Financial statements need to be analyzed in order to fully understand the data presented.  The nature of the analysis depends on the type of financial statement user: 

  • Internal users need to analyze the statements to review past performance and results, to get insight on areas of improvement and to compare their firm to competitors.  
  • External users need to analyze statements in order to determine if they should sell or purchase the firms’ products or services, loan the firm money, invest in the firm, and divest current investments in the firm. 

The course is made up of 10 modules and covers most financial ratios. The course starts with an overview of common size and base year analysis and then explores ratios to analyze liquidity, solvency and leverage. Activity ratios to analyze the quality of assets and operational efficiency are reviewed, followed by analysis of profitability and return ratios. The course ends with a review of market ratios using values per share, earnings and dividends. 

Many of the ratios are illustrated using the FY 2019 financial statements of NIKE Inc. 

The course content covers Financial Statement Analysis topics tested in the Certified Management Accountant (CMA) Part 2 examination as outlined by the CMA Part 2 exam content specification outline.

Topics include: 

  • Common size and base year analysis. 
  • Liquidity ratios. 
  • Solvency ratios. 
  • Leverage ratios. 
  • Activity ratios. 
  • Profit and return ratios. 
  • Market ratios. 

Course Key Concepts: Financial ratios, common size statements, horizontal analysis, vertical analysis, working capital, current ratio, quick ratio, cash ratio, cash flow ratio, net working capital ratio, capital structure, solvency, leverage, debt to equity ratio, long-term debt to equity ratio, debt to total assets ratio, debt service, debt coverage, interest coverage, fixed charge coverage, operating leverage, financial leverage, accounts receivable turnover, days sales outstanding, inventory turnover, days sales in inventory, operating cycle, cash cycle, gross profit percentage, operating profit percentage, net profit percentage, return on assets (ROA), return on equity (ROE),  book value per share, market to book ratio, basic earnings per share (EPS), diluted earnings per share (EPS), price/earnings ratio (P/E ratio), earnings yield, dividend yield, dividend payout ratio.


Learning Objectives
  • Discover how to prepare and analyze common size income statements and balance sheets.
  • Explore the analysis of working capital using ratios, including the current, quick, cash, cash flow and net working capital ratios.
  • Identify capital structure, solvency, and leverage.
  • Explore the analysis of capital structure using ratios, including the debt to equity, long-term debt to equity and debt to total assets ratios.
  • Identify debt service.
  • Explore the analysis of leverage using ratios, including the debt coverage, interest coverage, fixed charge coverage and cash flow to fixed charges ratios.
  • Explore the analysis of operational and financial leverage.
  • Explore the analysis of accounts receivable using accounts receivable turnover and days sales outstanding.
  • Explore the analysis of inventory using inventory turnover and days sales in inventory.
  • Recognize the differences between the operating and cash cycles.
  • Explore the key profitability and return ratios used to analyze income statements and returns on investments.
  • Discover how to analyze and compare publicly traded companies using market ratios including price earnings (P/E), dividend yield and dividend payout.
Last updated/reviewed: August 28, 2023
21 Reviews (94 ratings)


Anonymous Author
the instructor explains the financial ratio analysis very well by demonstrating a lot of examples and calculations that makes each module easy to understand and memorize. Highly recommend this lecture to everyone who is interested in financial analysis.

Anonymous Author
Very thorough course that covers almost every financial ratio imaginable. Excellent refresher or excellent course to learn these ratios from the beginning. The course slides are also highly detailed and very informative.

Anonymous Author
Good course for basic understanding of financial statement analysis and financial ratios. Goes through a broad range of different types of analysis, consistent with what you would find in a college acct/fin type course.

Member's Profile
Vary thorough and well explained course. Coghlan has a very engaging and easy presentation style. Given the amount of material covered, I did have to go back and do a thorough review prior to taking the exam.

Anonymous Author
Very helpful course!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Member's Profile
All business professionals, be they in management, accounting, or finance, should have a strong understanding of the key financial ratios discussed in this course.

Member's Profile
Instructor was very knowledgeable and presented the material very clearly and in an organized manner. Would definitely take another course with him.

Anonymous Author
Great overview course of mostly used financial ratios, how to analyze companies using these ratios. Great examples and easy to follow.

Member's Profile
I didn't like how long the course is. Voice is a little monotone. I like the questions. Helped me understand the criteria.

Anonymous Author
Great review of financial ratios. I enjoyed the pace followed by the instructor and would take this refresher again.

Anonymous Author
Good overview of most every key financial ratio, including how it is calculated and how it's used and interpreted.

Anonymous Author
This covered a lot of material and it was difficult to keep track of so many ratios in one course.

Anonymous Author
Very comprehensive and great practice problems. Spent just enough time on each of the topics.

Member's Profile
Good slide, great explanations, but difficult final exam. Some questions are poorly written.

Anonymous Author
Very interesting and informative course that is highly relevant to my current position.

Member's Profile
Good course to help understand ratio calculations and when they should be used.

Anonymous Author
This is a tough course. Lots of good information though and lots of examples.

Anonymous Author
Understand the company performance by using different ratio to analyse it.

Anonymous Author
Efficient review of ratios for the whole set of financial statements.

Anonymous Author
Well presented, easy to follow, not dull. Informative and relevant.

Anonymous Author
Another good course that is very valuable for all finance people

Course Complexity: Intermediate

No advanced preparation or prerequisites are required for this course.


Education Provider Information
Company: Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact: For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Instructor for this course
Course Syllabus
  Introduction to Financial Statement Analysis Using Ratios2:52
  Common Size and Base Year Analysis19:43
  REVIEW QUESTIONS: Common Size and Base Year Analysis quiz
  Liquidity Ratios18:58
  REVIEW QUESTIONS: Liquidity Ratios quiz
  Solvency Ratios - Capital Structure22:47
  Solvency Ratios - Earnings Coverage15:00
  REVIEW QUESTIONS: Solvency Ratios - Earnings Coverage quiz
  Leverage Ratios16:10
  REVIEW QUESTIONS: Leverage Ratios quiz
  Activity Ratios - Receivables and Inventory20:16
  REVIEW QUESTIONS: Activity Ratios - Accounts Receivable and Inventoryquiz
  Activity Ratios - Other Balance Sheet Accounts10:14
  REVIEW QUESTIONS: Activity Ratios - Other Balance Sheet quiz
  Profit and Return Ratios14:52
  REVIEW QUESTIONS: Profit and Return Ratios quiz
  Market Ratios - Values Per Share20:11
  REVIEW QUESTIONS: Market Ratios - Values Per Share quiz
  Market Ratios - Earnings and Dividends17:35
  REVIEW QUESTIONS: Market Ratios - Earnings and Dividends quiz
Continuous Play
  Financial Statement Analysis Using Ratios2:58:48
Supporting Materials
  Slides: Course OverviewPDF
  Slides: Common Size and Base Year AnalysisPDF
  Slides: Liquidity RatiosPDF
  Slides: Solvency Ratios: Capital StructurePDF
  Slides: Solvency Ratios: Earnings CoveragePDF
  Slides: Leverage RatiosPDF
  Slides: Activity Ratios: Receivables and Inventory PDF
  Slides: Activity Ratios: Other Balance Sheet AccountsPDF
  Slides: Profit and Return RatiosPDF
  Slides: Market Ratios: Values Per SharePDF
  Slides: Market Ratios: Earnings and DividendsPDF
  Slides: NikePDF
  Financial Statement Analysis Using Ratios Glossary/IndexPDF
Review And Test