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Financial Statement Analysis – Ratio Analysis

Financial analysts commonly use financial ratios to evaluate the investment worthiness of a company’s equity or debt.  Ratio analysis is commonly done in comparison to other companies of similar industry. When analyzing financial ratios, the analyst should consider the values in the context of the business cycle, trends, and industry or competitor standards. 5 Ratio

Inventory Turnover and Days of Inventory on Hand (DOH)

Inventory turnover is an important activity ratio, and provides a measure of how effectively a business is using its inventory. These ratios measure how many times the company’s inventory has been turned over or sold during a specified period. For example, an inventory turnover ratio of 10 means that the inventory has been turned over