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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.

How to Master Financial Statements: Financial Ratio Analysis and Interpretation

  • 2 weeks

  • 5 hours per week

  • Digital certificate when eligible

  • Intermediate level

Find out more about how to join this course

  • Duration

    2 weeks
  • Weekly study

    5 hours
  • 100% online

    How it works
  • Unlimited subscription

    $189.99/yearLearn 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.

Syllabus

  • Week 1

    Profitability and liquidity ratios

    • Welcome

      Welcome to Week 1 of Ratio Analysis. Let's start our learning journey with an introduction to what financial ratios are, who uses them and what they mean for a business.

    • Calculating ratios

      Let's now look further into how to collect information from an annual report and apply a financial ratio.

    • Profitability ratios

      In this activity we now explore the ratios that reveal if a business is making profit or losing money.

    • Liquidity ratios

      How does a company know if it's able to cover its debts? Learn about liquidity ratios and how they measure a company's margin of safety.

    • Summary and reflection

      Reflect on what you've learned this week and find out what's coming up next week. This is also your chance to ask any questions you might have.

  • Week 2

    Efficiency, gearing and investor ratios

    • Welcome to Week 2

      Welcome to the second week of Ratio Analysis. Find out what we'll be learning this week.

    • Efficiency ratios

      In this activity we'll explore the ratios used to analyse how well a company uses its assets and liabilities to generate revenue.

    • Gearing ratios

      There are two main sources of funding for every company: equity and borrowing. Learn more about the relationship between the two in this activity.

    • Investor ratios

      An investor's ultimate goal is to make a return on their investment. Investor ratios provide an answer to the question: should I invest in this company or not?

    • Closing thoughts

      As we bring this short course to a close, you now have the oppurtunity to reflect upon your learning experience. What are your key takeaways?

When would you like to start?

Start straight away and join a global classroom of learners. If the course hasn’t started yet you’ll see the future date listed below.

  • Available now

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:

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.

  • Established

    1992
  • Location

    Coventry

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Ways to learn

Choose the best way to learn for you!

Subscribe & save

$189.99 for one year

Automatically renews

Develop skills to further your career

  • Access to this course
  • Access to 1,000+ courses
  • Learn at your own pace
  • Discuss your learning in comments
  • Tests to boost your learning
  • Digital certificate when you're eligible

Cancel for free anytime

Buy this course

$79/one-off payment

Fulfill your current learning need

  • Access to this course
  • Learn at your own pace
  • Discuss your learning in comments
  • Tests to boost your learning
  • Printed and digital certificate when you’re eligible

Limited access

Free

Sample the course materials

  • Access expires 12 Oct 2022

Find out more about certificates, Unlimited or buying a course (Upgrades)

Sale price available until 14 November 2022 at 23:59 (UTC). T&Cs apply.

Find out more about certificates, Unlimited or buying a course (Upgrades)

Sale price available until 14 November 2022 at 23:59 (UTC). T&Cs apply.

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