Using Ratio Analysis to Evaluate Financial Performance

The ability of an organization to analyze its financial position is essential for improving its competitive position in the marketplace. Through a careful analysis of its financial performance, the organization can identify opportunities to improve performance at the department, unit, or organizational level.

In this course, participants will learn to use several ratio analysis instruments to achieve a comprehensive understanding of a firm's financial performance. The course then addresses how this financial health information can be used as a foundation upon which to design and implement initiatives for increased productivity and profitability.

Key Benefits

Participants who complete this course will be able to…

• Use ratio analysis to identify areas of strong financial performance and those that need improvement
• Accurately assess the financial performance of a department, unit, or organization relative to its competitors or to its own past performance

Topics Include

Module 1- Asset Management Ratios

• Introduction to Ratio Analysis
• Ratio Types
• Overview of Asset Management Ratios

Module 2 - The Cash Conversion Cycle

• Calculate Days Sales in Inventory (DSI)
• Caculate Days Sales Outstanding (DSO)
• Calculate Days Payable Outstanding (DPO)
• Cash Cycle Comparisons

Module 3 - Fixed Asset Ratios

• Calculate Fixed Asset Turnover
• Calculate Total Asset Turnover

Module 4 - Solvency and Capital Structure Ratios

• Calculate the Current and Quick Ratios
• Calculate the Times Interest Earned (TIE) Ratio
• Calculate the Book Leverage, Debt-Equity and Equity Multiplier Ratios

Module 5 - Profitability Ratios and Dupont Analysis

• Explore Profitability Ratios
• Calculate the Gross Profit, Operating Profit and Net Profit Margins
• Calculate the Return on Assets (ROA) and Return on Equity (ROE)
• Profitability Ratios Assessment

Module 6 - Final Course Assignments

• Verify Discussion Participation
• Course Project, Find the Relevance