Financial Ratio Analysis with Excel Model

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					                                  FINANCIAL RATIOS ANALYSIS

Working with financial information can be overwhelming if information is not dissected and positioned
in an easy to use metric measurement which gauges the performance of the company. Financial ratios
provide the users with metric performance measurements to understand the business trend over and
create a comparison standard to the competitors and the industry. Using financial ratios for comparison
along the industry and among different firms necessitate understanding the ration calculations; in some
instances the computation method has to be harmonized to arrive at fair judgment on firm performance
in comparison to the industry. The application and interpretation will be same among different firms,
but ratios computations are influenced by how the inputs from the financial statements are determined.
A ratio might have been calculated using average amount of the balance sheet item while the same ratio
for a different firm might have calculated using the end of the year balance sheet amount.

A liquidity ratio as the name indicates measures how well the company position is placed to meet the
coming up obligations and without impending operations. The ratio is measured in coverage times and it
is calculated as current assets divided by current liabilities, the higher the coverage time the favorable
the ratio and the more liquid the company. A low coverage rate instigate rising a red flag, because this
might be an indication the company will be running into trouble of sustaining the operations and paying
the due liabilities. There are different degrees of liquid ratios used to gage the company liquidity, quick
ratio and cash ratios have a high degree as they bot
Description: A company can use this document to calculate various financial ratios. This spreadsheet allows the user to input the financial data. The spreadsheet then calculates liquidity measurement ratios, profitability indicator ratios, debt ratios, operating performance ratios, cash flow indicator ratios, and investment valuation ratios. Financial ratios are used to perform quantitative analysis; they show the statistical relationships between pieces of financial data. Such ratios can be used to evaluate past, current, and projected performance of a company, or they can be used to compare two different companies.
This document is also part of a package Financial Models Bundle 7 Documents Included