Customer story
Gross margin
Not available
(revenue − cost of sales) ÷ revenue × 100
Needs: revenue, cost of sales.
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Business health checker
Seven ratios from your income statement and balance sheet, each with its formula and what it means for your business. Import the figures from the free statement generators or type them in. Free, no sign-up, nothing uploaded.
Your figures
Type the figures from your accounts, or build them with the free income statement and balance sheet generators first.
Your ratios
No industry benchmarks: we could not find official figures to cite, so compare each ratio with your own earlier periods.
Net margin
Not available
profit for the period ÷ revenue × 100
Needs: revenue, profit for the period.
Current ratio
Not available
current assets ÷ current liabilities
Needs: current assets, current liabilities.
Quick ratio
Not available
(current assets − inventory) ÷ current liabilities
Needs: current assets, inventory, current liabilities.
Debt to equity
Not available
total liabilities ÷ total equity
Needs: total liabilities, total equity.
Receivable days
Not available
trade receivables ÷ revenue × days in the period
Needs: trade receivables, revenue.
Payable days
Not available
trade payables ÷ cost of sales × days in the period
Needs: trade payables, cost of sales.
Saved in this browser only. Nothing is sent to ereQa. Not financial advice.
A handful of ratios tell you more about a small business than a page of figures: how much of each sale you keep, whether you can pay what falls due this year, how much of the business is funded by debt, and how fast cash comes in and goes out. This checker works out seven of them from your income statement and balance sheet, explains each in plain English and shows the formula, so you can check the arithmetic yourself.
How to use the business health checker
- If you built an income statement and a balance sheet with the free generators in this browser, press “Import my statements”. Otherwise type the figures in from your own accounts.
- Use figures for the same period and the same balance sheet date. Mixing a quarter’s revenue with a year-end balance sheet distorts the day counts; set “Days in the period” to match (90 for a quarter).
- Read each ratio with its explanation. A ratio that cannot be worked out says why, rather than showing a misleading number.
- Download the result as a PDF or Excel file and repeat next period to see the trend.
Reading the results without benchmarks
This page does not compare you with an “industry average”. We could not find official, citable figures for Nigerian small businesses by sector, and an invented benchmark is worse than none. The most useful comparison is with your own business: the same ratio last quarter or last year, worked out the same way.
- A falling gross margin usually means costs have risen faster than prices.
- A current ratio below 1 deserves attention: it means more is due within a year than you hold in short-term assets.
- Receivable days rising over time means customers are paying more slowly. Sending invoices promptly and following up when they are due shortens it.
The facts: where the figures come from
- The inputs come from the two main financial statements. Under IAS 1, a complete set of financial statements, presented at least annually, includes a statement of financial position (balance sheet) and a statement of profit or loss.
- Under IAS 2, inventories are measured at the lower of cost and net realisable value, so the inventory figure used in the quick ratio should already reflect any write-down.
- Turnover and fixed assets from the same statements decide whether a company is a small company under section 201 of the Nigeria Tax Act, 2025 (gazetted text) (gross turnover of ₦100,000,000 or less and total fixed assets not exceeding ₦250,000,000), which section 56 taxes at 0%.
Sources, checked 2 November 2026: IFRS Foundation, IAS 1; IFRS Foundation, IAS 2; Nigeria Tax Act, 2025, Official Gazette No. 117, Vol. 112 (sections 56 and 201).
Build the statements first with the free income statement generator and balance sheet generator.
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Frequently asked questions
There is no single right number for every business, and we do not quote an industry benchmark because we could not find an official one for Nigerian sectors. Below 1 means short-term debts exceed short-term assets, which is worth acting on. Watch how your own ratio moves from period to period.
Watch the numbers that move
every week, not once a year.
ereQa shows your monthly profit and loss and which invoices are overdue, grouped by how late they are, on every plan including Free. A weekly email on Sundays sums up invoices, revenue, expenses and what is outstanding. It does not work out these ratios for you or draw up a balance sheet.
