In this reading we will learn about how an analyst can use the financial reports to perform detailed financial analysis of a company.

A financial analyst uses many tools to perform detailed financial analysis of a company. The most widely used tools are ratio analysis, common size statement analysis, graphical analysis, and regression analysis. In this reading we will focus on calculating and interpreting financial ratios. We will learn about the important financial ratios, analysing the performance of a company using these ratios, and DuPont analysis.

Financial Analysis Techniques

Lessons

Common Ratios in Financial Analysis

Inventory Turnover and Days of Inventory on Hand (DOH)

Receivables Turnover and Days of Sales Outstanding (DSO)

Payables Turnover and Number of Days of Payables

Working Capital Turnover Ratio

Fixed Asset and Total Asset Turnover Ratio

Activity Ratios – Video Summary

Liquidity Ratios (Current Ratio, Quick Ratio, and Others)

Cash Conversion Cycle (CCC)

Solvency Ratios

Profitability Ratios

DuPont Analysis

Valuation Ratios

Financial Ratios: Uses and Limitations

Resources

Financial Analysis Techniques

Quizzes

Financial Analysis Techniques