What is Ratio Analysis in Finance?
Ratio analysis is the quantitative interpretation of the company’s financial performance. It provides valuable information about the organization’s profitability, solvency, operational efficiency and liquidity positions as represented by the financial statements.
This is the most comprehensive guide to Ratio Analysis / Financial Statement Analysis.
This expert-written guide goes beyond the usual gibberish and explores practical Financial Statement Analysis as used by Investment BankersInvestment BankersInvestment banking is a specialized banking stream that facilitates the business entities, government and other organizations in generating capital through debts and equity, reorganization, mergers and acquisition, etc.read more and Equity Research Analysts.Equity Research Analysts.Equity Research refers to the study of a business, i.e., analyzing a company's financials, performing Ratio Analysis, Financial forecasting in Excel (Financial Modeling), & exploring scenarios to make insightful BUY/HOLD/SELL stock investment recommendations. Moreover, the Equity Research Analysts discuss their findings & details in the Equity Research Reports. read more
Here I have taken Colgate Case Study (2016 to 2020 financials) and calculated Ratios in excel from scratch.
Please note that this Ratio Analysis of the financial statement guide is over 9000 words and took me 4 weeks to complete. To save this page for future reference and don’t forget to share it :-)
Step 1 – Download the Colgate Excel Model Ratio Analysis Template. You will be using this template for the analysis
Step 2 – Please note you will get two templates – 1) Unsolved Colgate Model 2) Solved Colgate Model
Step 3- You should start with the Unsolved Colgate Model Template. Follow the step-by-step Ratio Analysis calculation instructions for analysis.
Step 4 – Happy Learning! :-)
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Table of Contents
I have made easy navigation for you to learn Ratio Analysis Types.
- #1 – Vertical Analysis or Common Size Statements
- #2 – Horizontal Analysis
- #3 – Trend Analysis
- Ratio Analysis Framework
- Liquidity Ratio
- Solvency Ratio
- Turnover Ratios
- Operating Performance
- Operating Efficiency
- Operating Profitability
- Risk Analysis
- Business Risk
- Financial Risk
- External Liquidity Risk
- Growth Analysis
Let us look at each one of them one by one.
Framework for Ratio Analysis
Ratio analysis of financial statements is another tool that helps identify changes in a company’s financial situation. A single ratio is not sufficient to adequately judge the financial situation of the company. Several ratios must be analyzed together and compared with prior-year ratios, or even with other companies in the same industry. This comparative aspect of the analysis is extremely important in financial analysis. It is important to note that ratios are parameters and not precise or absolute measurements. Thus, ratios must be interpreted cautiously to avoid erroneous conclusions. An analyst should attempt to get behind the numbers, place them in their proper perspective, and, if necessary, ask the right questions for further types of ratio analysis.
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#1 – Vertical Analysis
What is Vertical Analysis?
Vertical analysis is a technique used to identify where a company has applied its resources and in what proportions those resources are distributed among the various balance sheets and income statement accounts. The analysis determines the relative weight of each account and its share in asset resources or revenue generation
Vertical Analysis – Income Statement
- On the income statement, vertical analysis is a universal tool for measuring the firm’s relative performance from year to year in terms of cost and profitability.
- It should always be included as part of any financial analysis. Here, percentages are computed in relation to Sales, which are considered to be 100%.
- This vertical analysis effort in the income statement is often referred to as margin analysis since it yields different margins in relation to sales.
- It also helps us do the time series analysis ( how the margins have increased/decreased over the years) and also helps in cross-sectional analysis with other comparable companies in the industry.
Colgate Case Study
- For each year, Income Statement line items are divided by their respective year’s Top Line (Net SalesNet SalesNet sales is the revenue earned by a company from the sale of its goods or services, and it is calculated by deducting returns, allowances, and other discounts from the company's gross sales.read more) number.
- For example, for Gross ProfitGross ProfitGross Profit shows the earnings of the business entity from its core business activity i.e. the profit of the company that is arrived after deducting all the direct expenses like raw material cost, labor cost, etc. from the direct income generated from the sale of its goods and services.read more, it is Gross Profit / Net Sales. Likewise for other numbers
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What can we interpret with Vertical Analysis of Colgate?
- Vertical Ratio Analysis helps us with analyzing historical trends.
- Please note that from vertical analysisVertical AnalysisVertical analysis is a kind of financial statement analysis wherein each item in the financial statement is shown in percentage of the base figure. The formula is: (Statement line item / Total base figure) X 100read more, we only get to the point of asking the right questions (identification of problems). However, we do not get answers to our questions here.
- In Colgate, we note that the gross profit marginProfit MarginProfit Margin is a metric that the management, financial analysts, & investors use to measure the profitability of a business relative to its sales. It is determined as the ratio of Generated Profit Amount to the Generated Revenue Amount. read more (Gross Profit / Net Sales) has been in the range of 59.4% to 60.8%. Why almost constant?
- We also note that the Selling General and administrative expensesSelling General And Administrative ExpensesSelling, general and administrative (SG&A) expense includes all the expenses incurred in the selling of the products of the company whether direct or indirect along with the entire general and the administrative expenses during an accounting period under consideration such as advertisement expenses, sales promotion expenses, marketing salaries, etc.read more (SG&A) have increased from 33.8.1% in 2016 to 36.5% in the year ending 2020. Why?
- Also, note that the operating income dropped significantly in 2019. Why?
- Net income increased to less than 16.4%. Why?
- Also, effective tax ratesEffective Tax RatesEffective tax rate determines the average taxation rate for a corporation or an individual. For both, there is a similar formula only with variation in considering variables. The effective tax rate formula for corporation = Total tax expense / EBTread more are decreasing over the years (from 30.8% in 2016 to 21.6% in 2020). Why?
Ratio Analysis – Explained in Video
Vertical Analysis – Balance Sheet
- Vertical Analysis of the Balance Sheet normalizes the Balance Sheet and expresses each item in the percentage of total assets/liabilities.
- It helps us to understand how each item of the balance sheetThe Balance SheetA balance sheet is one of the financial statements of a company that presents the shareholders' equity, liabilities, and assets of the company at a specific point in time. It is based on the accounting equation that states that the sum of the total liabilities and the owner's capital equals the total assets of the company.read more has moved over the years. For, eg. Did the debt increase or decrease?
- It also helps in the cross-sectional analysis (comparing the balance sheet strength with other comparable companies)
Colgate Case Study
- For each year, Balance Sheet line items are divided by their respective year’s Top Assets (or Total Liabilities) number.
- For example, for Accounts Receivables, we calculate as Receivables / Total Assets. Likewise for other balance sheet items
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Interpretation of Colgate’s Vertical Analysis
- Cash and Cash equivalents decreased from 10.8% in 2016 and currently stand at 5.6% of the total assets. Why is it reducing?
- Receivables decreased from 11.5% in 2016 to 7.9% in 2020. Does this mean stricter credit policy terms?
- What is included in “other current assets”? It remains stable within 3.2% to 3.6% of the total assets.
- What is included in other assets? Why it is increasing?
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- On the liabilities side, there can be many observations we can highlight. Accounts payable decreased continuously over the few years and currently stands at 8.8% of the total assets.
- Why Long Term Debt as a percentage of liabilities is decreasing over the years. For this, we need to investigate this in the 10K.
- Non controlling interests have remained in the range of 2.1% to 2.9%
#2 – Horizontal Analysis
What is Horizontal Analysis?
Horizontal analysisHorizontal AnalysisHorizontal analysis interprets the change in financial statements over two or more accounting periods based on the historical data. It denotes the percentage change in the same line item of the next accounting period compared to the value of the baseline accounting period.read more is a technique used to evaluate trends over time by computing percentage increases or decreases relative to a base year. It provides an analytical link between accounts calculated at different dates using the currency with different purchasing powers. In effect, this analysis indexes the accounts and compares the evolution of these over time.
As with the vertical analysis methodology, issues will surface that need to be investigated and complemented with other financial analysis techniques. The focus is to look for symptoms of problems that can be diagnosed using additional techniques. Let’s look at an example.
Colgate Case Study
We calculate the growth rate of each of the line items with respect to the previous year.
For example, to find the growth rate of Net Sales of 2020, the formula is (Net Sales 2020 – Net Sales 2019) / Net Sales 2019
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What can we interpret with Horizontal Analysis of Colgate Palmolive?
- In 2020, Colgate’s new sales growth increased by 5%. Why?
- The Cost of Sales growth, however, has decreased (positive from the company’s point of view). Why is this so?
- Net Income growth increased in 2020. Why?
#3 – Trend Analysis
What is Trend Analysis?
Trend Analysis compares the overall growth of key financial statement line items over the years from the base case.
Colgate Case Study
For example, in the case of Colgate, we assume that 2016 is the base case and analyze the performance in Sales and Net profit over the years.
- We note that Sales have increased by only 8.4% over a period of 4 years (2016-2020).
- We also note that the overall net profit has increased by 10.4% over the 4 year period.
Solvency Ratio Analysis
Solvency RatioSolvency RatioSolvency Ratios are the ratios which are calculated to judge the financial position of the organization from a long-term solvency point of view. These ratios measure the firm’s ability to satisfy its long-term obligations and are closely tracked by investors to understand and appreciate the ability of the business to meet its long-term liabilities and help them in decision making for long-term investment of their funds in the business.read more Analysis type is primarily sub-categorized into two parts – Liquidity Analysis and Turnover Analysis of financial statement. They are further sub-divided into 10 ratios, as seen in the diagram below.
