How well is the business doing? Evaluating a firms financial condition
Summary :
Table of Contents
- Introduction
- Evaluating a firm's financial condition
- Purpose of financial analysis
- Techniques of financial statement analysis
- Financial ratios
- Ratio categories
- What is inventory turnover?
- Cash conversion cycle
- Cash conversion chart
- What is financial leverage?
- Du Pont analysis
- A study on sustainable growth
- Bottom line for use of financial ratios
- Components of the income statement
- Limitations of financial statement analysis
- Comparative analysis of business and economic conditions
- Trend analysis
- Conclusion
Abstract
The presentation will first talk about the purpose of financial analysis before moving on to the techniques and financial ratios. It will also show how to understand if the company is running a risk of liquidity. It will then talk about current ratios and liquidity of current assets. There will also be a section on accounts receivable turnover followed by the average collection period which will give way to inventory turnovers and how day-to-day operations function. Next the presentation will pick up the various ratios like financial Leverage Ratios and Solvency Ratios and talk about them in more detail along with demonstrating a calculation of Debt Ratio & Debt-Equity Ratio. It will also cover various other points such as sustainable growth, per share data for common stock, etc before concluding with a trend analysis of the percentage changes in financial statement items over a period of time.
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