FINANCIAL
STATEMENT ANALYSIS 1-47
We also described the most common financial ratios:
·
Liquidity Ratios
Current
Quick (Acid-Test)
·
Asset Management Ratios
Inventory Turnover
Average Collection Period
Fixed Assets Turnover
Total Assets Turnover
·
Debt Management Ratios
Total Debt to Total Assets
Times Interest Earned (TIE)
Fixed Charge Coverage
·
Profitability Ratios
Profit Margin
Basic Earnings Power
Return on Total Assets
Return on Common Equity
·
Market Value Ratios
Price / Earnings
Market / Book
Combining ratio analysis with financial statement analysis provides the
analyst with a set of tools to begin to understand how a company
operates, how it generates cash flow, and how the company compares
to competitors in the industry. These tools will assist the analyst in
finding the areas of a company that need attention and management
consideration.
You have completed Unit One: Financial Statement Analysis. Please complete Progress
Check 1.4, then continue to Unit Two: Financial Markets and Interest Rates. If you answer
any questions incorrectly, please review the appropriate text.