Overview
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Explains what financial ratios such as ROA and ROI mean and how they can be used to identify financial trends or assess a company's financial status.
Syllabus
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Introduction
- Gain financial insights
- Introduction to financial ratio analysis
- What are the financial statements?
- The balance sheet
- The income statement
- The statement of cash flows
- The DuPont company: creating accounting history
- Return on equity
- DuPont framework
- DuPont framework: Target and Walmart
- Problem description to explanation
- Olympic medals and GDP per capita
- Common size overview
- Target's common-size income statement
- Target's common-size balance sheet
- McDonald's most profitable items
- Comparing profitability with financial ratios
- Specific profitability ratios
- Price-earnings ratio
- 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
- Singapore Airlines' low leverage
- Current ratio
- Leverage ratios
- Historical data pitfalls and baseball
- Excess data and comparability issues
- "Smoking gun" and historical data biases
- What financial ratio analysis can NOT do
