Financial statement analysis

What is financial statement analysis?

Financial leverage

Preparation of common-size financial statements

Vertical (common-size) analysis of financial statements

Horizontal or trend analysis of financial statements

Capital gearing ratio

Current assets to equity ratio

Fixed assets to equity ratio

Proprietary ratio

Times interest earned (TIE) ratio

Debt to equity ratio

Dividend payout ratio

Dividend yield ratio

Return on capital employed ratio

Earnings per share (EPS) ratio

Return on common stockholders’ equity ratio

Return on total equity or shareholders’ investment ratio

Expense ratio

Operating ratio

Price-to-earnings ratio (P/E ratio)

Gross profit (GP) ratio

Net profit (NP) ratio

Fixed assets turnover ratio

Working capital turnover ratio

Average payment period

Accounts payable turnover ratio

Inventory turnover ratio (ITR)

Assets turnover ratio

Average collection period

Receivables turnover ratio

Current cash debt coverage ratio

Absolute liquid ratio

Quick ratio or acid test ratio

Current ratio

Classification of financial ratios