This BeeBusinessBee video focuses on the topic of efficiency ratios. It looks that the concept of conducting ratio analysis from a set of financial accounts, specifically what would be required if you were being asked to assess the efficiency of an organisation?
This video forms part of a series of videos on this topic and has been designed with questions that will test your knowledge and understanding. It is important to remember to pause the video when you reach a series of questions.
Remember that additional resources and materials can be found online at; www.beebusinessbee.co.uk

Views: 7038
Bee Business Bee

This revision video explains the basis and calculation of two popular and important financial efficiency ratios - receivables days and payables days.

Views: 36681
tutor2u

Welcome to the Investors Trading Academy talking glossary of financial terms and events.
Our word of the day is “Efficiency Ratio”.
No matter what kind of business a company is in, it must invest in assets to perform its operations. Efficiency ratios measure how effectively the company utilizes these assets, as well as how well it manages its liabilities.
A ratio used to calculate a business’s efficiency. Not all businesses calculate the efficiency ratio the same way. The ratio can be calculated in various ways:
In all methods, an increase means the company is losing a larger percentage of its income to expenses. If the efficiency ratio is getting lower, it is good for the corporation and its shareholders. Also referred to as the overhead burden or overhead efficiency ratio.
Some common ratios are accounts receivable turnover, fixed asset turnover, sales to inventory, sales to net working capital, accounts payable to sales and stock turnover ratio. These ratios are meaningful when compared to peers in the same industry and can identify businesses that are better managed relative to the others. Also, efficiency ratios are important because an improvement in the ratios usually translate to improved profitability.
By Barry Norman, Investors Trading Academy

Views: 5314
Investor Trading Academy

Ratio analysis is an important way to analyse a company’s financial statements, they measure various aspects of a company’s operating and financial performance. Input to calculate ratio’s come from the financial statements.
Ratios can be classified into 4 broad categories namely:
Efficiency ratios
Liquidity & solvency ratios
Profitability ratios
Valuation ratios
Efficiency ratios are also known as activity ratios, they measure how efficiently the company performs its day to day operations.
The important efficiency ratios discussed are:
(* All ratios in this video are calculated for the whole year)
Inventory turnover ratio
Receivable turnover ratio
Payable turnover ratio
Fixed asset turnover ratio
Inventory turnover - measures how many times and how fast a company has sold its inventory in the year
The inventory turnover ratio is calculated as
Inventory turnover = COGS/ Average inventory
The Inventory turnover ratio for Star Motocorp was (*All figs are in Rs. Million)
200000/5000 = 40 Times, meaning it sold its inventory 40 times during the year
Inventory days are the number of days it takes a company to sell its inventory. Is calculated as = No of days in a period/Inventory turnover.
Inventory days for Star Motocorp for FY17 was
365/40 = 9 days, meaning they sold their inventory every 9 days
Lower inventory days can mean the company sells out its inventory quickly or it is not stocking the correct amount of inventory. An investor needs to study the financial statements of the company in detail to find out the exact reason for the same.
Receivable turnover – Measures the efficiency with which a company collectes cash from its debtors/customers.
The receivable turnover ratio is calculated as
Receivable turnover – Sales/ Average receivables
The receivable turnover ratio for Star Motocorp was
305000/12000 = 25.41, meaning they had collected cash 25.41 times from its customers during the year
Recievable days for Star Motocorp was
365/25.41 = 14 days
Meaning the company collected cash from its customers every 14 days
Lower receivable days means that the company is efficient and fast in collecting cash from its customers and is a good sign.
Payable turnover – measures the no of times a company pays its creditors/suppliers from whom it has purchased raw materials during the year
The payable turnover ratio is calculated as
Payable turnover = COGS/ Average payables
Payable turnover for Star Motocorp was
200000/30000 = 6.66, signifying the company paid its suppliers 6.66 times during the year
Payable days of Star Motocorp was = 365/ 6.66 = 54 days.
Star Motocorp paid its suppliers once in every 54 days
Higher payable days can indicate that the company is enjoying favourable credit terms or is unable to pay its suppliers. An investor needs to study the company’s financial statements to find out the reason for the same
Fixed asset turnover – Measures the efficiency of a company in managing its fixed assets.
It is calculated as Fixed asset turnover – Sales/ Average net fixed assets.
The fixed asset turnover for Star Motocorp was
305000/40000 = 7.6, It signifies that for every 1 Re of fixed assets that the company had it generated sales of Rs 7.6
A higher ratio needs to be seen in positive light.
It is very important for investors to study all ratios over a period of time and compare them across different companies in the same sector/industry.