We will discuss each subcategory one by one.
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Liquidity ratio analysis measure how liquid the company’s assets are (how easily can the assets be converted into cash) as compared to its current liabilities. There are three common liquidity ratio
- Current analysis
- Acid test (or quick assetQuick AssetQuick Assets are assets that are liquid in nature and can be converted into cash easily by liquidating them in the market. Fixed deposits, liquid funds, marketable securities, bank balances, and so on are examples.read more) ratio
- Cash Ratio
#4 – Current Ratio
What is the Current Ratio?
The current ratioCurrent RatioThe current ratio is a liquidity ratio that measures how efficiently a company can repay it' short-term loans within a year. Current ratio = current assets/current liabilities read more is the most frequently used ratio to measure the company’s liquidity as it is a quick, intuitive, and easy measure to understand the relationship between the current assets and current liabilities. It basically answers this question “How many dollars in current assets does the company have to cover each $ of current liabilities.”
Formula
Example
Let us take a simple Current Ratio Calculation example,
- Current Assets = $200 Current Liabilities = $100
- Current Ratio = $200 / $100 = 2.0x
This implies that the company has two dollars of current assets for every one dollar of current liabilities.
Analyst Interpretation
- The current ratio provides us with a rough estimate of whether the company would be able to “survive” for one year or not. If Current Assets are greater than Current Liabilities, we interpret that the company can liquidate its current assets and pay off its current liabilities and survive at least for one operating cycleOperating CycleThe operating cycle of a company, also known as the cash cycle, is an activity ratio that measures the average time required to convert the company's inventories into cash.read more.
- The current Ratio in itself does not provide us with full details of the quality of current assets and whether they are fully realizable.
- If the current assets consist primarily of receivables, we should investigate the collectability of such receivables.
- If current assets consist of large Inventories, then we should be mindful of the fact that inventories will take longer to convert into cash as they cannot be readily sold. Inventories are much less liquid assets than receivables.
- The average maturities of current assets and current liabilities should also be looked into. If current liabilities mature in the next one month, then-current assets providing liquidity in 180 days may not be of much use.
Colgate Case Study
Let us now calculate the Current Ratios for Colgate.
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- Colgate’s current ratio has deteriorated over the past 5 years. Its current ratio of 2020 was at 0.99x
- This implies that Colgate’s current assets are almost equal to its current liabilities.
- We will still need to investigate the quality and liquidity of Current Assets. We note that around 45% of current assets in 2020 consists of Inventories and Other Current Assets. This may affect the liquidity position of Colgate.
- When investigating Colgate’s inventory, we note that the majority of the Inventory consists of Finished Goods (which is better in liquidity than raw materials supplies and work-in-progress).
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source: Colgate 2020 10K Report, Pg – 125
#5 – Quick Ratio Analysis
What is a Quick Ratio?
Sometimes current assets may contain huge amounts of inventory, prepaid expensesPrepaid ExpensesPrepaid expenses refer to advance payments made by a firm whose benefits are acquired in the future. Payment for the goods is made in the current accounting period, but the delivery is received in the upcoming accounting period.read more, etc. This may skew the current ratio interpretations as these are not very liquid. To address this issue, if we consider the only most liquid assets like Cash and Cash equivalentsCash And Cash EquivalentsCash and Cash Equivalents are assets that are short-term and highly liquid investments that can be readily converted into cash and have a low risk of price fluctuation. Cash and paper money, US Treasury bills, undeposited receipts, and Money Market funds are its examples. They are normally found as a line item on the top of the balance sheet asset. read more and Receivables, then it should provide us with a better picture of the coverage of short-term obligations. This ratio is known as the Quick Ratio or the Acid Test.
The rule of thumb for a healthy acid test index is 1.0.
Formula
Example
Let us take a simple Quick Ratio Calculation example,
- Cash and Cash Equivalents = $100
- Accounts Receivables = $500
- Current Liabilities = $1000
Then Quick Ratio = ($100 + $500) / $1000 = 0.6x
Analyst Interpretation
- Accounts Receivables are more liquid than inventories.
- This is because Receivables directly convert into cash after the credit period; however, Inventories are first converted to Receivables, which in turn take further time to convert into cash.
- In addition, there can be uncertainty related to the true value of the inventory realized as some of it may become obsolete, prices may change, or it may become damaged.
- It should be noted that a low quick ratio may not always mean liquidity issues for the company. You may find low quick ratios in businesses that sell on a cash basis (for example, restaurants, supermarkets, etc.). In these businesses, there are no receivables; however, there may be a huge pile of inventory.
Colgate Case Study
Let us now look at the Quick Ratio InterpretationQuick Ratio InterpretationThe quick ratio, also known as the acid test ratio, measures the ability of the company to repay the short-term debts with the help of the most liquid assets. It is calculated by adding total cash and equivalents, accounts receivable, and the marketable investments of the company, then dividing it by its total current liabilities.read more in Colgate.
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The Quick Ratio of Colgate is also decreasing (similar to the current ratio). This acid test shows us the company’s ability to pay off short-term liabilities using Receivables and Cash & Cash Equivalents.
#6 – Cash Ratio analysis
What is the Cash Ratio?
The Cash Coverage ratioCash Coverage RatioCash Ratio is calculated by dividing the total cash and the cash equivalents of the company by total current liabilities. It indicates how quickly a business can pay off its short term liabilities using the non-current assets.read more considers only the Cash and Cash Equivalents (there are the most liquid assets within the Current Assets). If the company has a higher cash ratio, it is more likely to be able to pay its short-term liabilities.
Formula
Example
Let us take a simple Cash Ratio Calculation example,
- Cash and Cash Equivalents = $500
- Current Liabilities = $1000
Then Quick Ratio = $500 / $1000 = 0.5x
Analyst Interpretation
- All three ratios – Current Ratios, Quick Ratios, and Cash Ratios should be looked at for understanding the complete picture of the Company’s liquidity position.
- The cash Ratio is the ultimate liquidity test. If this number is large, we can obviously assume that the company has enough cash in its bank to pay off its short-term liabilities.
Colgate Case Study
Let us calculate Cash Ratios in Colgate.
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Colgate’s cash ratio has decreased from 0.45x in 2017 to 0.20x in 2020.
Turnover Ratios
We saw from the above three liquidity ratios (Current, Quick, and Cash Ratios) that it answers the question, “Whether the company has enough liquid assets to square off its current liabilities.” So this ratio is all about the $ amounts.
However, when we look at Turnover ratio analysis, we try to analyze the liquidity from “how long it will take for the firm to convert inventory and receivables into cash or time is taken to pay its suppliers.”
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The commonly used turnover ratios include:
- Receivables turnover
- Accounts receivables days
- Inventory turnover
- Inventory days
- Payables turnover
- Payable days
- Cash Conversion Cycle
#7 – Receivables Turnover Ratio analysis
What is Receivables Turnover Ratio analysis?
Accounts ReceivablesAccounts ReceivablesAccounts receivables is the money owed to a business by clients for which the business has given services or delivered a product but has not yet collected payment. They are categorized as current assets on the balance sheet as the payments expected within a year. read more Turnover Ratio can be calculated by dividing Credit Sales by Accounts Receivables. Intuitively. It provides us the number of times Accounts Receivables (Credit Sales) is converted into Cash Sales
Formula
Accounts Receivables can be calculated for the full year or for a specific quarter. For calculating accounts receivables for a quarter, one should take annualized sales in the numerator.
Example
Let us take a simple Receivables Turnover Calculation example,
- Sales = $1000
- Credit given is 80%
- Accounts Receivables = $200
- Credit Sales = 80% of $1000 = $800
Accounts Receivables Turnover = $800 / $200 = 4.0x
Analyst Interpretation
- Please note that Total Sales include Cash Sales + Credit Sales. Only Credit SalesCredit SalesCredit Sales is a transaction type in which the customers/buyers are allowed to pay up for the bought item later on instead of paying at the exact time of purchase. It gives them the required time to collect money & make the payment. read more convert to Accounts Receivables; hence, we should only take Credit Sales.
- If a company sells most of its items on a Cash Basis, then there will be No Credit Sales.
- Credit Sales figures may not be directly available in the annual report. You may have to dig into the Management discussion and analysis to understand this number.
- If it is still hard to find the percentage of credit sales, then do have a look at conference calls where analysts question the management on relevant business variables. Sometimes it is not available at all.
Colgate Case Study
- To calculate the receivables turnover, we have considered the average receivables. We consider the “average” figures as these are balance sheet items.
- For, e.g., as shown in the image below, we took the average receivables of 2019 and 2020.
- Also, please note that I have taken the assumption that 100% of Colgate’s Sales were “Credit Sales.”
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- We note that the Receivables Turnover was above 10x in 2016-2020. In 2020, it was at 12.18x
- Higher Receivables Turnover implies a higher frequency of converting receivables into cash (this is good!)
#8 – Days Receivables
What are Days Receivables?
Days receivables are directly linked with the Accounts Receivables Turnover. Days receivables express the same information but in terms of the number of days in a year. This provides an intuitive measure of Receivables Collection Days.
Formula
Accounts Receivables Days Formula = Number of Days in Year / Accounts Receivables Turnover
You may calculate Account Receivable days based on the year-end balance sheet numbers.
