Italian balance sheet ratios and break-even point — ROE, ROI, ROS, liquidity and solvency
Each ratio sets one line of the accounts against another: ROE is profit over equity, ROI is operating profit over total assets, ROS is operating profit over sales, and the current ratio is current assets over debts due within the year. Break-even is the turnover at which fixed costs are just covered: fixed costs divided by the contribution margin as a percentage. With €300,000 of fixed costs and a 40% margin, break-even sits at €750,000.
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Sources and assumptions
Calculation assumptions
- Inputs follow the statutory layouts in articles 2424 and 2425 of the Civil Code: sales (A1), the A minus B difference, profit for the year (line 21), current assets (C), inventories (C.I), equity (liabilities side A) and debts falling due within the next financial year.
- The tool does not grade ratios against benchmarks: no official source sets them and they vary widely by sector. Alerts only flag plain facts, such as a loss or current assets that fall short of short-term debts.
- Break-even assumes variable costs move in step with sales while fixed costs stay put; you decide which costs go in which bucket.
- When equity is zero or negative, ROE and the debt-to-equity ratio are not shown: dividing by negative equity yields a meaningless number.
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This result is provided for information purposes only and does not constitute personalised tax advice. Check your situation with the tax authorities or a professional.