Ratio Analysis

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Product Details
Course Type: PDF download & Online
Files Included: 1 PDF
Review Questions: Available online only
No. of pages: 45

About the Course

This course begins with a review of financial terminology and definitions that will be used or are related to ratio analysis. An introduction to ratio analysis follows covering the various forms that the analysis may take, including inter & intra firm assessment and period and industry comparative analysis. Limitations to results and qualification are also discussed. The various categories into which the ratios are divided and the purpose of each category are then presented. The course concludes with two case studies showing illustrative examples of the analysis.

Learning Objectives

After taking this course you will be able to:

  • Define short & long term insolvency
  • Explain the difference between insolvency & bankruptcy
  • Define fixed cost & variable costs
  • Explain what a cost function is
  • Calculate total cost
  • Describe what relevant range of production means
  • Define dividends
  • Discuss net working capital
  • Describe what the term “marketable” means
  • Discuss why leverage is important
  • List and describe the various stakeholders associated with a business
  • Explain managerial efficiency & identify the ratios linked to it
  • Explain fundamental analysis & identify the ratios linked to it
  • Define a financial ratio
  • Outline the differences between intra-firm ratio or trend analysis & inter-firm ratio industry average analysis
  • List the common categories of ratios
  • State the limitations of ratio analysis
  • Discuss the role the cash position plays in the financial health of a company
  • Explains the impact of debt or leverage on a firm
  • Describe what is meant by productivity
  • Explain the concept of profitability
  • Calculate liquidity ratios like current & quick ratios
  • Calculate leverage ratios like debt to equity, debt to assets, times interest earned & fixed charge coverage ratios
  • Calculate profitability ratios like gross profit, operating profit and net profit margins, return on assets, return on equities and basic earning power ratio
  • Calculate productivity ratios like inventory, fixed asset and total asset turnovers, average collection period & accounts receivable turnover
Course Details
PrerequisitesThe candidate should be comfortable with basic mathematics.
Target AudienceThis course is for beginners in the finance field and is also aimed at banking and corporate teams.
Advance Preparation None
Minimum Browser Requirements This site is best viewed in Google Chrome, Firefox or Safari. Please note we do not support Internet Explorer.
Course Guide

This course consists of five lessons:

  • Lesson 1 – Understanding the language
  • Lesson 2 – Introduction to Ratios
  • Lesson 3 – Liquidity, Leverage, Productivity & Profitability
  • Lesson 4 – Case Study 1 – Office Depot
  • Lesson 5 – Case Study 2 – Staples & Office Depot: Comparative Ratio Analysis
Course AvailabilityOn purchase
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