Views: 338
Fintapp

Profitability ratios look at the returns earned by a business both in terms of its trading activities (sales revenue) and also how much is invested in earning those returns (capital employed). This revision video introduces the four main profitability ratios.

Views: 76426
tutor2u

This screncast demonstrates the calculation of eight basic ratios for assessing an entity's financial performance.

Views: 2034
Luke Fannon

OMG wow! So easy clicked here http://mbabullshit.com/ for Financial Ratio Analysis Explained
Financial Ratio Analysis Explained in 3 minutes
Sometimes it's not enough to simply say a company is in "good or bad" health...
To make it easier to compare a company's health with other companies, we have to put numbers on this health, so that we can compare these numbers with the numbers of other companies... So now... how do we use numbers to assess company health? http://www.youtube.com/watch?v=TZZFBkbC2lA This is where Financial Ratios come in...
Very common types of financial ratios are Liquidity Ratios, Profitability Ratios, and Leverage Ratios. Liquidity Ratios can tell us how easily a company can pay its debts... so that the company doesn't get eaten up by banks or other creditors. An example of this is the Current Ratio... This tells us how much of your company's stuff can be easily changed into cash within the next 12 months so that it can pay debts which need to be paid also within 12 months. The higher your current ratio is, the less risky a situation your company is in.
Now moving on... Profitability Ratios can tell us how good a company is at making money. An example of this is the Profit Margin Ratio. This tells us how much profit your company earns compared to your company's sales. Normally, a higher number is better; because you want to earn more profit for every $1 of sales that you get.
And finally, what about Leverage Ratios? These can tell us how much debt the company is using to make the company run and stay alive. An example of this is the simple Debt Ratio. This tells us how much % of a company's assets are paid for by debt. Normally, a company is considered "safer" when the debt ratio is low. Note that this was just a very simple overview. There are a lot more financial ratios & many different ways of using them; plus a lot of problems and disadvantages in using them as well. Would you like to SUPER easily learn more about many financial ratios with even deeper analysis & detail? Check out my FREE videos at MBAbullshit.com
See ya there!

Views: 1277649
MBAbullshitDotCom

An introduction to Financial Ratio Analysis in hindi. Financial ratios like profitability ratios, liquidity ratios, solvency ratios (leverage or debt ratios), activity ratios (efficiency ratios) and valuation or market ratios are analyzed before making an investment decision or to judge the financial health of a company.
Few examples are discussed for each type of ratio for eg. profit margin, current ratio, debt ratio, inventory turnover ratio, earnings per share (EPS) and P/E ratio.
Related Videos:
Profitability Ratios - Gross, Net, Operating Profit Margin
: https://youtu.be/pHgiuO2ZYoU
Liquidity Ratios & Solvency Ratios: https://youtu.be/ZMSW9BYb_Yo
Return on Investment (ROI): https://youtu.be/ij7y5e2MVG4
Earnings Per Share (EPS): https://youtu.be/SDXp64flfJI
इस वीडियो में जानिए फाइनेंसियल रेश्यो एनालिसिस का हिंदी में परिचय। फाइनेंसियल रेश्यो जैसे की प्रोफिटेबिलिटी रेश्यो, लिक्विडिटी रेश्यो, सॉल्वेंसी रेश्यो (लिवरेज या डेब्ट रेश्यो), एक्टिविटी रेश्यो (एफिशिएंसी रेश्यो) और वैल्यूएशन या मार्केट रेश्यो को एनालाइज़ किया जाता है कोई भी निवेश का निर्णय लेने से पहले और किसी कंपनी के फाइनैंशल हेल्थ को जज करने के लिए भी किया जाता है।
हर एक प्रकार के रेश्यो के लिए कुछ उदाहरणों पर चर्चा की गयी है जैसे: प्रॉफिट मार्जिन, करंट रेश्यो, डेब्ट रेश्यो, इन्वेंटरी टर्नओवर रेश्यो, अर्निंग्स पर शेयर (EPS) और P/E रेश्यो।
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In this video, we have explained:
What are the financial ratios?
How financial ratio helps you to understand the financial health of a company?
What is the concept of financial ratios?
How to analyze a company's financial health using financial ratios?
How many types of financial ratios are used for the financial status of a company?
What is the meaning of different financial ratios?
How to calculate different financial ratio?
How to do financial ratio analysis?
What is the concept of financial ratio analysis?
Which financial ratios can be used to analyze the financial status of a company?
What is the basic concept of profitability ratios, liquidity ratios, solvency ratios, activity ratios and market ratios?
Make sure to Like and Share this video.
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Hope you liked this video in Hindi on “Financial Ratios & Analysis”.

