Introduction
Gain financial insights
()
1. What Is Financial Ratio Analysis?
Introduction to financial ratio analysis
()
2. A Review of the Financial Statements
What are the financial statements?
()
The balance sheet
()
The income statement
()
The statement of cash flows
()
3. The DuPont Framework
The DuPont company: creating accounting history
()
Return on equity
()
DuPont framework
()
DuPont framework: Target and Walmart
()
Problem description to explanation
()
4. Common-Size Financial Statements
Olympic medals and GDP per capita
()
Common size overview
()
Target's common-size income statement
()
Target's common-size balance sheet
()
5. Profitability Ratios
Price-earnings ratio
()
McDonald's most profitable items
()
Comparing profitability with financial ratios
()
Specific profitability ratios
()
6. Efficiency Ratios
Mark-up vs. profitability: Harry Winston vs. Walmart
()
Number of days' sales in inventory
()
Average collection period
()
Length of the operating cycle
()
Fixed asset turnover and other utilization ratios
()
7. Leverage Ratios
Singapore Airlines' low leverage
()
Current ratio
()
Leverage ratios
()
8. Potential Pitfalls to Ratio Analysis
Historical data pitfalls and baseball
()
Excess data and comparability issues
()
"Smoking gun" and historical data biases
()
Conclusion
What financial ratio analysis can NOT do
()
Glossary_Understanding_Financial_Ratios.zip
(100 KB)