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How to Master Financial Statements: Financial Ratio Analysis and Interpretation

Learn how to assess the health of a business with financial ratios, exploring profitability ratios, and fixed asset turnover.

  • Duration

    2 weeks
  • Weekly study

    5 hours
  • 100% online

    How it works
  • Included in an ExpertTrack

    Course 2 of 5
  • Get full ExpertTrack access

    $39/monthFind out more

Get an insight into the true value of a business with ratio analysis

Financial statements contain important information, but what can this data show us about the health of a company? Welcome to ratio analysis.

Ratios help stakeholders to identify trends, compare results with other companies and assess performance. This course will show you how to use ratios to evaluate various aspects of a business, such as profitability, liquidity, efficiency, gearing and investment.

What are ratios? How do we calculate them? What do they mean and what are the implications for the business? You’ll have the chance to address these questions and more on this course.

Learn to assess profitability using the return on capital employed (ROCE) ratio

On this course, you’ll have the opportunity to learn to measure how efficiently a company is using its capital to generate profits using the ROCE ratio, or return on capital employed ratio.

You’ll identify the terms used for these ratios (such as earning before interest and tax, or EBIT), explore profitability ratios, and learn how to calculate the gross and net profit margin ratio.

Use efficiency ratios to better manage your assets and liabilities

What are efficiency ratios, and how can they help a company to better use its assets and manage liabilities? This course will also show you how to use efficiency ratios in tandem with other key factors – including inventory and fixed asset turnover, trade receivables and payables, overtrading, and sales per employee.

What topics will you cover?

  • Introduction to trend, common size, ratio and industry analysis
  • Use of analyses to evaluate company performance
  • Explanation of the main liquidity and efficiency ratios
  • Introduction to and calculation of the main investor ratios
  • Learn how to interpret outcomes and identify causes of changes

Prove you're job ready

Highlight the new, job-relevant skills you’ve gained and supplement existing qualifications with a hard-earned, industry-specific digital certificate – plus one for every course within your ExpertTrack.

  • Learn the latest in your chosen industry or subject.
  • Complete each course and pass assessments.
  • Receive certificates validated by the educating organisation.
  • Impress employers with learning outcomes you can add to your CV.
  • Make your career dreams a reality.

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Learning on this course

On every step of the course you can meet other learners, share your ideas and join in with active discussions in the comments.

What will you achieve?

By the end of the course, you‘ll be able to...

  • Identify the main user groups of financial information and their requirements
  • Explore the limitations of ratio analysis
  • Explain and calculate the main investor ratios
  • Apply ratios to analyse key areas of interest
  • Calculate the main liquidity and efficiency ratios

Who is the course for?

This ExpertTrack is designed for anyone looking to build their financial data analysis and interested in using data for business decision making.

It will be of particular interest to people in senior management and leadership roles who lack an accounting background, especially if you wish to learn the skills to help you make better decisions and advance your career.

Who developed the course?

Coventry University

Coventry secured 5 QS Stars for Teaching and Online Learning in the QS World University Ranking 2020 and has received No. 1 in the world for Massive Open Online Courses in MoocLab’s World University Ranking 2021.

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About this ExpertTrack

Unlock business potential with balanced scorecards, balance sheets, ratio analysis and other strategic financial analysis tools.

Start learning today - free 7-day trial

After your free trial you can:

  • Pay $39 per month to keep learning online
  • Have complete control over your subscription; you can cancel any time
  • Work at your own pace and set your own deadlines at every stage
  • Only pay while you’re learning; the subscription will cancel automatically when you finish
  • Complete online assessments to test your knowledge and prove your skills
  • Earn digital course certificates and a final award that you can share online, with potential employers, and your professional network
  • Keep access to the content of courses you complete even after your subscription ends

Learning on FutureLearn

Your learning, your rules

  • Courses are split into weeks, activities, and steps to help you keep track of your learning
  • Learn through a mix of bite-sized videos, long- and short-form articles, audio, and practical activities
  • Stay motivated by using the Progress page to keep track of your step completion and assessment scores

Join a global classroom

  • Experience the power of social learning, and get inspired by an international network of learners
  • Share ideas with your peers and course educators on every step of the course
  • Join the conversation by reading, @ing, liking, bookmarking, and replying to comments from others

Map your progress

  • As you work through the course, use notifications and the Progress page to guide your learning
  • Whenever you’re ready, mark each step as complete, you’re in control
  • Complete 90% of course steps and all of the assessments to earn your certificate

Want to know more about learning on FutureLearn? Using FutureLearn