Views: 35293
Asset Yogi

This short revision video on financial ratios explains the Inventory Turnover ratio.
Inventory turnover is one of the three main working capital "efficiency" ratios that helps assess how well a business is managing its working capital (trade receivables + inventory - trade payables).

Views: 9965
tutor2u

This revision video introduces the concept of ratio analysis.

Views: 99318
tutor2u

Video explains what are activity ratios

Views: 1997
FinShiksha

Mere reading of figures in a Company's financial statement may give an inaccurate or misleading picture of the Company’s performance and its financial standing in the industry. To understand any figure in the B/S or P/L account, it needs to be related to various other figures or be compared with peer group companies. Ratio Analysis helps you to understand and analyse every business - its profitability, solvency, efficiency, capital strength, liquidity, periodic performance and much more. Knowledge and use of Ratio Analysis is a must for every investor, business manager, banker, competitor, research analyst, creditor and any person taking a financial or commercial decision about the Company.

Views: 7056
Project Share The Wisdom

http://www.subjectmoney.com
http://www.subjectmoney.com/articledisplay.php?title=Financial%20Statement%20Analysis%20and%20Ratios
In this financial statement analysis tutorial we are covering liquidity measures or short term solvency ratios. Here you will learn about the current ratio, the quick ratio (acid test) and the cash ratio. Short-term solvency measures are used to determine whether or not a company would be able to pay off its short-term liabilities if they were to come due within the near future.
Please don't forget to subscribe, rate and share our videos. Please also visit our website at http://www.subjectmoney.com and http://www.excelfornoobs.com
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https://www.youtube.com/watch?v=G8v9hF0k3gI

Views: 72034
Subjectmoney

This video looks at the processes of Financial Management, in particular financial ratios (Efficiency).
The information presented in this video has been sourced from a variety of locations, and/or has been provided to me through a long line of other educators, thus, the exact location is unknown. No attempt is made to claim this as my own work.
Sources:
Chapman, Stephen, Natalie Devenish, Mohan Dhall and Cassy Norris. Business Studies in Action: HSC Course. 4th ed. Milton, QLD: John Wiley & Sons, 2011.

Views: 531
Marco Cimino

This video talks about analyzing and evaluating the company's financial health using the financial ratio analysis where the key ratios used to track the company's performance are: common size ratios, liquidity ratios, efficiency ratios and solvency ratios. For more videos, please visit our website http://www.potential.com
This video is part of the Khalifa Fund training Program, a free online training program that supports and supplies SMEs with free seminars, funding opportunities and exposure!

Views: 349
SME Toolkit UAE

Inventory turnover, or the inventory turnover ratio, is the number of times a business sells and replaces its stock of goods during a given period. On the other hand, Days Sales in Inventory (DSI), sometimes known as inventory days or days in inventory, is a measurement of the average number of days or time required for a business to convert its inventory into sales.
Click here to learn more about Inventory Turnover: https://corporatefinanceinstitute.com/resources/knowledge/finance/inventory-turnover/
Click here to learn more about Days Sales in Inventory: https://corporatefinanceinstitute.com/resources/knowledge/modeling/days-sales-in-inventory/

Views: 886
Corporate Finance Institute

VCE Accounting Unit 4. Slides of this presentation can be found at my SlideShare page http://www.slideshare.net/mjall3

Views: 1100
Michael Allison

For details, visit: http://www.financewalk.com
Ratio Analysis, Financial Ratio Analysis in Excel
Financial Ratio Analysis
Meaning-
" The process of calculating the relationships between various pairs of financial statement values for the purpose of assessing a company's financial condition or performance is called ratio analysis."
Users of Financial Analysis
Financial Analysis can be undertaken by management of the firm, or by parties outside the firm like owners, creditors, investors and others. The nature of analysis will differ depending on the purpose of the analyst.
• Trade creditors- are interested in firm's ability to meet their claims over a very short period of time. Their analysis will, therefore, confine to the evaluation of the firm's liquidity position.
• Suppliers of long term debt- on the other hand, are concerned with the firm's long-term solvency and survival. They analyse the firm's profitability over time, its ability to generate cash to be able to pay interest and repay principal and the relationship between various sources of funds i.e. capital structure relationships. Long-term creditors do analyse the historical financial statements, but they place more emphasis on the firm's projected, or pro forma, financial statements to make analysis about its future solvency and profitability.
• Investors -- who have invested their money in the firm's shares, are most concerned about the firm's earnings. They restore more confidence in those firms that show steady growth in earnings. As such, they concentrate on the analysis of the firm's present and future profitability. They are also interested in the firm's financial structure to the extent it influences the firm's earnings ability and risk.
• Management - of the firm would be interested in every aspect of the financial analysis. It is their overall responsibility to see that the resources of the firm are used most effectively and efficiently, and that the firm's financial condition is sound.