Many analysts, however, prefer to use the average balance sheet receivables number to calculate the average collection periodCalculate The Average Collection PeriodThe average collection period is the duration of time a company requires to collect all the payments dues on their clients as Accounts receivables. Average collection period = 365/Accounts Receivable turnover ratio. Alternative formula, Average collection period = Average accounts receivable per day/average credit sales per day
read more. (a right way is to use the average balance sheet)
Let us take the previous example and find out the Days Receivables.
Example
Let us take a simple Days Receivables Calculation example,
- Accounts Receivables Turnover = 4.0x
- Number of days in a year = 365
Days Receivables = 365 / 4.0x = 91.25 days ~ 91 days
This implies that it takes 91 days for the company to convert Receivables into Cash.
Analyst Interpretation
- The number of days taken by most analysts is 365; however, some analysts also use 360 as the number of days in the year. This is normally done to simplify the calculations.
- Accounts receivable days should be compared with the average credit period offered by the company. For example, in the above case, if the Credit Period offered by the company is 120 days and they are receiving cash in just 91 days, this implies that the company is doing well to collect its receivables.
- However, if the credit periodCredit PeriodCredit period refers to the duration of time that a seller gives the buyer to pay off the amount of the product that he or she purchased from the seller. It consists of three components - credit analysis, credit/sales terms and collection policy.read more offered is said 60 days, then you may find a significant amount of previous accounts receivables on the balance sheet, which obviously is not good from the company’s point of view.
Colgate Case Study
- Let’s calculate Days Receivables for Colgate. To calculate Days Receivables, we have taken 365 days’ assumption.
- Since we had already calculated the receivables turnover above, we can easily calculate the day’s receivables now.
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Days receivables or Average Receivables collection days have decreased from around 34.1 days in 2017 to 30 days in 2020.
- This means that Colgate is doing a better job of collecting its receivables. They may have started implementing a stricter credit policy.
#9 – Inventory Turnover Ratio analysis
What is Inventory Turnover Ratio analysis?
The Inventory RatioInventory RatioInventory ratio or inventory turnover ratio is an activity ratio that depicts the frequency of replacing the stocks sold by the company in a certain period. It is evaluated as the proportion of the cost of goods sold to the average inventory.read more means how many times the inventories are restored during the year. It can be calculated by taking the Cost of Goods Sold and dividing it by Inventory.
Formula
Inventory Turnover Formula = Cost of Goods Sold / Inventory.
Let us take a simple Inventory Turnover Ratio Calculation example.
- Cost of Goods Sold = $500
- Inventory = $100
Inventory Turnover Ratio = $500 / $100 = 5.0x
This implies that during the year, inventory is used up 5 times and is restored to its original levels.
Analyst Interpretation
You may note that when we calculate receivables turnover, we took Sales (Credit Sales); however, in inventory turnover ratio, we took Cost of Goods Sold. Why?
The reason is that when we think about receivables, it directly comes from Sales made on a credit basis. However, the Cost of Goods sold is directly related to inventory and is carried on the balance sheet at cost.
To get an intuitive understanding of this, you may see the BASE equation.
- B = Beginning Inventory
- A = Addition to Inventory (purchases during the year)
- S = Cost of Goods sold
- E = Ending InventoryEnding InventoryThe ending inventory formula computes the total value of finished products remaining in stock at the end of an accounting period for sale. It is evaluated by deducting the cost of goods sold from the total of beginning inventory and purchases.read more
S = B + A – E
As we note from the above equation, Inventory is directly related to the Cost of Goods Sold.
Colgate Case Study
- Let us calculate the Inventory Turnover Ratio of Colgate. Like in receivables turnover, we take the average inventoryAverage InventoryAverage Inventory is the mean of opening and closing inventory of a particular period. It helps the management to understand the inventory that a business needs to hold during its daily course of business.read more for calculating Inventory Turnover.
- Colgate’s inventory consists of Raw materialInventory Consists Of Raw MaterialRaw materials inventory is the cost of products in the inventory of the company which has not been used for finished products and work in progress inventory. Raw material inventory is part of inventory cost which is reported under current assets on the balance sheet.read more and supplies, work in progress, and finished goods.
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- Colgate’s inventory turnover has been decreasing over the last 4 years (In 2020, it was at 4.20x)
- A lower inventory turnover ratio means that Colgate is taking longer to process its inventory to finished goods.
#10 – Days Inventory
What is the Days Inventory?
Think of Inventory Days as the approximate number of days it takes for inventory to convert into a finished product.
Formula
Example
Let us take a simple Days Inventory Calculation example. We will use the previous example of the Inventory Turnover Ratio and calculate Inventory Days.
- Cost of Goods Sold = $500
- Inventory = $100
- Inventory Turnover Ratio = $500 / $100 = 5.0x
Inventory Days = 365/5 = 73 days.
This implies that Inventory is used up every 73 days on average and is restored to its original levels.
Analyst Interpretation
- You may also think of inventory days as the number of days a company can continue with production without replenishing its inventory.
- One should also look at the seasonality pattern in how inventory is consumed, depending on the demand. It is rare that inventory is consumed constantly throughout the year.
Colgate Case Study
Let us calculate the Inventory turnover days for Colgate. Inventory Days for Colgate = 365 / Inventory Turnover.
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- We see that the inventory processing period has increased from 70.7 days in 2017 to around 86.9 days in 2020.
- This implies that Colgate is processing its inventory slowly as compared to 2017.
#11 – Accounts Payable Turnover
What is Accounts Payable Turnover?
Payables turnover indicates the number of times that payables are rotated during the period. It is best measured against purchases since purchases generate accounts payable.
Formula
Example
Let us take a simple Accounts Payable Turnover calculation example. From the Balance Sheet, you are provided with the following –
- Ending Inventory = $500
- Beginning Inventory = $200
- Cost of Goods Sold = $500
- Accounts Payable = $200
In this example, we need to first find out Purchases during the year. If you remember the BASE equation that we used earlier, we can easily find purchases.
B + A = S + E
- B = Beginning Inventory
- A = Additions or Purchases during the year
- S = COGS
- E = Ending InventoryEnding InventoryThe ending inventory formula computes the total value of finished products remaining in stock at the end of an accounting period for sale. It is evaluated by deducting the cost of goods sold from the total of beginning inventory and purchases.read more
we get, A = S + E – B
Purchases or A = $500 + $500 – $200 = $800
Payables Turnover = $800 / $200 = 4.0x
Analyst Interpretation
- Some analysts make the mistake of taking the Cost of Goods Sold in the numerator of this accounts payable turnover formula.
- It is important to note here that Purchase is the one that leads to Payables.
- We earlier saw Sales can be Cash Sales and Credit sales. Likewise, Purchases can be Cash Purchases as well as Credit Purchases. Cash Purchases do not result in payables; it is only the Credit Purchases that lead to Accounts payables.
- Ideally, we should seek Credit Purchase information from the annual reportAnnual ReportAn annual report is a document that a corporation publishes for its internal and external stakeholders to describe the company's performance, financial information, and disclosures related to its operations. Over time, these reports have become legal and regulatory requirements.read more.
Colgate Case Study
Here, we first calculate the Purchases.
Purchases 2020 = COGS 2020 + Inventory 2020 – Inventory 2019
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We note that the Payable turnover decreased to 5.12x in 2020. This implies that Colgate is taking a bit longer to make payments to its suppliers.
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Once we have the purchases, we can now find the payables turnover. Please note that we use the average accounts payable to calculate the ratio.
#12 – Days Payable Ratio Analysis
What is Days Payable Ratio analysis?
Payable days represent the average number of days a company takes to make the payment to its suppliers.
Formula
Example
Let’s take a simple Payable Days calculation example. We will use the previous example of Accounts PayableAccounts PayableAccounts payable is the amount due by a business to its suppliers or vendors for the purchase of products or services. It is categorized as current liabilities on the balance sheet and must be satisfied within an accounting period.read more Turnover to find the Payable days.
- We earlier calculated Accounts Payable Turnover as 4.0x
- Payable Days = 365 / 4 = 91.25 ~ 91 days
This implies that the company pays its clients every 91 days.
Analyst Interpretation
- The higher the accounts payable days, the better it is for the company from a liquidity point of view.
- Payable days can be affected by seasonality in the business. Sometimes a business may stock inventories due to the upcoming business cycle. This may distort the interpretations that we make on payable days if we are not aware of seasonality.
Colgate Case Study
Let us calculate Accounts Payable for Colgate. Since we have already calculated the Payables Turnover, we can calculate Payable days = 365/Payables Turnover.
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Payable days have increased to 71.4 days in 2020 as compared to 68.5 days in 2017.
#13 – Cash Conversion Cycle
What is the Cash Conversion Cycle?
The cash conversion cycle is the total time taken by the firm to convert its cash outflows into cash inflows (returns). Think of Cash Conversion Cycle is a time taken by a company to purchase the raw materials, then convert inventory into the finished product and sell the product and receive cash and then make the necessary payout for the purchases.
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The Cash Conversion cycle depends primarily on three variables – Receivable Days, Inventory Days, and Payable Days.
Formula
Example
Let us take a simple Cash Conversion Cycle calculation example,
- Receivable Days = 100 days
- Inventory Days = 60 days
- Payable Days = 30 days
Cash conversion cycle = 100 + 60 – 30 = 130 days.
Analyst Interpretation
- It signifies the number of days the firm’s cash is stuck in the operations of the business.
- A higher cash conversion cycle means that it takes a longer time for the firm to generate cash returns.
- However, a lower cash conversion cycle may be viewed as a healthy company.
