This is part three of a four part Back to Basics in Corporate Finance series. There are many ratios used to measure and diagnose strengths and weaknesses in a business. During this module, you have the opportunity to dive into these ratios using Apple, Inc. financial statements. Bankers and investors use ratios to decide if a company is a good investment, and determine if its stock is a buy or a sell. Ratios are also important because they give a holistic picture of how your business is being managed, and can be a useful tool when looking at trends between companies in the same industry.
The good thing about the math used in finance is that it is mostly adding and subtracting, multiplying and dividing; with these ratios we’ll get a bit more sophisticated by multiplying and dividing.
As with our other modules, enjoy colorful stories about real world companies, and their experiences with using ratios to their benefit or detriment. Hear about the infamous “Chainsaw Al”, dubbed the turnaround king, whose fall from grace came when he was exposed by the DSO ratio. The story of "Chainsaw Al" is just another example of what the numbers are telling us.
Course Series
This course is included in the following series:
4 CoursesFinancial Intelligence
- Module One in Financial Intelligence: The Income Statement – Back to Basics Series
- Module Two in Financial Intelligence: The Balance Sheet and Cash Flow Statements – Back to Basics Series
- Module Three in Financial Intelligence: The 4 Financial Ratio Classifications – Back to Basics Series
- Module Four in Financial Intelligence: Cash vs. Profit and Working Capital Strategies – Back to Basics Series
7 CoursesFinance for Non-Finance Professionals
- Accounting 101: How To Do Basic Accounting In One Hour
- Accounting Review: The Basics of Debits and Credits
- Accounting Review: Overview of Financial Statements; P&L, Balance Sheet, and Cash Flow
- Learn Finance Principles in 1 Hour
- Enterprise Risk Management 101
- Module Three in Financial Intelligence: The 4 Financial Ratio Classifications – Back to Basics Series
- Module Four in Financial Intelligence: Cash vs. Profit and Working Capital Strategies – Back to Basics Series
Learning Objectives
- Identify the four classifications of ratios
- Discover the stories the financial statements are telling us
- Explore the ratios to see your company’s trends
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Prerequisites
No Advanced Preparation or Prerequisites are needed for this course. However, it is recommended to take the other courses in the series prior to completing this one.