FINANCIAL RATIOS: How to Analyze Financial Statements

💥Financial Ratios Cheat Sheets → accountingstuff.com/shop
In this short tutorial you'll learn how Financial Ratio Analysis works. We'll break Financial Ratios down into their five main groups:
▪ Profitability Ratios
▪ Liquidity Ratios
▪ Efficiency Ratios
▪ Leverage Ratios
▪ Price Ratios
Then I'll show you how to calculate 25 of the most popular Financial Ratios using the Income Statement and the Balance Sheet. Afterwards, you can jump into my Financial Ratios Playlist to explore each ratio in more detail.
🔴Subscribe for more Accounting Tutorials → geni.us/subtothechannel
⏱️TIMESTAMPS
00:00 - Intro
00:28 - FINANCIAL STATEMENTS
01:16 - WHAT IS FINANCIAL RATIO ANALYSIS?
01:56 - What types of Financial Ratio are there?
- Cheat Sheet Bundle: accountingstuff.com/shop/fina...
02:39 - PROFITABILITY RATIOS
- Cheat Sheet: accountingstuff.com/shop/prof...
03:47 - Gross Profit Margin (GPM)
04:19 - Operating Profit Margin (OPM)
04:40 - Net Profit Margin (NPM)
05:46 - Return on Assets (ROA)
06:49 - Return on Equity (ROE)
07:37 - Return on Capital Employed (ROCE)
08:11 - LIQUIDITY RATIOS
- Cheat Sheet: accountingstuff.com/shop/liqu...
09:10 - Cash Ratio
09:50 - Quick Ratio
10:17 - Current Ratio
10:29 - EFFICIENCY RATIOS
- Cheat Sheet: accountingstuff.com/shop/effi...
11:04 - Inventory Turnover Ratio
11:26 - Receivables Turnover Ratio
11:43 - Asset Turnover Ratio
12:16 - Payables Turnover Ratio
12:40 - Cash Conversion Cycle
13:09 - Days Sales of Inventory
13:43 - Days Sales Outstanding
14:07 - Days Payable Outstanding
14:52 - LEVERAGE RATIOS
- Cheat Sheet: accountingstuff.com/shop/leve...
15:19 - Debt to Assets Ratio (DTA)
15:43 - Debt to Equity Ratio (DTE)
16:39 - Interest Coverage Ratio
17:03 - Debt Service Coverage Ratio (DSCR)
17:56 - PRICE RATIOS
- Cheat Sheet: accountingstuff.com/shop/pric...
18:26 - Earnings Per Share (EPS)
19:27 - Price-To-Earnings Ratio (P/E Ratio)
20:19 - Price/Earnings-To-Growth Ratio (PEG Ratio)
21:17 - Dividends Per Share (DPS)
22:04 - Dividend Yield Ratio
22:30 - Dividend Payout Ratio
22:59 - FINANCIAL RATIOS MIND MAP
🔎FAQ
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#accounting #financialratios #accountingstuff

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mine too!

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got my Intro to fin. accounting final exam on Monday

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Glad to hear you found this one useful!

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[@TuneActive]

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[@angelnicoleorias8199]

thank you so much for this video! i have to memorize around 40 ratios for our midterm exams, and this video helped me tick 26 of them! i love how you grouped the ratios, which made memorizing the formulas a loooot easier, explained what these formulas stand for, their relevance. so happy i came by this vid. it helped me a lot! i've also been sending my classmates this video!

[@AccountingStuff]

No worries, all the best in your midterms!

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This is the most comprehensive, complete and concise video available on financial ratios.....it is my go-to video any time I want to revise my concepts.

[@AccountingStuff]

Thanks, glad you enjoyed it!

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2 years off as an accountant and your videos help me refresh my memory, thank you so much james

[@mohamedgamal9903]

What a great video !! I needed this video since long time and I really wanted to learn this ratios from you .. you got your special way to learn others .. you are really talented ... thanks alot ❤️ I hope you start your costing and budgeting videos that would be great 👌🏻

[@camillaszymanowska1632]

These videos are so helpful. Would love some more on gearing and gearing ratios!

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Really immaculate with your statements. True to the way of accounting stuff. I have to catch up on quite a few videos now!