- Also, one should compare the cash conversion cycle with the industry averages so that we are in a better position to comment on the higher/lower side of the cash conversion cycle.
Colgate Case Study
Cash Conversion Cycle of Colgate = Receivable Days + Inventory Days – Payable Days
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- Overall, we note that the cash collection cycle has increased from around 36.35 days in 2017 to 45.51 days in 2020.
- This implies that overall, the Colgate cash conversion cycle is deteriorating each year.
- We note that the receivables collection period has decreased overall, which has contributed to the decrease in the cash conversion cycle.
- Additionally, we also note that the average payable days have increased, which again positively contributed to the cash conversion cycle.
- However, the increase in inventory processing days in recent years has negatively affected its cash conversion cycle.
Ratio Analysis – Operating Performance
Operating performance ratios try and measure how the business is performing at the ground level and is sufficiency, generating returns relative to the assets deployed.
Operating Performance Ratios are two sub-divided as per the diagram below
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Operating Efficiency Ratios
#14 – Asset Turnover Ratio analysis
What is Asset Turnover Ratio analysis?
The asset turnover ratio is a comparison of sales to total assets. This ratio provides an indication of how efficiently the assets are being utilized to generate sales.
Formula
Example
Let us take a simple Cash Conversion Cycle calculation example.
- Sales of Company A = $900 million
- Total Assets = $1.8 billion
Asset Turnover = $900/$1800 = 0.5x
This implies that for every $1 of assets, the company is generating $0.5
Analyst Interpretation
- Asset turnovers can be extremely low or very high, depending on the Industry they operate in.
- The asset turnover of the Manufacturing firm will be on the lower side due to a large asset base as compared to a company that operates in the services sector (lower assets).
- If the firm has seen considerable growth in assets during the year or the growth has been seasonal, then the analyst should find additional information to interpret such numbers.
Colgate Case Study
Asset Turnover of Colgate = Sales / Average Assets
We note that the Asset Turnover for Colgate is showing a declining trend. Asset turnover was at 1.06x in 2020;
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#15 – Net Fixed Asset Turnover
What is Net Fixed Asset Turnover?
Net Fixed Asset turnover reflects the utilization of fixed assets (Property Plant and Equipment)Property Plant And Equipment)Property plant and equipment (PP&E) refers to the fixed tangible assets used in business operations by the company for an extended period or many years. Such non-current assets are not purchased frequently, neither these are readily convertible into cash. read more.
Formula
Example
Let us take a simple Net Fixed Asset Turnover calculation example.
- Total Sales = $600
- Net Fixed Assets = $600
Net Fixed Asset Turnover = $600 / $600 = 1.0x
This implies that for every $ spent on the fixed assets, the company is able to generate $1.0 in revenues.
Analyst Interpretation
- This ratio should be applied to high capital intensive sectorsCapital Intensive SectorsCapital intensive refers to those industries or companies that require significant upfront capital investments in machinery, plant & equipment to produce goods or services in high volumes and maintain higher levels of profit margins and return on investments. Examples include oil & gas, automobiles, real estate, metals & mining.read more like Automobile, Manufacturing, Metals, etc.
- You should not apply this ratio to asset-light companies like Services or Internet-based as the Net Fixed assets will be really low and not meaningful from an analysis point of view.
- This number can look temporarily bad if the firm has recently added greatly to its capacity in anticipation of future sales.
Colgate Case Study
Net Fixed Asset Turnover of Colgate = Sales / Average Net Fixed Assets (PPE, net)
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Unlike Asset Turnover, Net Fixed asset turnover is also showing an increasing trend.
Net Fixed Asset turnover was at 3.91 in 2017; however, this ratio has increased to 4.41x in 2020.
#16 – Equity Turnover
What is Equity Turnover?
Equity turnover is the ratio of Total Revenue to the Shareholder’s Equity Capital. This ratio measures how efficient the company is deploying equity to generate sales.
Formula
Example
Let us take a simple Equity Turnover calculation example,
- Total Sales = $600
- Shareholder’s Equity = $300
Equity Turnover RatioEquity Turnover RatioThe equity turnover ratio depicts the organization's efficiency to utilized the shareholders' equity to generate revenue. It is evaluated by dividing the total sales from the average shareholders' equity. read more = $600 / $300 = 2.0x.
This implies that the company is generating $2.0 of sales for every $1.0 of shareholder’s equity.
Colgate Case Study
Colgate Equity Turnover = Sales / average Shareholder’s Equity
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We note that historically, Colgate’s Equity Turnover is negative or very high. We cannot conclude much from here.
This was primarily due to two reasons – a) Share buyback program of Colgate resulting in lowering of the Equity base each year. b) Accumulated losses net of taxesNet Of TaxesThe term "net of taxes" refers to the amount remaining after deducting taxes. Net of taxes = Gross amount – Tax amountread more (these are those losses that don’t flow into the income statement).
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Operating Profitability Ratio Analysis
Operating Profitability Ratios measure how much the costs are relative to the sales and how much profit is generated in the overall business. We try to answer questions like “how much the profit percentage” or “Is the firm controlling its expenses by buying inventory etc. at a reasonable price?”
#17 – Gross Profit Margin
What is the Gross Profit Margin?
Gross Profit is the difference between sales and the direct costDirect CostDirect cost refers to the cost of operating core business activity—production costs, raw material cost, and wages paid to factory staff. Such costs can be determined by identifying the expenditure on cost objects.read more of making a product or providing service. Please note that costs like overheads, taxes, interests are not deducted here.
Formula
Example
Let us take a simple Gross Margin calculation example,
Assume from the Sales of a firm is $1,000 and its COGS is $600
- Gross Profit = $1000 – $600 = $400
- Gross Profit MarginGross Profit MarginGross Profit Margin is the ratio that calculates the profitability of the company after deducting the direct cost of goods sold from the revenue and is expressed as a percentage of sales. It doesn’t include any other expenses into account except the cost of goods sold.read more = $400/$1000 = 40%
Analyst Interpretation
- Gross Margin can vary drastically between industries. For example, digital products sold online will have an extremely high Gross Margin as compared to a company that sells laptops.
- Gross margin is extremely useful when we look at the historical trends in the margins. If the Gross Margins has increased historically, then it could be either because of the price increase or control of direct costs. However, if the Gross margins show a declining trend, then it may be because of increased competitiveness and therefore resulting in the decreased sales price.
- In some companies, Depreciation expenses are also included in Direct Costs. This is incorrect and should be shown below the Gross Profit in the Income Statement.
Colgate Case Study
Let us calculate Colgate’s Gross Margin. Colgate’s Gross Margin = Gross Profit / Net Sales.
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Please note that depreciation related to manufacturing operations are included herein Cost of Sales (Colgate 10K 2020, pg 79)
Shipping and handling costs may be reported either in the Cost of SalesCost Of SalesThe costs directly attributable to the production of the goods that are sold in the firm or organization are referred to as the cost of sales.read more or Selling General and Admin Expenses. Colgate has, however, reported these costs as a part of Selling General and Admin Expenses. If such expenses are included in the Cost of Sales, then the Gross margin of Colgate would have decreased by 845 bps and decreased by 810 bps in both 2019 and 2018, respectively.
source: – Colgate 10K 2020, pg 54
#18 – Operating Profit Margin
What is the Operating Profit Margin?
Operating profit or Earnings Before Interest and TaxesEarnings Before Interest And TaxesEarnings before interest and tax (EBIT) refers to the company's operating profit that is acquired after deducting all the expenses except the interest and tax expenses from the revenue. It denotes the organization's profit from business operations while excluding all taxes and costs of capital.read more (EBIT) margin measures the rate of profit on sales after operating expenses. Operating income can be thought of as the “bottom line” from operations.
Formula
Operating Profit Margin = EBIT / Sales
Example
Let us take a simple Operating Profit Margin calculation example,
We will use the previous example.
- Assume from the Sales of a firm is $1,000 and its COGS is $600
- SG&A expense = $100
- Depreciation and Amortization = $50
- EBIT = Gross Profit – SG&A – D&A = $400 – $100 – $50 = $250
EBIT Margin = $250/$1000 = 25%
Analyst Interpretation
- Please note that some analyst takes EBITDAEBITDAEBITDA refers to earnings of the business before deducting interest expense, tax expense, depreciation and amortization expenses, and is used to see the actual business earnings and performance-based only from the core operations of the business, as well as to compare the business's performance with that of its competitors.read more (Earning before interest taxes depreciation and amortization) instead of EBIT as Operating Profit. If this is so, they assume that depreciation and amortization are non-operating expenses.
- The most analyst prefers taking EBIT as Operating Profit. Operating Profit Margin is most commonly tracked by analysts.
- You need to be mindful of the fact that many companies include non-recurring items (gains/losses) in SG&A or other expensesExpensesOther expenses comprise all the non-operating costs incurred for the supporting business operations. Such payments like rent, insurance and taxes have no direct connection with the mainstream business activities.read more above EBIT. This may increase or decrease the EBIT Margins and skew your historical analysis.
Colgate Case Study
Colgate’s Operating Profit = EBIT / Net Sales.
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Historically, Colgate’s Operating Profit has remained in the range of 24-26.0%
However, in 2019, Colgate’s EBIT Margin decreased significantly to 22.6%. In 2019, Operating profit included charges resulting from the restructuring expenses (Global Growth and Efficiency Program), acquisition-related costs and a benefit related to a value-added tax matter in Brazil
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#19 – Net Margin
What is Net Margin?
