What you'll learn:
- Know how to use financial ratios to help make decisions from a corporate finance perspective
- Explain the Dupont System of Analysis
- Calculate and interpret profit margin percent
- Calculate and understand return on investment (ROI)
- Calculate and explain total asset turnover
- Calculate and interpret expense to sales ratio
- Calculate and understand return on assets and return on equity
- Calculate and explain average accounts receivable collection period
- Calculate and understand times interest earned and fixed charge coverage
- Explain return on equity trend analysis
- Use ratio analysis to compare divisions of an organization
- Project financial statements using ratio analysis
We will learn how to use ratio analysis to help with decision making from a corporate finance perspective. The financial statements, including the balance sheet and income statement, are the primary tools used for ratio analysis. The financial statements help us understand past performance and where the organization stands at this time. Ratio analysis helps us project future performance and where the organization may stand in the future.
This course will demonstrate concepts using many practice problems, including problems using Microsoft Excel. Each Microsoft Excel problem will include a downloadable worksheet with at least two tabs, one being the answer key, the other being a preformatted worksheet that can be used to work the problem in a step-by-step format along with instructional videos.
Learners will know what ratio analysis is. They will understand the DuPont System of analysis.
We will demonstrate the concept of return on investment (ROI) and apply it to many scenarios.
The course will demonstrate return on asset, total asset turnover, & profit margin calculations.
We will discuss return on equity and debt to equity ratios and how they can be used.
Learners will understand how to calculate the accounts receivable collection period.
We will also cover times interest earned and fixed charge coverage calculations.
The course will demonstrate return on equity trend analysis.
We will show how ratio analysis can be used to compare different divisions of an organization.
Learners will be able to use ratio analysis to project performance in the future, constructing a projected income statement and balance sheet.