{"ok":true,"canonical_url":"https://dealroom.so/glossary/financial-ratios","api_url":"https://dealroom.so/api/public/glossary/financial-ratios","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"financial-ratios","term":"Financial ratios","group":"Reading the business","definition":"Calculations using a business's financial statements to assess its performance, health, and risk. Lenders use these to understand the business's ability to repay the loan.","what_it_means":"Your lender will analyze ratios like Debt Service Coverage Ratio (DSCR), current ratio, and debt-to-equity. These tell a story about profitability, liquidity, and leverage. Understand these for the target business; strong ratios are key to loan approval and demonstrating repayment capacity.","url":"https://dealroom.so/glossary/financial-ratios","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"}],"related":[{"slug":"dscr","term":"DSCR","url":"https://dealroom.so/glossary/dscr"},{"slug":"balance-sheet","term":"Balance Sheet","url":"https://dealroom.so/glossary/balance-sheet"},{"slug":"profit-and-loss-statement","term":"Profit and Loss Statement","url":"https://dealroom.so/glossary/profit-and-loss-statement"},{"slug":"cash-flow","term":"Cash flow","url":"https://dealroom.so/glossary/cash-flow"}],"related_questions":[{"question":"What if my personal financial statement shows low liquid assets?","url":"https://dealroom.so/sba-loans/basics/what-if-my-personal-financial-statement-shows-low-liquid-assets"},{"question":"Are SBA 7(a) loans exclusively for businesses with financial difficulties?","url":"https://dealroom.so/sba-loans/basics/are-sba-7-a-loans-exclusively-for-businesses-with-financial-difficulties"},{"question":"What if my business is new and has no financial history?","url":"https://dealroom.so/sba-loans/basics/what-if-my-business-is-new-and-has-no-financial-history"},{"question":"Does misrepresenting financial information on the SBA application automatically kill approval?","url":"https://dealroom.so/sba-7a/questions/does-misrepresenting-financial-information-on-the-sba-application-automatically-kill-appro"},{"question":"How does my personal financial history affect SBA 7(a) loan approval?","url":"https://dealroom.so/sba-7a/questions/how-does-my-personal-financial-history-affect-sba-7-a-loan-approval"},{"question":"What specific financial documentation will I need to provide for my personal finances?","url":"https://dealroom.so/sba-7a/questions/what-specific-financial-documentation-will-i-need-to-provide-for-my-personal-finances"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Financial ratios","url":"https://dealroom.so/glossary/financial-ratios","source_type":"DealRoom Data"}}