Net Margin is basically the net effect of operating as well as financing decisions taken by the company. It is called a Net Margin because, in the numerator, we have Net Income (Net of all the operating expensesOperating ExpensesOperating expense (OPEX) is the cost incurred in the normal course of business and does not include expenses directly related to product manufacturing or service delivery. Therefore, they are readily available in the income statement and help to determine the net profit.read more, interest expenses as well as taxes)
Formula
Example
Let us take a simple Net Margin calculation example; continuing with our previous example, EBIT = $250, Sales = $1000.
- We now assume that interest is $100, and taxes is charged at the rate of 30% of EBIT = $250
- Interest = $100
- EBTEBTPretax income is a company's net earnings calculated after deducting all the expenses, including cash expenses like salary expense, interest expense, and non-cash expenses like depreciation and other charges from the total revenue generated before deducting the income tax expense.read more = $150
- Taxes = $45
- Net Profit = $105
Net Profit Margin = $105/$1000 = 10.5%
Analyst Interpretation
- Like Gross margins, Net Margins can also vary drastically across industries. For example, Retail is a very low margin business (~5%), whereas a website selling digital products may have a Net Profit MarginNet Profit MarginNet profit margin is the percentage of net income a company derives from its net sales. It indicates the organization's overall profitability after incurring its interest and tax expenses.read more in excess of 40%.
- Net Margins is useful for comparison between companies within the same industry due to similar products and cost structureCost StructureCost Structure refers to those costs or expenses (fixed as well as variable costs) which businesses will incur or will have to incur to produce the desired objective of the business; such costs include the cost of purchasing the raw material to the cost of packaging the finished products.read more.
- Net Profit Margins can vary historically due to the presence of non-recurring items or non-operating items.
Colgate Case Study
Let us have a look at the Net Margin of Colgate.
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- Historically, Net Margin for Colgate has been in the range of 13.1% – 16.4%.
- However, Net Margin increased in 2020 to 16.4% primarily due to aftertax benefits of $13 million resulting from the restructuring program (Global Growth and Efficiency Program) and $71 million tax benefit related to
subsidiary and operating structure initiatives.
#20 – Return on Total Assets
What is Return on Total Assets?
Return on AssetsReturn On AssetsReturn on assets (ROA) is the ratio between net income, representing the amount of financial and operational income a company has, and total average assets. The arithmetic average of total assets a company holds analyses how much returns a company is producing on the total investment made.read more or Return on Total Assets relates to the firm’s earnings to all capital invested in the business.
Formula
Two important things to note there –
- Please note that in the denominator, we have Total Assets, which basically takes care of both the Debt and Equity Holders.
- Likewise, in the numerator, the Earnings should reflect something that is before the payment of interest.
Example
Let us take a simple Return on Total example,
- Company A has an EBIT of $500 and Total Assets = $2000
- Return on Total Assets = $500/$2000 = 25%
This implies that the company is generating a Return on Total Assets of 25%.
Analyst Interpretation
- Many analysts use the numerator as Net Income + Interest Expenses instead of EBIT. They basically are deducting the taxes.
- Return on Assets can be low or high, depending on the type of industry. If the company operates in a capital-intensive sector (Asset heavy), then the return on assets may be on the lower side. However, if the company is Asset Light (services or internet company), they tend to have had a higher Return on Assets.
Colgate Case Study
Let us now calculate the Return on the total AssetsCalculate The Return On The Total AssetsReturn on Total Assets is a measure of a company's income proceeds left for shareholders divided by the total assets owned by the company. ROA = Net Income/Total Assets.read more of Colgate. Colgate’s Return On Total Assets = EBIT / Average total assets
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Colgate’s Return on total assets has been declining since 2017. Most recently, it has declined to its lowest at 25.1%. Why?
Let’s investigate.
- Two reasons can contribute to decreasing – either the denominator, i.e., average assets have increased significantly, or the Numerator Net Sales have dropped significantly.
- In Colgate’s case, the total assets increased significantly to $15.03 billion in 2019 and $15.92 billion in 2020. We also note that the overall Net sales have increased by 5% in 2020. The net effect of the two has resulted in a decrease in the decline in Return on Total Assets.
#21 – Return on Equity
What is Return on Equity?
Return on Equity means the rate of return earned on the Total Equity of the firm. It can be thought of as dollar profits a company generates on each dollar investment of Total Equity.
Formula
Please note Total Equity = Ordinary Capital + Reserves + Preference + Minority Interests
Example
Let us take a simple Return on Equity example.
- Net Income = $50
- Total Equity = $500
Return Equity = $50/$500 = 10%
Analyst Interpretation
- Please note that the Net income will be before the preference dividends and minority interestMinority InterestMinority interest is the investors' stakeholding that is less than 50% of the existing shares or the voting rights in the company. The minority shareholders do not have control over the company through their voting rights, thereby having a meagre role in the corporate decision-making.read more are paid.
- Higher Return on Equity implies a higher return to the Stakeholders.
Colgate Case Study
- Colgate’s Return on Equity = Net Income (before pref dividends & minority interest) / average total equity.
- Please do remember to take the Net income before minority interest payments in Colgate. This is because we are using the total equity (including the non-controlling assets).
- We note the Return on Equity in 2020 was at 344.8%. This result is somehow not making much sense here and cannot be interpreted.
- Return on Equity jumped primarily due to a decrease in the denominator – Shareholder’s equity (increase in treasury stockTreasury StockTreasury Stock is a stock repurchased by the issuance Company from its current shareholders that remains non-retired. Moreover, it is not considered while calculating the Company’s Earnings Per Share or dividends. read more because of buyback and also because of accumulated losses that flow through the Shareholder’s Equity)
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#22 – Return on Owner’s Equity
What is Return on Owners Equity?
Return on equity or Return on Owner’s Equity is based only on the common shareholder’s equity. Preferred dividendsPreferred DividendsPreferred dividends refer to the amount of dividends payable on preferred stock from profits earned by the company, and preferred stockholders have priority in receiving such dividends over common stockholders.read more and minority interests are deducted from Net Income as they are a priority claim. Return on equity provides us with the Rate of return earned on the Common Shareholder’s Equity.
Formula
Example
Let us take a simple ROE calculation example,
- Net Income = $50
- Total Equity = $500
- Owners Equity = $400
ROE (owners) = $50 / $400 = 12.5%
Analyst Interpretation
- Since common shareholder’s equity is a year-end number, some analyst prefer taking the average shareholder’s equity (average of beginning and year-end)
- ROE can be basically considered as a profitability ratio from a shareholder’s point of view. This provides how much returns on generated from shareholder’s investments, not from the overall company investments in assets. (Please note Total Investments = Shareholder’s Equity + Liability that includes Current Liabilities and Long term Liabilities)
- ROE should be analyzed over a period of time (5 to 10 year period) in order to get a better picture of the growth of the company. Higher ROE does not get passed directly to the shareholders. Higher ROE -> Higher Stock Prices.
Colgate Case Study
Like the Return on Total Equity, Return on Owners Equity has jumped significantly to 626.7% in 2020.
Return on Equity increased because of the very low Shareholder’s Equity base in 2019-2020. (reasons as discussed earlier in Return on Total Equity).
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#23 – Dupont ROE
What is Dupont ROE?
Dupont ROE is nothing but an extended way of writing an ROE formula. It divides ROE into several ratios that collectively equal ROE while individually providing insight to the most important term in ratio analysis of a financial statement.
Formula
= (Net Income / Sales) x (Sales / Total Assets) x (Total Assets / Shareholder’s Equity)
The above formula is nothing but the ROE formula = Net Income / Shareholder’s Equity.
Example
Let us take a simple Dupont ROE calculation example.
- Net Income = $50
- Sales = $500
- Total Assets = $200
- Shareholder’s Equity = $400
- Gross Margin = Net Income / Sales = $50 / $500 = 10%
- Asset Turnover = Sales / Total Assets = $500/$200 = 2.5x
- Asset Leverage = Total Asset / Shareholder’s Equity = $200 / $400 = 0.5
Dupont ROE = 10% x 2.5 x 0.5 = 12.5%
Analyst Interpretation
- THE Dupont ROE formula provides additional ways to analyze the ROE ratio and helps us find out a reason for the final number.
- The first term (Net Income/Sales) is nothing but the Net Profit Margin. We know that the Retail sector operates on a low-profit margin; however, software product-based companies may operating on a high-profit margin.
- The second term here is (Sales/Total Assets); we normally call this term Asset turnovers. It provides us with a measure of how efficiently the assets are being utilized.
- The third term here is (Total Assets / Shareholder’s Equity); we call this ratio Asset Leverage. Asset leverage gives insight into how the company may be able to finance the purchase of new assets. Higher Asset leverage does not mean that it is better than the low multiplier. We need to look at the financial health of the company by performing a full ratio analysis of the financial statement.
Colgate Case Study
Colgate Dupont ROE = (Net Income / Sales) x (Sales / Total Assets) x (Total Assets / Shareholder’s Equity)
Please note that the Net Income is after the minority shareholder’s payment.
Also, the shareholder’s equity consists of only the common shareholders of Colgate.
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We note that the asset turnover has shown a declining trend over the past 7-8 years.
Profitability, however, has increased over the past 4 years.
Asset leverage (average total assets / average total equity) is also decreasing over the years. You may note that the Asset Leverage has shown a steady decline over the past 4 years and is currently standing at 18.65x.
