Guide to Financial Ratios Analysis: A Step by Step Guide to Balance Sheet and Profit and Loss Statement Analysis This guide will walk you step by step through all the essential phases of performing a financial statements ratio analysis.
What is ratio analysis? The Balance Sheet and the Statement of Income are essential, but they are only the starting point for successful financial management. Apply Ratio Analysis to Financial Statements to analyze the success, failure, and progress of your business.
Ratio Analysis enables the you to spot trends in a business and to compare its performance and condition with the average performance of similar businesses in the same industry. To do this compare your ratios with the average of businesses similar to yours and compare your own ratios for several successive years, watching especially for any unfavorable trends that may be starting. Ratio analysis may provide the all-important early warning indications that allow you to solve your business problems before your business is destroyed by them.
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My name is Meir Liraz and I'm the author of this book. According to Dun & Bradstreet, 90% of all business failures analyzed can be traced to poor management. This is backed up by my own experience. In my 31 years as a business coach and consultant to businesses, I've seen practically dozens of business owners fail and go under -- not because they weren't talented or smart enough -- but because they were trying to re-invent the wheel rather than rely on proven, tested methods that work. And that is where this book can help, it will teach you how to avoid the common traps and mistakes and do everything right the first time.
Table of Contents:
2. Current Ratios
3. Quick Ratios
4. Working Capital
5. Leverage Ratio
6. Gross Margin Ratio
7. Net Profit Margin Ratio
8. Inventory Turnover Ratio
9. Accounts Receivable Turnover Ratio
10. Return on Assets Ratio
11. Return on Investment (ROI) Ratio.
12. Understanding Financial Statements: