# Corporate Finance #2 Financial Ratios

Learn financial ratios from a corporate finance perspective from a Certified Public Accountant (CPA)

Language: english

Note: 4.5/5 (217 notes) 35,030 students

Instructor(s): Robert (Bob) Steele

Last update: 2022-09-28

## What you’ll learn

• Know how to use financial ratios to help make decisions from a corporate finance perspective
• Explain the Dupont System of Analysis
• Calculate and interpret profit margin percent
• Calculate and understand return on investment (ROI)
• Calculate and explain total asset turnover
• Calculate and interpret expense to sales ratio
• Calculate and understand return on assets and return on equity
• Calculate and explain average accounts receivable collection period
• Calculate and understand times interest earned and fixed charge coverage
• Explain return on equity trend analysis
• Use ratio analysis to compare divisions of an organization
• Project financial statements using ratio analysis

## Requirements

• There is introductory material we have included in a prior course that is recommended but not required

## Description

We will learn how to use ratio analysis to help with decision making from a corporate finance perspective. The financial statements, including the balance sheet and income statement, are the primary tools used for ratio analysis. The financial statements help us understand past performance and where the organization stands at this time. Ratio analysis helps us project future performance and where the organization may stand in the future.

This course will demonstrate concepts using many practice problems, including problems using Microsoft Excel. Each Microsoft Excel problem will include a downloadable worksheet with at least two tabs, one being the answer key, the other being a preformatted worksheet that can be used to work the problem in a step-by-step format along with instructional videos.

Learners will know what ratio analysis is. They will understand the DuPont System of analysis.

We will demonstrate the concept of return on investment (ROI) and apply it to many scenarios.

The course will demonstrate return on asset, total asset turnover, & profit margin calculations.

We will discuss return on equity and debt to equity ratios and how they can be used.

Learners will understand how to calculate the accounts receivable collection period.

We will also cover times interest earned and fixed charge coverage calculations.

The course will demonstrate return on equity trend analysis.

We will show how ratio analysis can be used to compare different divisions of an organization.

Learners will be able to use ratio analysis to project performance in the future, constructing a projected income statement and balance sheet.

## Who this course is for

• Students
• Entrepreneurs

## Course content

• Introduction
• Financial Ratios
• 315 DuPont System of Analysis
• Practice Probs – Financial Ratios
• OneNote Resource
• 311 Profit Margin Percent
• 312 Return on Investment (ROI)
• 313 Return on Assets, Total Asset Turnover, & Profit Margin
• 314 Return on Investment, Total Asset Turnover, & Profit Margin
• 315 Profit Margin Two Years Comparison & Income Statement
• 317 Expense to Sales Ratios
• 318 Return on Assets, Return on Equity, & Asset Turnover
• 325 Total Asset Turnover & Return on Equity-More Complex Relationships
• 326 Total Asset Turnover, Return on Equity, & Profit Margin
• 327 Return on Equity & Other Ratios Two Company Comparison
• 328 Average AR Collection Period
• 331 Turnover Ratios Two Year Comparison
• 332 Multiple Ratio Calculations
• 333 Times Interest Earned & Fixed Charge Coverage
• 337 Asset Turnover & Return on Equity Trend Analysis
• 338 Asset Turnover & Debt to Asset Compared to Industry
• 339 Net Profit Margin & ROA Division Comparison
• 342 Ratios to Create Current Assets Portion of Balance Sheet
• 343 Use Ratios to Create a Balance Sheet
• 344 Use Ratios to Create Account Balances
• 346 Comprehensive Ratio Analysis
• 347 P1 Comprehensive Ratio – Two Companies Part 1
• 347 P2 Comprehensive Ratio – Two Companies Part 2
• Excel Probs – Financial Ratios
• 311 Profit Margin Percent
• 312 Return on Investment (ROI)
• 313 Return on Assets, Total Asset Turnover, & Profit Margin
• 314 Return on Investment, Total Asset Turnover, & Profit Margin
• 315 Profit Margin Two Years Comparison & Income Statement
• 317 Expense to Sales Ratios
• 318 Return on Assets, Return on Equity, & Asset Turnover
• 325 Total Asset Turnover & Return on Equity-More Complex Relationships
• 326 Total Asset Turnover, Return on Equity, & Profit Margin
• 327 Return on Equity & Other Ratios Two Company Comparison
• 328 Average AR Collection Period
• 331 Turnover Ratios Two Year Comparison
• 332 Multiple Ratio Calculations
• 333 Times Interest Earned & Fixed Charge Coverage
• 337 Asset Turnover & Return on Equity Trend Analysis
• 338 Asset Turnover & Debt to Asset Compared to Industry
• 339 Net Profit Margin & ROA Division Comparison
• 342 Ratios to Create Current Assets Portion of Balance Sheet
• 343 Use Ratios to Create a Balance Sheet
• 344 Use Ratios to Create Account Balances
• 346 Comprehensive Ratio Analysis # 1
• 347 P1 Comprehensive Ratio – Two Companies
• 347 P2 Comprehensive Ratio – Two Companies Part 2

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