` (CCC).

## Conservative SME Benchmarks (industry-dependent, not statutory)
* Current ratio ≥ 1.5; quick ratio ≥ 1.0; cash ratio ≥ 0.2.
* Debt/Equity < 2.0 for non-capital-intensive SMEs.
* Gross margin varies greatly by industry — compare against your own trend and competitors, not a single absolute figure.
* A positive CCC means working capital is tied up — compare with the industry payment cycle.

## Hybrid Execution Model
Pass the balance sheet & income statement to `engines/financial-ratios.js` (14 functions). Wrap the output in a Trust Envelope containing the standard basis (PSAK 1), `risk_level: MEDIUM`, `requires_human_review: true` for credit support, `as_of` report date.

## Scope & Safety
* **Use for**: financial health checks, SME credit worthiness, cross-phase performance monitoring.
* **Do not use for**: a substitute for audited financial statements, stock valuation, large investment decisions without qualitative analysis.
* Ratios are historical (not predictive) — always combine with forward-looking assumptions.
* A zero divisor will throw an engine error — make sure data is complete before execution.

## Worked Example
Input: CA 500 million, CL 250 million, inventory 150 million, cash 80 million, TL 600 million, TE 400 million; revenue 1.2 billion, COGS 800 million, NI 120 million; TA 1 billion; avg inventory 200 million, avg receivables 150 million, avg payables 100 million.
Output: currentRatio 2.0, quickRatio 1.4, cashRatio 0.32, D/E 1.5, grossMargin 0.3333, netMargin 0.1, ROA 0.12, ROE 0.3, turnover 4.0×/8.0×, DSO 45.6 days, DPO 45.6 days, DIO 91.3 days, CCC 91.3 days.
Interpretation: liquidity is safe, solvency moderate, turnover healthy; ~3 months of working capital is currently tied up — consistent with the working-capital skill.