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.
Who Should Take this Course?
This course is necessary for all professionals who deal with financial reports and need to understand how the data can be analyzed to accurately assess their organization's financial strength.
This course requires student knowledge of financial statements. If you are unfamiliar with financial statements, we recommend completing Understanding Financial Statements (HAME513) prior to enrolling in this course.
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
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
- Scott Gibson, Professor of Finance and J.E. Zollinger Term Professor, The College of William & Mary School of Business
- Steven Carvell, Professor;Academic Director of the Center for Real Estate and Finance, School of Hotel Administration