Mastering Financial Statement Analysis

208 pages [76 self-teaching + 132 self-quizzes with detailed answers] 

Section 1: How to use ratios. Measure a firm’s financial health. Where to find the numbers to use for ratios.

Section 2: Can the firm pay its short-term obligations? Find out with the current and quick (“acid test”) ratios.

Section 3: Measure liquidity (ability to turn assets into cash). Measure the quality of your company’s A/R and collection efforts and foresee problems in future sales, pricing or inventory with the inventory-turnover and A/R-turnover ratios.

Section 4: Rate a firm’s efficiency. See if sales are providing sufficient return on your company’s investment in fixed assets with the sales-to-fixed-assets ratio. Evaluate your company from one period to another period using the profit-margin ratio.

Section 5: Debt management. Predict when losses will start to hurt your company’s credit rating with the total-liabilities-to-total-assets ratio. Forecast long-term solvency and when the company must stop borrowing with the times-interest-earned ratio.

Section 6: Evaluating return on investment. Uncover the true return on investment with the return-on-investment ratio. Assess return to stockholders with the return-on-stockholders’ equity ratio.

Section 7: More tools for evaluating company performance. Learn how to compare financial statement items year to year and how to evaluate key sections of the income statement and balance sheet.

Section 8: Company v. industry performance. Where to find standards of comparison and industry norms to see how your company is doing.

Section 9: Stock market ratios. Easily measure any stock’s performance the way the pros do. Master the earnings-per-share ratio . . . price-earnings ratio . . . dividend-payout ratio.

Publisher: AIPB