Views: 107764
Avadhut Nigudkar

Part three of a multipart example on how to calculate basic financial ratios. This part focuses on asset management ratios -- inventory turnover, days sales outstanding, fixed asset turnover, and total asset turnover.

Views: 23796
Kevin Bracker

Cash conversion cycle = DOH + DSO - DPO. For more financial risk videos, visit our website! http://www.bionicturtle.com

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Bionic Turtle

Full Master How Money Flows and Build Business Success Course
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Working Capital-What is the working Capital formula? It is an area that is involved with a great deal of money flow. Put simply a crucial, often overlooked, part of any business.
It is an area that is not understood properly leading to working capital management problems. If it fails to work well the business will suffer.
A simple working capital definition is the current assets of the business less the current liabilities. In these areas there are so many parts of a business at work.
It is necessary to gain an understanding of these different accounting parts to fully understand and learn how well money flows.
This tutorial starts to discuss these key areas that are at play within working capital.It introduces two areas you may already know or have heard about called trade accounts receivable and trade accounts payable.
Activity ratios help us focus on working capital, and follow on from the financial ratio tutorials that previously discussed liquidity in the business.
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If you prefer to read rather than watch the video here is a summary transcript:
"In this tutorial the key learning points will be: first of all, an introduction to this important concept of the working capital formula; we’ll look at some common misconceptions around this topic; and this will lead us into what really is working capital in any business, and in doing that we’ll tease out some of the key important issues for a thorough understanding of this subject.
So, this area of working capital really is the engine of the business and if you want to use that analogy in talking about a car engine, if the car engine doesn't go well or goes completely, you know what happens - the car is in need of help, it’s in need of repairs, it needs looking at.
In a business, because an awful lot of money circulates in this area called working capital, in essence if too much money is tied up in this area it’s a complete waste of resources. But balanced against that, if the business has too little, that too can cause problems. So it’s about striking an appropriate balance.
Before we analyse activity ratios and the working capital formula a little bit further, why is this area often misunderstood? Quite simply because many people are not exactly sure what it means. People hear the name, they think it’s an unusual name, but what does it really mean?
Generally, most people know what capital means, but when we put this word called working in front of the word capital it suddenly almost changes the understanding of it.
But the key is the name working. Why is that? Because this type of capital on a minute by minute, hour by hour, day by day, week by week, year by year, is continually doing the hard work in any business.
So it’s time to start to see what does it really include?
Quite simply, the working capital definition is the current assets of the business less its current liabilities and the majority of the working capital in any business, that is the majority of the current assets less the current liabilities, will fall into three key business areas.
Firstly, the accounts receivable, and these are people who owe the business money. The second key area will be the accounts payable and these are people that the business owes money to. Thirdly, the final key area is inventory turnover and this is commonly referred to as the stock in the business or the stock turnover.
So know that you know the working capital definition and you know three major areas that it relates to, there are three points to notice.
Firstly, two of the three key areas in any business relate to the current assets and these are your accounts receivables and your inventory turnover.
Secondly, one of these areas also relates to current liabilities in the business and these are your accounts payable.
Thirdly, the calculations that you see are based on what are called trade accounts, and these are the heart of any business. For example, your trade accounts receivables - these are the customers who owe the business money.