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James! You won’t believe how happy I am to see you ! I had a terrible day and you changed my mood a lot ! Please, please visit us more often! You are amazing 😀 excellent lessons as always.

[@AccountingStuff]

Thanks Mona, sorry to hear you had a bad day. All the best!

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[@asfandyar374]

This is by far the best video on financial ratios I have EVER seen. Splendid work👏👏👏

[@AccountingStuff]

Thanks!!

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Thank you. My current Business class basically just leaves us to read the chapter and take a test, I couldnt understand until I watched this

[@MrPushupp]

wow wow wow this video was packed full of it, just got done making falsh cards of these all so i can lopok at them on the go and such. Thanks for the video!

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This is good information. Thank you for making it available.

[@montanaHE]

Your video taught me more in 25 min, than my high school did in 4 years.

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Thanks!!! This is a great refresher

[@jolly110383]

This is just AWESOME :) Thank you!

[@Uddhav05]

Great videos and has helped me (a non finance guy) understand the concepts much better now. Is it possible for you to share some references or sources too in description that will help us further?

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This is one of the most useful, crisp video on Fin ratios!

[@AccountingStuff]

Thanks! Glad you enjoyed it :)

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[@accountingstuff7625]

⬆️

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[@AccountingStuff]

No worries, all the best in your new role :)

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Can we share please

[@archanak3340]

Hi James, I recently came across your channel and loved your videos!! Big thank you for making them. Would you please make some videos explaining basic mobth end processes and secondary balance accounting such as BS reclass, funding, cost of carry etc?? Thanks.

[@waibosibili8546]

Thanks for the much needed information ❤

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Hey James! I've been watching these accounting videos of yours from a long time now, and I've been really liking them. I want you to make some videos on the following topics (please as a request). 1. Books of original entry 2. Cashbook 3. Adjusted Cashbook 4. Capital & revenue expenses & incomes 5. Receipts 6. Control accounts 7. Source Documents 8. Errors I am requesting you as I really have understood all the topics only from your videos. P.S: I have my CAIE's so I really want help. Thank you! 0:38

[@accountingstuff7625]

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Very well explain and easy to understand it.

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Thank you very much for creating this fantastic, amazing and formidable video!!!!! Super well explained and organized!!! It is a real treasure! Thanks!!!!

[@AccountingStuff]

You're very welcome!

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VERY USEFUL VIDEO!!!

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[@AccountingStuff]

Great to hear you found it useful!

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Absolutely helpful! Thank you! Please consider making a video on Pro Forma statements 💪🔝🔝

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thank you. you saved my accounting course

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Thank you for this incredibly understandable video that helped me complete a financial analysis project I first found daunting with ease!

[@AccountingStuff]

No problem!

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Nice one 👍

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Brilliant video! Thanks James :)

[@accountingstuff7625]

⬆️

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Very informative. Thanks for sharing.

[@AccountingStuff]

No worries, glad you found it useful :)

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Congrats on passing your assignment!! All the best

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⬆️

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[@AccountingStuff]

Thanks, glad you enjoyed it!

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⬆️✍️

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Omg , I was waiting for this video & your videos are very vivid & easy to understand. Thanks a million for the videos so far. I’m learning & I’m going to apply for jobs ( Assistant accountant, finance intern & accounts payable)

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Best of luck in your job hunt!

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This is beautiful and simple and wonderful and so well delivered

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Cheers David!!

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Great to hear you found it useful :)

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Thanks, glad you enjoyed it

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Thanks, glad you enjoyed it!

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Amazing how you simplified Ratios in just 25 minutes

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Hi James, I love your videos, they help me so much!. Please can you make some videos about auditing.?

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Good Morning James, Thanks for doing this video.

[@AccountingStuff]

You are welcome

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You're most welcome :)

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Cheers Mohamed!

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[@AccountingStuff]

No worries, glad I could help :)

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You're very welcome :)

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Thanks!

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Hi James, I learned so many things from your videos. Thank you! Could you please explain budget and types of budget?

[@accountingstuff7625]

⬆️✍️

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My pleasure!

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Thank you!

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[@AccountingStuff]

No problem, happy to help :)

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That's great to hear thanks!

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[@AccountingStuff]

You're very welcome :)

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[@AccountingStuff]

No problem! Glad you enjoyed it :)

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Best of luck!

