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In this course, we will learn how to use basic analysis tools (called ratios) to conduct a fundamental analysis of a company's financial statements. This analysis will provide insights into a company's performance and will help identify areas of concern.

We will introduce you to some of the more common financial ratios and their uses.  We will also introduce you to the DuPont framework, which is one useful way to structure the analysis of financial ratios. Finally, we will explain the use of common-size financial statements, which are easy to prepare, easy to use, and should be the first step in any comprehensive financial statement analysis. 

Keep in mind that this is merely an introduction to financial statement analysis — there are entire textbooks devoted to this topic. Our objective is simply to expose you to some of the basic tools to help you start to understand what financial statements can tell us about the operations of a business.

Learning Objectives

  • Explore the purpose of financial statement analysis. 
  • Recognize how to use common-size financial statements to compare financial statements across years and between companies. 
  • Explore the DuPont framework and how return on equity can be broken out into profitability, efficiency, and leverage components. 
  • Explore how to use cash flow information to evaluate cash flow ratios.
Last updated/reviewed: November 20, 2019

35 Reviews (153 ratings)Reviews

5
Anonymous Author
Mr. Kay gave me a full picture of doing financial ratio analysis. He explained all kinds of financial ratios in different perspective,which helped me to enhance my comprehensive ability in work! Thanks for his great work!
5
Anonymous Author
Excellent course. Professor Stice elicits passion and understanding of financial statement analysis. The course is very well organized, paced, and presented. I'm excited to participate in his other courses.
5
Member's Profile
Excellent coverage of this topic. The examples and illustrations complemented the lecture well. Easy to follow and understand. Would like to see more courses from this lecturer.
5
Member's Profile
The presenter was well spoken, he presented the information quickly but with the right type of comparisons and examples. One of the best presentations I've viewed recently.
4
Member's Profile
The instructor made a dry subject interesting and informative. Suggest adding sample review questions after each major topic to reinforce learning.
5
Member's Profile
Mr.Stice has an energized and passionate presentation style that held my attention. Learned new material beyond the usual ratios. Thanks.
4
Anonymous Author
Ratios were well defined & thoroughly explained. Might have been nice to have some exercises in calculating them included in the training.
5
Member's Profile
This is a clear and concise course giving an introduction to the uses and calculations of financial statements using ratio analysis.
5
Member's Profile
Great instructor! Very knowledgeable and did more than just talk about how to calculate the ratios. He also focused on the "why"
4
Anonymous Author
The instructor looks at the same information from different perspectives. He is engaging and has fun presenting the material.
5
Anonymous Author
The instructor is passionate about the subject and effectively communicated the concepts presented.
4
Anonymous Author
Very helpful look into reviewing and analyzing financial statements and not just preparing them.
4
Anonymous Author
Really good course on financial ratios and how to use them to analyze financial statements.
5
Member's Profile
insightful as to when , why and how the analysis tools are used - excellent presenter !
5
Member's Profile
This is one of the best courses I have taken. Thanks Mr. Stice, I appreicate you.
5
Member's Profile
best instructor - enjoyed energy and clarity. apprecite examples and explanations
4
Anonymous Author
Really good refresher of several of the more common ratios and their usage.
5
Anonymous Author
Clear concise and made accounting interesting. Really enjoyed this lecture.
3
Member's Profile
Very informative course explaining role of ratios and financial analysis
4
Anonymous Author
A easy to follow explanation of ratios and analysis! Excellent speaker!
5
Anonymous Author
Great course, good review of the basics, good powerpoint materials
5
Member's Profile
Loved the Professor... he is clearly passionate about the subject!
5
Member's Profile
Easy to follow, materials are basic and easy to understand.
5
Member's Profile
This course is very good for understanding Financial Ratios.
5
Member's Profile
Very helpful presentation of financial statement analysis.
5
Member's Profile
Excellent course for ratio analysis, very well presented
5
Anonymous Author
very nice course nice nice nice nice nice nice nice nice
5
Member's Profile
excellent presentation of an otherwise dry course
5
Anonymous Author
Excellent course and very effective presentation
5
Member's Profile
Very good explanations. He kept it interesting.
4
Member's Profile
Good basic course on financial statements.
4
Member's Profile
Good overview of common financial ratios
5
Anonymous Author
Nicely done, concise but thorough.
4
Anonymous Author
nice review course.
5
Member's Profile
Very good course

Prerequisites

Course Complexity: Foundational

No Advanced Preparation or Prerequisites are needed 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 .
Course Syllabus
INTRODUCTION And OVERVIEW
Widely Used Ratios
  12:39Widely Used Financial Ratios
  12:02Widely Used Financial Ratios (Continued)
Common-Size Statements
  9:05Common-Size Financial Statements
  10:49Common-Size Financial Statements (Continued)
DuPont Framework, Analysis, and Ratios
  11:47DuPont Framework
  11:53Additional Analysis
  10:22Efficiency Ratios
  10:21Leverage Ratios
  12:13Cash Flow Ratios
CONCLUSION
  6:54Potential Pitfalls
Continuous Play
  1:57:46The Need for Financial Statement Analysis
SUPPORTING MATERIALS
  PDFSlides: Analyzing Financial Statements
  PDFAnalyzing Financial Statements Glossary/Index
REVIEW and TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM