Calculation of financial ratios is one of the tools used in analyzing the businesses loan applicants. Using additional financial indicators and ratios becomes especially relevant when the share of problem loans at a financial institution increases and losses become noticeable.

This paper is focused on financial ratios used in case of bad debts and/or significant negative trends detected at a business. These ratios are helpful for risk assessment and timely decision-making.

We also present a case study with examples for the calculation and analysis of financial ratios.