Using Ratio Analysis to Evaluate Financial Performance

A company's financial performance, and its ability to grow and thrive over time, can be assessed through ratio analysis, the basic evaluation tool for asset management, solvency and profitability. Whether you are managing the financial performance of a department, unit, or the organization as a whole, working with these ratios can help identify opportunities and allow you to make adjustments to improve performance. Understand the structure of the three principal financial statements: the income statement, the balance sheet, and the cash flow statement, and interpret the information found in these statements Identify online sources of financial information that can be used to conduct research on other publicly traded firms and industries As you become familiar with asset management ratios such as days sales outstanding and days to turnover, you will be able to apply these techniques in comparing your company's performance against others in the industry and against its own financial history. The ratio analysis tools you learn will help your organization to design and implement initiatives for increased productivity and profitability. The course Understanding Financial Statements is required to be completed prior to starting this course.