The net result due to the three above factors resulted in a decrease in ROE.
Risk Analysis
Risk analysisRisk AnalysisRisk analysis refers to the process of identifying, measuring, and mitigating the uncertainties involved in a project, investment, or business. There are two types of risk analysis - quantitative and qualitative risk analysis.read more examines the uncertainty of income for the firm and for an investor.
Total firm risks can be decomposed into three basic sources – 1) Business risk, 2) Financial Risk 3) External Liquidity RiskLiquidity RiskLiquidity risk refers to 'Cash Crunch' for a temporary or short-term period and such situations are generally detrimental to any business or profit-making organization. Consequently, the business house ends up with negative working capital in most of the cases.read more
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Business Risk
Wikipedia defines it as “the possibility a company will have lower than anticipated profits or experience a loss rather than making a profit.” If you look at the income statement, there are many line items that contribute to the risk of making losses. In this context, we discuss three kinds of business risks – Total Leverage, Operating Leverage, and Financial Leverage.
# 24 – Operating Leverage
What is Operating Leverage?
Operating leverage is the percentage change in operating profit relative to sales. Operating leverage is a measure of how sensitive the operating income is to the change in revenues.
Formula
Please note that the greater use of fixed costsFixed CostsFixed Cost refers to the cost or expense that is not affected by any decrease or increase in the number of units produced or sold over a short-term horizon. It is the type of cost which is not dependent on the business activity.read more, the greater the impact of a change in sales on the operating income of a company.
Example
Let us take a simple Operating Leverage calculation example.
- Sales 2020 = $500, EBIT 2020 = $200
- Sales 2019 = $400, EBIT 2019 = $150
- % change in EBIT = ($200-$150)/$100 = 50%
- % change in Sales = ($500-$400)/$400 = 25%
Operating Leverage = 50/25 = 2.0x
This means that when Operating profit changes by 2% for every 1% change in Sales.
Analyst Interpretation
- The greater the fixed costs, the higher is the operating leverage.
- Between three to ten years of data should be used for calculating Operating Leverages.
Colgate Case Study
- Colgate’s Operating LeverageOperating LeverageOperating Leverage is an accounting metric that helps the analyst in analyzing how a company’s operations are related to the company’s revenues. The ratio gives details about how much of a revenue increase will the company have with a specific percentage of sales increase – which puts the predictability of sales into the forefront.read more = % change in EBIT / % change in Sales
- I have calculated the operating leverages for each year from 2017 – 2020.
- Colgate’s operating leverage is very volatile as it ranges from -3.95x to 1.88x. This is primarily due to the inclusion of restructuring expenses in SG&A.
- It is expected that Colgate’s Operating leverage to be higher as we note that Colgate has made significant investments in intangible assetsIntangible AssetsIntangible Assets are the identifiable assets which do not have a physical existence, i.e., you can't touch them, like goodwill, patents, copyrights, & franchise etc. They are considered as long-term or long-living assets as the Company utilizes them for over a year. read more in 2019 and 2020.
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# 25. Financial Leverage
What is Financial Leverage?
Financial leverage is the percentage change in Net profit relative to Operating Profit. Financial leverage measures how sensitive the Net Income is to the change in Operating Income.
Financial leverage primarily originates from the company’s financing decisions (usage of debt). Like in the operating leverage, fixed assetsFixed AssetsFixed assets are assets that are held for the long term and are not expected to be converted into cash in a short period of time. Plant and machinery, land and buildings, furniture, computers, copyright, and vehicles are all examples.read more lead to higher operating leverage. In Financial leverage, the usage of debt primarily increases the financial risk as they need to pay off interest
Formula
Example
Let us take a simple Financial Leverage calculation example,
- Net Income 2020 = $120, EBIT 2020 = $200
- Net Income 2019 = $40, EBIT 2019 = $150
- % change in EBIT = ($200-$150)/$100 = 50%
- % change in Net Income = ($120-$40)/$40 = 200%
Financial Leverage = 200/50 = 4.0x
This means that Net Income changes by 4% for every 1% change in Operating Profit.
Analyst Interpretation
- The greater the Debt, the higher is the financial leverage.
- Between five to ten years of data should be used for calculating Financial Leverages.
Colgate Case Study
Colgate’s Financial Leverage has remained volatile (-52.97x in 2018 and 1.49x in 2020)
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# 26. Total Leverage
What is Total Leverage?
Total leverage is the percentage change in Net profit relative to its Sales. Total leverage measures how sensitive the Net Income is to the change in Sales.
Formula
= Operating Leverage x Financial Leverage
Example
Let us take a simple Total Leverage calculation example,
- Sales 2020 = $500, EBIT 2020 = $200, Net Income 2020 = $120
- Sales 2019 = $400, EBIT 2019 = $150, Net Income 2019 = $40
- % change in Sales = ($500-$400)/$400 = 25%
- % change in EBIT = ($200-$150)/$100 = 50%
- % change in Net Income = ($120-$40)/$40 = 200%
Total Leverage = % change in Net Income / % change in Sales =200/25 = 8x.
Total Leverage = Operating Leverage x Financial Leverage = 2 x 4 = 8x (Operating and Financial Leverage calculated earlier)
This implies for every 1% change in Sales, the Net Profit moves by 8%.
Analyst Interpretation
Higher sensitivity could be because of higher operating leverage (higher fixed cost) and higher financial leverage (higher debt), 3-10 years of data should be taken to calculate the total leverage.
Colgate Case Study
Let us now look at the Total Leverage of Colgate.
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Source: Ratio Analysis (wallstreetmojo.com)
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- Colgate’s Total Leverage is also volatile (as there is significant volatility in operating and financial leverage)
Financial Risk
Financial riskFinancial RiskFinancial risk refers to the risk of losing funds and assets with the possibility of not being able to pay off the debt taken from creditors, banks and financial institutions. A firm may face this due to incompetent business decisions and practices, eventually leading to bankruptcy.read more is the type of risk primarily associated with the risk of default on the company loan. We discuss 3 types of financial risk ratiosRisk RatiosRisk ratio, also known as relative risk, can be defined as a metric that is taken into use for the measurement of risk-taking place in a particular group and comparing the results obtained from the same with the results of the measurement of a similar risk-taking place in another group.read more – Leverage Ratio, Interest Coverage Ratio, and DSCR ratio.
# – 27. Leverage Ratio or Debt to Equity Ratio
What is Leverage Ratio?
The leverage ratio calculates how much the company uses debt as compared to its equity. This is an important ratio for bankers as it provides the company’s ability to pay off debt using its own capital.
Formula
Generally, the lower the ratio better it is. Debt includes current debt + long-term debt.
Example
Let us take a simple Leverage Ratio calculation example.
- Current Debt = $100
- Long Term Debt Long Term Debt Long-term debt is the debt taken by the company that gets due or is payable after one year on the date of the balance sheet. It is recorded on the liabilities side of the company's balance sheet as the non-current liability.read more= $900
- Shareholder’s Equity = $500
Leverage Ratio = ($100 + $900) / $500 = 2.0x
Analyst Interpretation
- A lower ratio is generally considered better as it shows greater asset coverageAsset CoverageAsset Coverage Ratio is a risk analysis multiple that depicts the company’s ability to repay the debt by selling off the assets and outlines how much of the monetary and tangible assets are available against the debt. It helps an investor to predict the future earnings and gauge the risk involved in the investment.read more of liabilities with its own capital.
- Capital-intensive sectors generally show a higher debt to equity ratioDebt To Equity RatioThe debt to equity ratio is a representation of the company's capital structure that determines the proportion of external liabilities to the shareholders' equity. It helps the investors determine the organization's leverage position and risk level. read more (leverage ratio) as compared to the services sector.
- If the leverage ratio is increasing over time, then it may be concluded that the firm is unable to generate sufficient cash flows from its core operations and is relying on external debt to stay afloat.
Colgate Case Study
Leverage Ratio of Colgate = (Current portion of long term debtCurrent Portion Of Long Term DebtCurrent Portion of Long-Term Debt (CPLTD) is payable within the next year from the date of the balance sheet, and are separated from the long-term debt as they are to be paid within next year using the company’s cash flows or by utilizing its current assets.read more + Long term Debt) / Shareholder’s Equity.
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Source: Ratio Analysis (wallstreetmojo.com)
The Debt to Equity has decreased from 32.31x in 2018 to 6.90x in 2020. This is primarily due to an increase in shareholder’s equity over the last 3 years. We note that the Debt Ratio in 2020 was 0.87.
# 28. Interest Coverage Ratio
What Is the Interest Coverage Ratio?
The Interest Coverage ratio signifies the ability of the firm to pay interest on the assumed debt.
Formula
Please note that EBITDA = EBIT + DepreciationDepreciationDepreciation is a systematic allocation method used to account for the costs of any physical or tangible asset throughout its useful life. Its value indicates how much of an asset’s worth has been utilized. Depreciation enables companies to generate revenue from their assets while only charging a fraction of the cost of the asset in use each year. read more & Amortization
Example
Let us take a simple Interest Coverage Ratio calculation example,
- EBIT = $500
- Depreciation and Amortization = $100
- Interest Expense = $50
- EBITDA = $500 + $100 = $600
Interest Coverage Ratio = $600 / $50 = 12.0x
Analyst Interpretation
- Capital intensive firms have higher depreciation and amortization, resulting in lower operating profit (EBIT)
- In such cases, EBITDA is one of the most important measures as it is the amount available to pay off interest (depreciation and amortization is a non-cash expense).
