Session 6: Financial Ratios

In this session, I look at the financial ratios, where we scale numbers to a common denominator to make them comparable across companies, across time and to benchmarks. I start with profit margins, drawing distinctions between different margin measures and the information in each one. I then examine accounting returns on equity and invested capital, and the measurement issues with each. In the third section, I examine how efficiency ratios can be used to measure how painlessly companies can scale up. In the final sections, I look at debt scaled to capital and to cash flows (EBITDA) and I end with an assessment of coverage and liquidity ratios.
Slides: www.stern.nyu.edu/~adamodar/pd...
Post class test: www.stern.nyu.edu/~adamodar/pd...
Post class test solution: www.stern.nyu.edu/~adamodar/pd...

[@ankitkumarmishra495]

OMG, this channel is criminally undersubscribed and underseen.

[@farahinvestimentos8659]

yes lol

[@Shauracool123]

He is a leading figure in valuation in the world. Investment banks across the world use his data, table and models. IIMs use his data for research. CNBC, Bloomberg invites him regularly on their show. And he is profesor NYU. I dont think the youtube subscriber list is really his concern.

[@ankitkumarmishra495]

@@Shauracool123 neither did I say that youtube subscribers are true scale for someone's talent or anything associated to it. My comment was a simple point- this channel is criminally undersubscribed- which has nothing to do with less/more subscribers and is a simple thought- about how come somw silly dumb tiktokers have channels with millions of subscribers, thousands of likes etc etc but not someone with such a huge stature like himself.

[@Shauracool123]

@@ankitkumarmishra495 Lol, it's like saying why Kylie Jenner has more followers than Elon Musk

[@ankitkumarmishra495]

@@Shauracool123 no sir.. there's no sense in what you're saying.. now let me bring it to your level of intellect.. in easy and simple english words, what I tried to say is- this channel deserves way more subscribers than it has.. nothing more than that, nothing less than that.. try to understand it if you've enough comprehending skill.. if not, god bless you and this is my last message.. please feel free to waste your time on this reply.. my time ain't worth spending on replies for you.. god bye :)

[@mattfavaloro350]

Professor I started learning from you less than a week ago I've seen maybe 30 to 40 videos of yours I have no formal education I was a cement finisher by trade I was really hurt career-ending injury 10 years ago I first series of unfortunate events has been in isolation almost for 10 years I took that time to educate myself everyday can I have some questions he might be good you may already be doing them but just like the Monk and isolation I see things differently and I think I have ways to put help your valuation process I don't know how you would get to it but I have ideas if you would like to hear them just let me know where it would be my pleasure to repay for the greatest gift in the world you gave me unconditional knowledge is the greatest gift anybody can receive there is no other unconditional knowledge greatest gift the world has ever known

[@kodokraksasa6564]

No offense, but I think learning basic punctuation will be a lot more time efficient for you than finance for now.

[@maddysydney]

One of the best explanations of these ratios!

[@GiuseppeVerarditrading]

Prof. Aswath, I cannot thank you enough. When I see your videos, I come back to my 20s and to those professors (very few, indeed) who captured my attention and my interest with both their profound knowledge and the passion they put into teaching. You are too good to be true.

[@raid9535]

I needed a refresher course to take my IIBV exam. Thank you for making it much easier with these course series

[@raid9535]

I can't say thank you enough for giving these simple lessons

[@rosalyn1118]

Thank you, Professor! As a certified accountant I learnt more from you than I did with my accounting degree and qualification.

[@leonardjulius6098]

Pretty sure that is something he absolutely does NOT want to hear

[@Viper4ever05]

Like going back to college without the crippling debt.

[@InvestorCenter]

These videos are awesome!

[@harishganesan622]

We must thank you for such a brilliant piece of lecture .

[@aboyinfinland9230]

Pity I can never have the opportunity to greet you in person. You are such a great. Thank you so so much Professor for all this material.

[@chrisschill9222]

Great content. Many thanks professor!

[@tiananicholetallant]

this is seriously gold

[@quant-trader-010]

This is gold!

[@maroofahmadmir9868]

Dear Sir It is pleasure to watch your video's. It would have been very difficult to attend your session had not you created this channel , many thanks sir.

[@royb9113]

Thanks for the knowledge.

[@nevilleedwards3237]

Great refresher

[@ull893]

Pure Gold

[@humichael7228]

Splendid!

[@JrJ2016]

Sir, For debt to equity ratios would you recommend market value or book value given my objective is to pessimistically evaluate a company as a Banker dishing out loan? Shall i choose the worse of the two Or how else should one think about it ?

[@ethank5681]

Wish you had these videos when I was studying your books in uni LOL

[@dolevmazker736]

thank you sir

[@antronero5970]

Wowowowowowow

[@SuperEvo1990]

wait he talked about ZOOM. I thought this video was 2 3 years but it's sep...