Views: 29576
Macs Finance

Profitability Ratio Analysis: Financial Ratio Analysis Explained
Support AccoFina's Patreon if you are a Fan or Believer in my work, https://patreon.com/accofina
Time Markers:
1) The Profit Margin 1:17
2) The Gross Profit Margin 5:47
3) The Return on Assets 14:28
4) The Return on Equity 21:47
5) Different ways to conduct ratio analysis 27:56
6) Key ideas with all ratio analysis 29:06
1) THE PROFIT MARGIN
Tells us how much profit is generated from sales.
Percentage of sales revenue that ends up as profit Good indicator of cost control and/or pricing power.
Profit Margin Formula:
Profit Margin = Net Income / Sales Revenue Example
Where do we find the Required Inputs?
Net Income: From the Income Statement
Sales Revenue: From the Income Statement
How to Interpret Changes in the Ratio:
Expenses have changed in relation to sales...
* Management is effective with cost control
* Economies of scale are being utilised.
Sales Revenue has changed in relation to expenses...
* Change in pricing power (bargaining position with consumers)
* Change in state of the economy and aggregate demand
2) THE GROSS PROFIT MARGIN (Very important for resellers and manufacturers)
Profit between cost of inventory and sales price.
How much sales revenue left to cover profit and all other expenses.
Gross Profit Margin Formula:
Gross Profit Margin = (Sales Revenue - Cost of Goods Sold) / Sales Revenue
Where do we find the Required Inputs?
Sales Revenue: From the Income Statement
Cost of Goods Sold: From the Income Statement
How to Interpret Changes in the Ratio:
Sales Revenue has changed in relation to cost of goods sold...
* Change in pricing power (bargaining position with consumers)
* Change in product or aggregate demand (without a flow through the supply chain yet)
* Market competitive position and pressures
Cost of Goods Sold has changed in relation to sales revenue...
* Power within the supply chain
* Change in supplier or production efficiency Changes in prices of particular commodity inputs
3) RETURN ON ASSETS
Return generated by the assets for those who funded the assets.
Insight into success of management in income generating asset allocation and utilisation.
Return on Assets Formula:
Return on Assets = (Income beforeTax + Interest Expense) / ((Assets at Start of Period + Assets at End of Period) / 2)
Where do we find the Required Inputs?
Income before Tax: From the Income Statement
Interest Expense: From the Income Statement
Assets at Start of Period: From the Previous Balance Sheet
Assets at End of Period: From the Current Balance Sheet
How to Interpret Changes in the Ratio:
Profitability has changed in relation to the level of assets...
* Management is getting ‘more from less’ in regards to assets
* Management has made good asset allocation decisions in terms of revenue
* Management has good control of costs in relation to expenses Previously mentioned reasons: e.g. economy, market power, competitive position
Level of assets have changed in relation to profitability...
* Assets may have suddenly increased through large, recent
* CapEx Assets may not be being replaced or replenished at the same rate
* Particular choice of depreciation/amortisation policies
4) RETURN ON EQUITY
Return generated for the owners of the business, the common stockholders.
Insight into success of any leverage used (when comparing to return on assets).
Return on Equity Formula:
Return on Equity = (Net Income - Preference Dividends) / ((Common Stockholder Equity at Start of Period + Common Stockholder Equity at End of Period) / 2)
Where do we find the Required Inputs?
Net Income: From the Income Statement
Preference Dividends: From the Income Statement or Investor Relations
Equity at Start of Period: From the Previous Balance Sheet
Equity at End of Period: From the Current Balance Sheet
How to Interpret Changes in the Ratio:
Profitability has changed in relation to the level of common stockholder equity...
* Management performance is changing in the eyes of, and on behalf of, the owners/employers
* Previously mentioned reasons: e.g. economy, market power, competitive position, cost control, asset utilisation
Common Stockholder Equity has changed in relation to profitability...
* The level of liabilities have changed (and thus equity)
* A stock issue or stock buyback (i.e. equity levels have changed)
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Views: 52470
AccoFina

The accounts payable turnover ratio is a liquidity ratio that measures how many times a company pays its creditors over an accounting period. On the other hand, Days Payable Outstanding (DPO) refers to the average number of days it takes a company to pay back its accounts payable.
Click here to learn more about this topic: https://corporatefinanceinstitute.com/resources/knowledge/accounting/days-payable-outstanding/

Views: 358
Corporate Finance Institute

In this lecture I have explained 'Control Ratios' through concept not merely a trick to remember the formula. This concept will help students while attempting question related to Overhead Variance in Standard Costing and in problems related to Budgetary Control.
This lecture explains the followings :
1. Activity Ratio
2. Efficiency Ratio
3. Capacity Ratio
4. Budget Time / Hours
5. Standard Time / Hours
6. Actual Time / Hours
🔴 Download Notes: https://drive.google.com/drive/folders/0BzfDYffb228JNW9WdVJyQlQ2eHc?usp=sharing
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Views: 12800
CA. Naresh Aggarwal

Learn more about liquidity ratios here on the tutor2u website:
https://www.tutor2u.net/business/reference?q=liquidity+ratio
In this short revision video, Jim Riley from tutor2u Business introduces the concept of liquidity ratios and explains how to calculate and interpret the two main ratios: the current ratio and acid-test ratio.

Views: 117289
tutor2u

Part of the "Ratios" series, this portion of the basic overview of financial statement analysis focuses on Efficiency. That is: how efficient are our resources (e.g., assets, capital) at producing results (e.g., net income).

Views: 1825
Econo McCall

Another lesson for Business Studies 3 students. This lessons looks at profitability ratios, the current ratio and the debt to equity ratio.