- Higher interest coverage ratios imply a greater ability of the firm to payoff its interests.
- If Interest coverage is less than 1, then EBITDA is not sufficient to pay off interest, which implies finding other ways to arrange funds.
Colgate Case Study
Colgate’s Interest Coverage Ratio = EBITDA / Interest Expense.
Please note that depreciation and amortization expenses are not provided in the income statement. These were taken from the Cash Flow statementsCash Flow StatementsA Statement of Cash Flow is an accounting document that tracks the incoming and outgoing cash and cash equivalents from a business.read more.
Also, the Interest expense shown in the IncomeInterest Expense Shown In The IncomeInterest Income is the amount of revenue generated by interest-yielding investments like certificates of deposit, savings accounts, or other investments & it is reported in the Company’s income statement. read more Statement is the net number (Interest Expense – Interest Income)
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Colgate has a very healthy Interest coverage ratio. More than 25x in the past three years.
# 29. Debt Service Coverage Ratio (DSCR)
What is DSCR?
Debt Service Coverage Ratio tells us whether the Operating Income is sufficient to pay off all obligations that are related to debt in a year. It also includes committed lease payments. Debt servicing consists of not only the interest but also some principal portion also is repaid annually.
Formula
Debt Service Coverage Formula = Operating Income / Debt Service
Operating Income is nothing but EBIT
Debt Service is Principal Payments + Interest Payments + Lease Payments
Example
Let us take a simple DSCR calculation example,
- EBIT = $500
- Pricipal Payment = $125
- Interest Payment = $50
- Lease PaymentsLease PaymentsLease payments are the payments where the lessee under the lease agreement has to pay monthly fixed rental for using the asset to the lessor. The ownership of such an asset is generally taken back by the owner after the lease term expiration.read more = $25
- Debt Service = $125 + $50 + %25 = $200
DSCR = EBIT / Debt Service = $500/$200 = 2.5x
Analyst Interpretation
- A DSCR of less than 1.0 implies that the operating cash flows are not sufficient enough for Debt Servicing, implying negative cash flowsNegative Cash FlowsNegative cash flow refers to the situation when cash spending of the company is more than cash generation in a particular period under consideration. This implies that the total cash inflow from the various activities under consideration is less than the total outflow during the same period.read more.
- This is a pretty useful matrix from the Bank’s point of view, especially when they give loans against property to individuals.
Colgate Case Study
Colgate’s Debt Service Coverage Ratio = Operating Income / Debt Service
Debt Service = Principal Repayment of Debt + Interest Payment + Lease Obligations
For Colgate, we get the Debt service obligations from its 10K reports.
Please note that you get the estimate of the Debt Service in the 10K reports.
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Source: Ratio Analysis (wallstreetmojo.com)
Colgate 10K 2020, pg 46.
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Debt Service Coverage Ratio or DSCR for Colgate is healthy at around 6.62x for 2020.
However, the DSCR has deteriorated a bit in the recent past.
You can click here for a detailed, in-depth article on DSCR RatioDSCR RatioDebt service coverage (DSCR) is the ratio of net operating income to total debt service that determines whether a company's net income is sufficient to cover its debt obligations. It is used to calculate the loanable amount to a corporation during commercial real estate lending.read more
External Liquidity Risk
#30 – Bid-Ask Spread
What is Bid-Ask Spread?
Bid-Ask Spread is a very important parameter that helps us understand how the stock prices get affected by the purchase or sale of stocks. The bid is the highest price that the buyer is willing to pay. Ask is the lowest price at which the seller is willing to sell.
Example
Let us take a simple Bid-Ask Spread calculationBid-Ask Spread CalculationThe asking price is the lowest price at which a prospective seller will sell the security. The bid price, on the other hand, is the highest price a prospective buyer is willing to pay for a security, and the bid-ask spread is the difference between them.read more example.
If the bid price is $75 and the asking price is $80, then the bid-ask spread is the difference between the ask priceAsk PriceThe ask price is the lowest price of the stock at which the prospective seller of the stock is willing to sell the security he holds. In most of the exchanges, the lowest selling prices are quoted for the purpose of the trading. Along with the price, ask quote might stipulate the amount of security which is available for selling at the given stated price.read more and the bid price.$80 – $75 = $5.
Analyst Interpretation
- External market liquidity is an important source of risk to investors.
- If the bid-ask spread is low, then the investors are able to buy or sell assets with little price changes.
- Also, another factor of external market liquidity is the dollar value of shares traded.
Colgate Case Study
Let us look at Colgate Bid-Ask Spread.
As we note from the below snapshot, Bid = 78.61 and Ask = $80.30
Bid Ask Spread = 80.30 – 78.61 = 1.69
source: Yahoo Finance
#31 – Trading Volume
What is Trading Volume?
Trading volume refers to the average number of shares traded in a day or over a period of time. When the average trading volume is high, this implies that the stock has high liquidity (can be easily traded). Numerous buyers and sellers provide liquidity.
Example
Let us take a simple Trading Volume example.
There are two companies – Company A and B. The average daily traded volume of Company A is 1000, and that of Company B is 1 million.
Which company is more liquid? Obviously, company B, as there is more investor’s interest, and traded more.
Analyst Interpretation
- If the trading volume is high, then investors will show more interest in the stock that may help in an increase in the share price.
- If the trading volume is low, then fewer investors will have an interest in the stocks. Such stock will be less expensive due to the unwillingness of investors to buy such stocks.
Colgate Case Study
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Let us look at the trading volume of Colgate. We note from the above graph that Colgate traded volume was at around 4.165 million shares. This is a fairly liquid stock.
Growth Analysis
The growth rate is one of the most important parameters when we look at analyzing a company. As a company becomes bigger and bigger, its growth tapers and reaches a long-term sustainable growth rate. In this, we discuss how sustainable growth rates are important.
#32 – Sustainable Growth
What is Sustainable Growth?
The company’s sustainable topline growth is one of the most important parameters for investors as well as creditors in ratio analysis. It helps the investor forecast the growth in earnings and valuations.
It is important to find the sustainable growth rate of the company. The sustainable growth rate is a function of two variables:
- What is the rate of return on equity (which gives the maximum possible growth)?
- How much of that growth is put to work through earnings retention (rather than being paid out in dividends)?
Formula
Sustainable Growth Rate Formula = ROE x Retention rate
Example
Let us take a simple Sustainable Growth calculation example.
- ROE = 20%
- Dividend Payout ratioDividend Payout RatioThe dividend payout ratio is the ratio between the total amount of dividends paid (preferred and normal dividend) to the company's net income. Formula = Dividends/Net Incomeread more = 30%
Sustainable Growth Rate = ROE x Retention Rate = 20% x (1-0.3) = 14%
Analyst Interpretation
- If the company is not growing, then there can be greater chances of default on the debt. Company’s growth phase is generally divided into three parts – Hypergrowth period, Maturity Phase, Decline Phase
- The Sustainable Growth rate formulaSustainable Growth Rate FormulaSustainable Growth Rate (SGR) signifies how much a company can grow without relying on external capital infusion and is calculated using the return on equity and multiplying it by the business retention rate. Formula = retention rate * return on equityread more is primarily applicable in the Mature Phase.
Colgate Case Study
Let us now look at the sustainable growth rate of Colgate. Sustainable. We note that the sustainable ROE as per the formula comes out to be around 133.2% in 2020. For all earlier years, it is in excess of 200% (which seems highly unlikely). Due to recent volatility in foreign exchangeForeign ExchangeForeign exchange, or Forex, is trading one currency for values equivalent to another currency.read more (leading to sales volatility) and buybacks done by the management (leading to an increase in ROE), sustainable growth is not making sense here.
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Conclusions
Now that we have calculated all 32 ratios, you should appreciate that ratio analysis includes learning about the company from all dimensions. A single ratio does not provide us with a full understanding of the company. All the ratios need to be looked at cohesively and are interconnected. We noted that Colgate has been an amazing company with solid fundamentals.
Now that you have done the fundamental analysis of Colgate, you can move forward and learn Learn Financial Modeling in ExcelLearn Learn Financial Modeling In ExcelFinancial modeling in Excel refers to a tool used for preparing the expected financial statements predicting the company's financial performance in a future period using the assumptions and historical performance information.read more (forecasting of Colgate’s Financial Statements). Don’t forget to look at these Finacial modeling tipsFinacial Modeling TipsFinancial modeling refers to the use of excel-based models to reflect a company's projected financial performance. Such models represent the financial situation by taking into account risks and future assumptions, which are critical for making significant decisions in the future, such as raising capital or valuing a business, and interpreting their impact.read more and also download financial modeling templatesDownload Financial Modeling TemplatesYou can download many financial modeling templates, including the Alibaba IPO model, Box IPO model, Colgate financial model, free cash flow to firm model, sensitivity analysis model, comparable company analysis model, PE and PE band chart.read more.
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I started with the Colgate Financial modelling and waiting for the ratio file so i can move ahead on that. Thanks and great work
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CAN YOU FORWARD ME THE TEMPLATE OF RATIO ANALYSIS AS TRIED IT COUPLE OF TIME, BUT DID NOT RECEIVE THE TEMPLATE YET.
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1.Vertical analysis (common size analysis) : balance sheet and income statement only
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Also, I have two questions:
1) How do you calculate the denominator values for the DSCR?
