Background Coronaviruses are a broad family of pathogens that can cause mild to severe respiratory illnesses. Due to a strong inflammatory response and a weak immunological response, viral pneumonia inflammation, like Coronavirus Disease 2019 (COVID-19), displays an unbalanced immune response. Therefore, circulating biomarkers of inflammation and the immune system can serve as reliable predictors of a patient’s prognosis for COVID-19. Hematological ratios are reliable markers of inflammation that are frequently utilized in pneumonia, primarily in viral infections with low cost in developing countries. Purpose To examine the neutrophil-to-lymphocyte ratio (NLR), lymphocyte-to-monocyte ratio (LMR), and platelet-to-lymphocyte ratio (PLR) in predicting the severity of COVID-19 patients. Methods An institutional-based retrospective study was done on 105 hospitalized COVID-19 patients at the University of Gondar comprehensive specialized referral hospital, Northwest Ethiopia. The laboratory evaluations that were gathered, evaluated, and reported on included the total leucocyte count (TLC), absolute neutrophil count (ANC), absolute lymphocyte count (ALC), absolute monocyte count (AMC), NLR, LMR, and PLR. The Kruskal–Wallis test and Wilcoxon matched-pairs signed test were used to see whether there were any differences between the continuous variables. Receiver operating curve (ROC) analysis was used to determine the appropriate cut-off values for NLR, PLR, and LMR. P -value <0.05 was considered a statistically significant association. Results ANC, NLR, and PLR were highest in the critical group (p = 0.001), while this group had the least ALC and LMR (p = 0.001). We calculated the optimal cut-off values of the hematological ratios; NLR (8.4), LMR (1.4), and PLR (18.0). NLR had the highest specificity and sensitivity, at 83.8% and 80.4%, respectively. Conclusion Our research showed that NLR and PLR were good indicators of severity in COVID-19. However, our findings indicate that MLR is not a reliable predictor.