Views: 10206
Bernd Meyer

Definition Of Operating Ratio
What is the Formula for Operating Ratio?
What are the Components of Operating Ratio.
Objective Of Calculating Operating Ratio.
Examples of Operating Ratio.
The operating ratio is computed to establish relationship between operating cost and net sales. This is closely related to the ratio of operating profit to net sales.
Operating Ratio = Cost of goods sold+ Operating Expenses / Net sales X 100
or
Operating Ratio = Operating cost / Net sales X 100
Cost of sales includes direct cost of goods sold as well as other operating expenses, administration, selling and distribution expenses which have matching relationship with sales.
Financial charges such as interest, provision for taxation etc. are generally excluded from operating expenses.
Cost of Goods Sold = Operating Stock+Purchases+Direct Expenses + Manufacturing Expenses - Closing Stock or Sales - Gross Profit.
Operating Expenses = Administrative Expenses + Selling and Distribution Expenses.
Operating ratio is the test of the operational efficiency of the business. It shows the percentage of sales that is absorbed by the cost of sales and operating expenses. Lower operating ratio shows higher operating profit and vice versa. An operating ratio ranging between 75% and 80% is generally considered as standard for most manufacturing concerns. This ratio is considered to be a yardstick of operating efficiency but it should be used cautiously because it may be affected by a number of uncontrollable factors beyond the control of the firm. Moreover, in some firms, non-operating expenses form a substantial part of the total expenses and in such cases operating ratio may give misleading results.

Views: 8216
Alternate Learning

http://money.ko.mk Asset Management Ratios - Efficiency Ratios - Turnover Ratios

Views: 820
MoneyNewsNow

This revision video explains the concept of gearing and illustrates how the main gearing ratios are calculated and interpreted.

Views: 63798
tutor2u

Accounting Ratios: - A ratio is a Mathematical expression that shows the relationship between various items or groups of items. When rations are calculated on the basis of accounting information, they are called Accounting Ratios.
Ratio analysis is an important technique of financial analysis. It is the process of Determining and interpreting numerical relationship between figures of the financial statements.
Thus ratios analysis is very important in revealing the financial position and soundness of the business.
Objectives of Ratios Analysis:-
1) To know the areas of the enterprise which need more attention.
2) To know about the potential areas which can be improved on.
3) Helpful in comparative analysis of the performance.
4) Helpful in budgeting and forecasting.
5) To provide analysis of the liquidity, solvency, activity and profitability of the enterprise.
6) To provide information useful for making estimates and preparing the plans for future.
Limitation of Ratio Analysis:-
1) Accounting Ratios ignore qualitative factors.
2) Absence of universally accepted terminology.
3) Ratios are affected by window- dressing.
4) Effects of inherent limitation of accounting
5) Misleading results in the absence of absolute data.
6) Price level changes ignored.
7) Impressed by personal bias and ability of the analyst.
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Views: 269453
StayLearning

A video which examines our second efficiency ratio trade payable days. AKA. debtor days.

Views: 99
Mr Miles Harris

The efficiency ratio is a quick and easy measure of a bank's ability to turn resources into revenue. http://www.kautilyas.com/financial-analysis.html

Views: 1164
Kautilyas

In this video on Credit Analysis, we look at Credit Analysis from Beginner’s point of view.
𝐖𝐡𝐚𝐭 𝐢𝐬 𝐂𝐫𝐞𝐝𝐢𝐭 𝐀𝐧𝐚𝐥𝐲𝐬𝐢𝐬?
----------------------------------------
Credit analysis is a process of drawing conclusions from available data (both quantitative and qualitative) regarding the credit – worthiness of an entity, and making recommendations regarding the perceived needs, and risks.
𝐂𝐫𝐞𝐝𝐢𝐭 𝐀𝐧𝐚𝐥𝐲𝐬𝐢𝐬 𝐏𝐫𝐨𝐜𝐞𝐬𝐬
------------------------------------------
1. Proposal
2. Inspection
3. Financial security
4. Market Review
5. Presentation of Proposal
6. Sanction for assessment
7. Data Collection
8. Analysis of various parameters
9. Credit Rating
10. Presentation for sanction
11. Terms & Condition Established
12. Proposal Approved
𝐓𝐡𝐞 𝟓 𝐂'𝐬 𝐨𝐟 𝐂𝐫𝐞𝐝𝐢𝐭 𝐀𝐧𝐚𝐥𝐲𝐬𝐢𝐬
----------------------------------------------
1. Character
2. Capacity
3. Capital
4. Collateral (or guarantees)
5. Conditions
𝐂𝐫𝐞𝐝𝐢𝐭 𝐀𝐧𝐚𝐥𝐲𝐬𝐢𝐬 𝐑𝐚𝐭𝐢𝐨𝐬
--------------------------------------
1. Liquidity ratios
2. Solvability ratios
3. Solvency ratios
4. Profitability ratios
5. Efficiency ratios
6. Cash flow and projected cash flow analysis
7. Collateral analysis
8. SWOT analysis
To know more about Credit Analysis Ratio, you can go to this link here: https://www.wallstreetmojo.com/credit-analysis/

