How to Master Financial Statements: Financial Ratio Analysis and Interpretation
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.
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 course 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.
You can enhance your learning experience by following related courses, designed by Coventry University:
- Financial Statements Unlocked: How to Understand Corporate Finance and Financial Management
- Break-Even Analysis Unlocked: How to Understand the Profit and Loss Statement
- How to Make Better Capital Investment Decisions and Recognise Investment Opportunities
- Divisional Performance Measurement: How to Achieve Operational Excellence
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