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A topic on intercompany accounting and related party transactions would be really nice

[@accountingstuff7625]

⬆️✍️

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THANK YOU!!

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Amazing lesson!

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Glad you enjoyed it :)

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⬆️✍️

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Congrats!! That's fantastic to hear. Well done :)

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Wait wat?? Im just passing through videos and im still in high school. So im a bit confused

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@@anonymousefitz8736 Culinary has 9 courses, so Accounting was one which was abit hard for me

[@AccountingStuff]

As Ashley Qin & Khalil Al Soubirh have kindly pointed out... the Cash Conversion Cycle is 'CCC = DSI + DSO - DPO', not 'CCC = DSI + DSO + DPO'. My apologies for this typo! What would you like to see next?? ⏱TIMESTAMPS 00:00 - Intro 00:28 - FINANCIAL STATEMENTS 01:16 - WHAT IS FINANCIAL RATIO ANALYSIS? 01:56 - What types of Financial Ratio are there? 02:39 - PROFITABILITY RATIOS 03:47 - Gross Profit Margin (GPM) 04:19 - Operating Profit Margin (OPM) 04:40 - Net Profit Margin (NPM) 05:46 - Return on Assets (ROA) 06:49 - Return on Equity (ROE) 07:37 - Return on Capital Employed (ROCE) 08:11 - LIQUIDITY RATIOS 09:10 - Cash Ratio 09:50 - Quick Ratio 10:17 - Current Ratio 10:29 - EFFICIENCY RATIOS 11:04 - Inventory Turnover Ratio 11:26 - Receivables Turnover Ratio 11:43 - Asset Turnover Ratio 12:16 - Payables Turnover Ratio 12:40 - Cash Conversion Cycle 13:09 - Days Sales of Inventory 13:43 - Days Sales Outstanding 14:07 - Days Payable Outstanding 14:52 - LEVERAGE RATIOS 15:19 - Debt to Assets Ratio (DTA) 15:43 - Debt to Equity Ratio (DTE) 16:39 - Interest Coverage Ratio 17:03 - Debt Service Coverage Ratio (DSCR) 17:56 - PRICE RATIOS 18:26 - Earnings Per Share (EPS) 19:27 - Price-To-Earnings Ratio (P/E Ratio) 20:19 - Price/Earnings-To-Growth Ratio (PEG Ratio) 21:17 - Dividends Per Share (DPS) 22:04 - Dividend Yield Ratio 22:30 - Dividend Payout Ratio 22:59 - FINANCIAL RATIOS MIND MAP

[@fayazrahman2099]

Can we have a video more on bonds and shares within accounting please and anything else related to that area as I find that as my weakest link to accounting

[@mohamedgamal9903]

I hope you start your costing and budgeting videos that would be great 👌🏻 ... and thanks alot for this great and informative video and as always you are really great and talented person ❤️

[@samburdge9948]

I say start from the beginning again….maybe how the whole process starts……invoiced et cetera…..maybe reupload some of your more successful videos…….gods bless

[@monah2030]

Can you please make some videos for payroll from scratch? Unlimited thanks 😊

[@archanak3340]

Hi James, I recently came across your channel and loved your videos!! Big thank you for making them. Would you please make some videos explaining basic secondary balance accounting such as BS reclass, funding, cost of carry etc??

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This is gold for a student

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Simply outstanding.

[@AccountingStuff]

Thanks!

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Thank you ...very informative

[@AccountingStuff]

Glad it was helpful!

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Great topic, thank you sir

[@AccountingStuff]

Glad you enjoyed it :)

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[@AccountingStuff]

Love it! Best of luck in your next class :)

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Hi james thanks for this knowledge

[@accountingstuff7625]

👆✍️

[@ashleyqin7157]

Thanks for the amazing organized contents. While CCC= DSI+DSO- DPO, instead of plus all three of them...

[@AccountingStuff]

You are correct! Sorry for the typo. I'll pin a comment to show this correction

[@sepideabbasi8361]

Thanks for telling. I had the same problem.

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Nailed it..big up

[@accountingstuff7625]

👆

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This is an awesome video!!!!

[@AccountingStuff]

Thanks :)

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[@accountingstuff7625]

⬆️