Better Planning through Ratio Analysis

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  • Understand the benefits of Ratios in financial planning
  • Differentiate from competitors by offering more
  • Learn recommended benchmarks for different age groups

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Ratio Analysis has been missing from planning software since the beginning

"More Than Just Data: Uncover the Game-Changing Benefits of Ratio Analysis"

Give clients more than your competitors can offer

Ratio analysis is a cornerstone, deeply embedded in the academic framework of financial planning programs at universities worldwide. It's the bedrock of a thorough, ongoing analysis of any financial plan. This methodology is not just theoretical; it's practical and crucial for advisors actively guiding clients through critical financial decisions. By adopting ratio analysis, advisors go beyond the basics - they "Do More Planning," which is not just our motto but a commitment to excellence and depth in financial advisory. 

Differentiation is key

This approach does more than just offer valuable advice to clients; it sets advisors apart, distinguishing them from peers who might overlook this fundamental tool. Embracing ratio analysis is about providing comprehensive, insightful guidance that truly aligns with clients' needs and aspirations.

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Here is a glimpse of what  You'll Learn In 
​"Better Planning Through Ratio Analysis

Why Use Ratio Analysis

How will this help your clients?

  • Early Warning Segmentation: Ratio analysis breaks down a financial plan into segments, evaluating specific areas like liquidity, profitability, and solvency. This segmentation highlights strengths and weaknesses, acting as an early warning system to address potential issues proactively.
  • Comprehensive Metrics: Unlike tools focused on a single aspect of planning, such as Monte Carlo simulations, ratio analysis provides a broad perspective. It covers various metrics, ensuring a holistic view of a financial plan's success or challenges, including areas beyond the scope of simulations.
  • ​Time Tested and Academically Validated: As a well-established method, ratio analysis has been honed over the years and academically validated. Its robustness and reliability make it a trusted tool in the financial sector, providing advisors and clients with confidence in its results.
  • Demonstrating Expertise: For financial advisors, employing ratio analysis is a testament to their proficiency. It allows them to offer valuable insights and solutions early in client interactions, demonstrating their expertise and thereby fostering trust and confidence in their advisory services.
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Understand The Basics

The 4 Types of Ratios

  • Income Usage Ratios: Unravel how your clients' income is allocated these ratis illuminate spending patterns, savings habits, and the efficiency of income distribution, offering a clear picture of financial health and lifestyle sustainability.
  • Liquidity Ratios: Assess your clients' ability to meet short-term obligations. Liquidity ratios provide insights into the readiness to handle unexpected expenses or financial downturns, ensuring that cash flow is managed effectively for immediate needs.
  • Debt Ratios: Navigate through the complexities of liabilities. These ratios help evaluate the proportion of income going towards debt repayments, indicating financial leverage and risk levels, and guiding debt management strategies.
  • ​Investment Ratios: Evaluate the performance and alignment of investment portfolios. These ratios analyze the balance, risk, and return of investments, ensuring they contribute meaningfully towards long-term financial goals.

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What makes a ratio good or bad?


Our benchmark section stands as a pivotal resource in financial planning, offering tailored guidelines that help contextualize and evaluate the significance of various financial ratios. These benchmarks are meticulously curated to account for differing client ages and unique financial situations, providing a nuanced understanding of what constitutes a healthy or concerning ratio. By comparing individual client metrics against these established benchmarks, advisors and clients can gain critical insights into their financial health, identifying areas of strength and those in need of attention. This comparative analysis empowers informed decision-making and strategic planning, ensuring that financial goals are not just set, but are realistically achievable and aligned with each client’s personal financial landscape. With these benchmarks, advisors can offer more personalized, accurate, and effective financial advice, truly embodying our ethos of "Do More Planning."

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Case Study

Ratio Analysis in Action

Meet the Thompsons: Peter (32), Linda (30), and their children Melissa (10) and Billy (7). This year, Linda's significant raise has increased their household income to $110,000. While they manage their finances with some prudence, covering living expenses, funding annual vacations, and contributing to their children's college fund, they recognize the need for professional financial guidance. As they contemplate using their increased income for a larger home, the Thompsons represent a family on a solid financial path yet lacking in strategic planning. They are at a juncture where professional assessment and advice could greatly enhance their financial decisions, helping them align more closely with their goals and make the most of Linda's recent raise.

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