Views: 5514
WallStreetMojo

DuPont equation tutorial. ROE: Return On Equity. ROA: Return On Assets. ROS: Return On Sales. This video takes you through the financial ratios of the ROE formula, the ROA formula, the ROS formula, asset turnover and leverage, and shows how they fit together. The very basics and the very essence of financial ratio analysis!
ROE or Return On Equity is defined as Net Income divided by Equity. In other words, the net profit that a company has generated during a year, divided by the book value of the shareholder capital invested in the company. ROE is a measure of the rate of return to shareholders.
The 3-part version of the DuPont analysis shows you that ROE = ROS x asset turnover x leverage. The first two elements together, ROS multiplied by Asset Turnover, form ROA, Return On Assets. This ratio of ROA has many variations, some companies measure ROIC Return On Invested Capital, ROTC Return On Total Capital, ROCE Return On Capital Employed, or RONOA Return On Net Operating Assets. These are all variations on the same theme, you look at the returns (profit) generated during a period, and compared them to the capital invested in the company to generate those returns. ROA is an indicator of business success, influenced by two factors: ROS or margin performance, and asset turnover which you could call speed or velocity.
ROS or Return On Sales, is Net Income divided by Sales, which is an indicator of the relative profitability or operating efficiency: how many cents of profit are generated for every dollar of sales?
Asset Turnover is calculated as Sales divided by Assets, a measure of asset use efficiency.
The last element of the DuPont 3-part equation is leverage, Assets divided by Equity.
You can expand the DuPont formula to 5 steps, if you want even more analytical insight into the drivers of where your ROE increase or decrease is coming from. The two elements on the right stay the same: asset turnover and leverage. However, ROS gets split into three elements: Net Income divided by Earnings Before Tax, which is called tax burden, Earnings Before Tax divided by EBIT, called interest burden, and EBIT divided by sales, which is EBIT%. In a lot of companies, improving the EBIT% and increasing the Asset Turnover, are important targets for the management team, whereas the other elements are for the finance, treasury and tax departments to manage.
For an illustration of Return On Assets, my follow-up video analyzing ROA, ROS and asset turnover of Verizon and Walmart is highly recommended https://www.youtube.com/watch?v=2j8bfR8KqJ0
Philip de Vroe (The Finance Storyteller) aims to make strategy, finance and leadership enjoyable and easier to understand. Learn the business vocabulary to join the conversation with your CEO at your company. Understand how financial statements work in order to make better stock market investment decisions. Philip delivers training in various formats: YouTube videos, classroom sessions, webinars, and business simulations. Connect with me through Linked In!

Views: 53886
The Finance Storyteller

A brief introduction into three basic profitability ratios:
1. Gross Profit Ratio
2. Net Profit Ratio
3. Rate of Return on Equity Ratio
More videos, tasks, quizzes, handouts and other resources can be found at https://meyerflippedlearning.com/#!/home

Views: 14437
Bernd Meyer

A video exploring our third & final efficiency ratio: inventory turnover.

Views: 85
Mr Miles Harris

Revision of Activity or Turnover Ratios
Page link- https://ibb.co/ftgxx7
-~-~~-~~~-~~-~-
Please watch: "Important for exam | Chapter1 Analysis of financial Statement "
https://www.youtube.com/watch?v=Dl5bCtHmoiY
-~-~~-~~~-~~-~-

Views: 1873
Accounts Khazana

Comparing two companies: Revision of some simple ratios

Views: 22736
david hopcroft

Learn key financial metrics & ratios to analyze companies financial statements.
By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
You’ll learn about the key metrics and ratios used to analyze companies’ financial statements, including Return on Equity (ROE), Return on Assets (ROA), and Return on Invested Capital (ROIC), as well as Inventory Turnover, Receivables Turnover, Payables Turnover, the Current Ratio, and the Asset Turnover Ratio.
Table of Contents:
1:15 Why Metrics and Ratios Matter
4:58 Return on Equity (ROE), Return on Assets (ROA), and Return on Invested Capital (ROIC)
10:50 Asset-Based and Turnover-Based Ratios
14:40 Interpretation of Key Metrics and Ratios for Wal-Mart, Amazon, and Salesforce
19:32 Why the Key Metrics and Ratios Are Sometimes Not That Useful
Why Metrics and Ratios?
They let you evaluate and compare different companies, and see why one company might be worth more (higher valuation multiple) than others.
They let you answer questions such as:
How much equity is required to generate a certain amount of after-tax profit (Net Income)?
How much in assets is required to generate a certain amount of after-tax profit (Net Income)?
How much total capital is required to do this?
How dependent is a company on its assets?
How liquid is the company? Can it meet its obligations?
How quickly does it sell all its Inventory, pay its outstanding invoices, and collect its receivables?
ROA, ROA, and ROIC
Return on Equity (ROE) = Net Income / Average Shareholders’ Equity
Return on Assets (ROA) = Net Income / Average Assets
Return on Invested Capital (ROIC) = NOPAT / (Total Debt + Equity + Other Long-Term Funding Sources)
Return on Equity (ROE): How efficiently is a company using its equity to generate after-tax profits?
Return on Assets (ROA): How well is a company using its assets / how dependent is it on them?
Return on Invested Capital (ROIC): How well is a company using ALL its capital, or how much capital is required to grow its business?
Here, Wal-Mart easily ranks #1 in all these metrics because it has a very high ROE of 20-25%, an ROA of close to 10%, and an ROIC of 13-14%; for Amazon and Salesforce, these numbers are negative or close to 0%.
Asset-Based Ratios and Turnover-Based Ratios
Asset Turnover Ratio = Revenue / Average Assets
How dependent is a company on its asset base to generate revenue?
Current Ratio = Current Assets / Current Liabilities
How liquid is a company? Can it use its short-term assets to repay its short-term obligations, if required?
Inventory Turnover = COGS / Average Inventory
How many times per year does a company sell off all its Inventory?
Receivables Turnover = Revenue / Average AR
How quickly does a company collect its receivables from customers that haven’t paid in cash yet?
Payables Turnover = COGS / Average AP (*)
How quickly does a company submit cash payment for outstanding invoices?
Interpretation of Figures for Wal-Mart, Amazon, and Salesforce
On the surface, many of these metrics make Wal-Mart seem like a "better" company - much higher
ROE, ROA, and ROIC, and Amazon is negative on some of those!
Wal-Mart tends to have higher margins as well, and shows more consistency with those margins.
Similar inventory management, but Wal-Mart collects from customers and pays invoices much more quickly than Amazon. Wal-Mart is levered a bit more heavily, though.
And yet… Amazon is a much more expensive stock, or at least it was at this point in time, and the market values it much more highly based on metrics such as the P / E ratio.
At the time of this analysis, Wal-Mart P / E Ratio = 16x, and Amazon P / E Ratio = 456x!
How could that be possible? Is Amazon really nearly 30x as valuable as Wal-Mart with WORSE metrics?
Answer: The "Revenue Growth" line tells the whole story here.
You're comparing 2 very different companies – one is a mature, predictable, mostly slow-growing firm, and one is growing revenue at 20-30% per year, despite revenue in the tens of billions already.
Admittedly, Amazon's valuation still seems ridiculous, but it's not that surprising it's valued more highly than Wal-Mart, given that it's growing 20-30x more quickly.
The Bottom-Line: These metrics are MOST useful when comparing companies of similar sizes, growth rates, and margins – not as useful when you're comparing a high-growth company to a stable, mature firm.
RESOURCES
http://youtube-breakingintowallstreet-com.s3.amazonaws.com/105-14-Key-Financial-Metrics-Ratios.xlsx
http://youtube-breakingintowallstreet-com.s3.amazonaws.com/105-14-Key-Financial-Metrics-Ratios.pdf
http://youtube-breakingintowallstreet-com.s3.amazonaws.com/105-14-Amazon-Financial-Statements.pdf
http://youtube-breakingintowallstreet-com.s3.amazonaws.com/105-14-Salesforce-Financial-Statements.pdf
http://youtube-breakingintowallstreet-com.s3.amazonaws.com/105-14-Walmart-Financial-Statements.pdf

Views: 111382
Mergers & Inquisitions / Breaking Into Wall Street

Stock Turnover, Debtor and Creditor Days, Gearing

Views: 257
Bus-omics - Here to help

all about profitability ratios...
for more videos click
https://www.youtube.com/watch?v=Pp6oSc6pQa8
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hope you like the ppt animation.

Views: 1695
Sonu Singh - PPT wale

Revision of Profitability Ratios
Page link- https://ibb.co/bSmNx7
-~-~~-~~~-~~-~-
Please watch: "Important for exam | Chapter1 Analysis of financial Statement "
https://www.youtube.com/watch?v=Dl5bCtHmoiY
-~-~~-~~~-~~-~-

Views: 4136
Accounts Khazana

Video segment for Financial Statement Analysis

Views: 23
Ellen Tan

In order to calculate Asset turnover ratio follow the link:
http://www.financialratioss.com/efficiency-ratios/asset-turnover
More info on other financial ratios can be found here: http://www.financialratioss.com

Views: 3730
FinancialratiossCom