2) Do you make any corrections in assets or liabilities calculating the debt ratio? I calculated it with given values and averages, but I always come up with results that slightly differ from the ones you posted.
Thank you very much for your help
best regards
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Thank you in advance !!!
Ryan,
Hi Ryan, can you please check your email. Have already sent the templates.
Apreciaria receber os modelos por e-mail
Please check your email for the templates.
Hi Dheeraj,
very good and exhaustive job.
I’m new on your site and i’m appreciating the contect. It looks much better than other similar sites.
Could you please email me the excel templates?
Thanks
Thanks Pedro! have mailed you the templates for your perusal.
Nice explanation. Kindly send me the Ratio Analysis Solved and Unsolved .
Hello Nikhil, can you please check your email.
Hello Mr. Dheeraj
You are doing an amazing job
Can you please send me the template for this case study,
would be thankful.
Best Regards
Hello Farrukh, please check your email for the templates.
Thanks for posting the article ! Can you please share the templates to try it out?
Have just sent the templates Parag! please check.
Hello Dheeraj, thanks for your precious help may i ask you to forward me the template of this ratio analysis.
Thanks a lot!
done Ryan!
Thank so much for the precise write up. I have learnt a lot. I am doing self study and would like to get in to Financial Consultancy. May you please send the excel templates to my email.
done! Thanks Emmeldah!
Very well explained .Can you share the excel template.
Please check your email template for ratio analysis. Thank you….
WOW….This is a very useful article. Is it possible for you to share the template with me?
thanks Quam! Have sent the templates.
Nice course Dheeraj could you send me the spreadsheet
thanks Jay. Please check your email.
Hi Dheeraj,
Great article and very helpful. I would be very grateful if you could send me the excel file.
Thank you.
Thakns Rishi! Please check your email for the ratio analysis templates.
Hi Dheeraj
It’s a very informative post . Can you please send me the Ratio Analysis templates.
Hello Dheeraj,
This is a lifesaver! . Can you send me the excel files?
Thank you
Amber
:-) Amberlene! please check your email for the templates.
Good Job…Can you send me templates (excel format) of these ratio analysis with interpretation.
Thanks Ankit! Please check your email for the templates
Thanks, Mr. Dheeraj. Excellent blog. Very informative and easy to grasp.
Appreciate if you could share the excel template of Ratio Analysis
Thanks Mr. Parthasarathy for the encouragement! Please check your email for the ratio analysis files.
Nice one. Can you pls share the templates
Please check your email template for ratio analysis. Thank you….
Pls send to my email too sire
[email protected]
Please check your email template for ratio analysis. Thank you….
Hi Dheeraj, many thanks for the lesson. could you please send me the templates. Many thanks once again..
Thanks Samuel! Please check your email for the templates.
Very informative indeed !
Could you please help out with the information , how to calculate basis, diluted & cash EPS. how is it important to predict a stock price.
Hello Debanjan, please check these two articles 1) EPS and Diluted EPS 2) Why PE ratio is important for valuation?
Thanks,
Dheeraj
Hello…Dheeraj…really a very good and interesting article….would you be so kind to send me the financial analysis templates. Thanks a lot…Have a very nice day…
thanks Herciu! Have sent the financial analysis templates to your email id.
wow more than wealthy , thanks very much
hope to send me the ratio exceed sheet
i will be so glad
Thanks John :-) Please check your email for the files.
many thx for ur precious effort hope u can send me the excel files asap
thanks Tena. Please check your email for the templates.
Dear Dheeraj,
I’m a big fan of you. Many thanks for the free courses and hints.
Really helpful and mind blowing.
Cheers.
thanks Samuel! :-)
Best content I’ve come across in my 3 months of MBA journey…thank you so much
thanks Krunal!
Great material. Please can you send Excell spreadsheets which are editable?
Thank you
Igor
Please check Igor if you have received the templates. If not, please ping me.
Good Morning Dheerraj,
Your website in the most informative I have found. I want to be a value investor, I have done lots of search but did not find good site to evaluate a stock before I pull the trigger.
I do not understand a company with negative equity, or higher current ratio and the price of the stock is soaring. I see company with higher debt than equity but investor are buying these stocks.
Do you have a list of ratios or other parameter to asses an investment?
How reliable are those ratios found in google finance or many other sites.
Look forward to your comments.
Thanks
Edwin Kan
Hi Edwin,
thanks for your comment. We cannot just look at one ratio and then make a judgment on its valuation. Like companies with negative equity or higher current ratio, their other set of fundamental ratios may be sound or it could be that in future there is strong case that they would improve.
Additionally, please note that a good “fundamental” company may not necessarily mean that it’s a BUY. Valuation should be also reasonable. You may use PE ratio, EV to EBITDA Ratio or many other Relative Value Ratios for making such judgments.
Google finance and other similar websites do provide data, but I tend to do my own set of calculation. The primary reason is that most database providers have a standard definition of their calculating ratios, whereas, each company may have a different set of reporting financials. Overall it becomes confusing if I take it from a database.
thanks,
Dheeraj
Hi Dheeraj,
What u r doing is incredible. Helping students and professionals to reach their goals. I salute u sir.
It would be a great help if u can please provide the spread sheet.
Thanks
Salil
thanks Salil for your kind words! have sent you the spreadsheet of financial analysis.
You are simply so Awesome! You are doing a great job for the investing community
Sir, can you please send me the Ratio Analysis Solved and Unsolved Excel!
Thank you
thanks Victor! please check your email for the solved unsolved excel.
Grear Job Dheeraj!
Can you please send me the file?
Thanks
thanks Miguel! please check your inbox for the files.
Hi, Very usefull article
Can you please provide me with the Excel templates? Thank you very much!
thanks EVI. Can you please check inbox for the templates.
Surely, a great article man. Looking forward to read your articles again.
Thanks Vatsalya!
Hi Dheeraj,
Great works from you. Could you please email me the template so that i can understand this a bit better. thank you so much
Thanks Roy! please check your email for the templates.
Amazing article.Can you share spreadsheet for reference.
thanks Niranjan! Have sent you the ratio spreadsheet
Hi Sir,
Can you email me a copy of the ratio template?
Thanks
done! please check.
Hi Dheeraj
good day
its amazing
Could you please email me the template
i already bought the 99 courses online,non of them listing the full ratio analysis
thanks
thank you! Please check your email for the details.
Great work sir.
Knowledgeable material for freshers like me to begin with.
Can you please share me the Ratio Analysis Solved and Unsolved Excel for practise.
Thank you
thanks Kishore! Please check your email for the templates.
• # 24. Leverage Ratio or Debt to Equity Ratio Analysis
one of public company in Indonesia uses formula:
(total Liabilities – Cash & Cash Equivalents) / Total Equity
Please advice for the discrepancy.
Tks and brgds
RK
Hello Ricky, I am not sure why will they do so.
Total Liabilities = Debt + Equity. So in this case, the numerator becomes Debt + Equity – Cash and Cash Equivalents. For calculating debt to equity, numerator should contain only the Debt part.
Maybe you could consider a modified version, wherein you may look at (Total Debt – Cash and Cash Equivalent) / Total Equity. The numerator is actually net debt. In this case, we assume that cash can be used to pay a part of the debt.
Best,
Dheeraj
Hi Mr. Dheeraj, what a great work!!! It would be great if you could send me the excel spreadsheet. Thank you.
thanks Aung. Please let me know if you have not received it yet.
Hi Dheeraj,
The article mentioned on ratio analysis is very useful and practical.
Can you please send me the template as I’m unable to download the same.
Thanks Pradeep. Please let me know if you have not received it yet.
Hi Dheeraj,
I am an MBA in finance and have 5 years of experience spread across securities and retail banking and just joined as an RM- corporate real estate,composite banking solution wholesale banking with one of the leading bank of India, I was wondering as to what skill sets do I need to possess to Wade into mid market segment or large corporate, wholesale banking as I don’t have MBA from top-notch ivy league college.
Also let me know if needed to work in particular department /industry to gain the requisite experience to land up a job in mid market or large corporate in wholesale banking as I can see almost all of them possess degree from tier 1 college.
Would really appreciate the career guiding feedback.
Hi Pradeep, I think since you are already working with a leading bank in India, guess your work experience and growth within the bank will take you to the higher level.
hi plz i need ur material :(
done Tena. Please check your email.
Please send the excel sheets to me. Thanks
done Ridhi! Please check your email.
first of all a lots of thanks for lovely website. i need template ratio analysis for practice . can u please provide template ratio analysis . my email id is [email protected]. once again i would like to thanks for helping.
already done. Please let me know if you have not received it yet.
This is amazing, could you please share the template with me.
Thanks
thanks Kamal. Please let me know if you have not received it yet.
Excellent work, deep explanation and high focus.
Can you send me the template and the article
Thank you
thanks Guisser! Hope you have received the templates.
Hi Dheeraj,
Many thanks for your useful course. Please send me financial analysis template.
Regards
thanks Davood! Hope you have received the templates.
Thank you for the great lesson.can you send me solved and unsolved templates.tks
thanks Manik! Hope you have received the templates.
great article. could you please send the templete, thanks
thanks David. Please let me know if you didn’t receive the templates.
This is amazing with a lot of simplicity. please kindly send the complete template to me.
Thanks.
thanks David! Please let me know if you didn’t receive the templates.
Hi Could you please email me the templates for ratio analysis
Hi Kevin, Please let me know if you didn’t receive the templates yet.
This content on financial ratios is best I have come through in internet,
One thing I did not understand is whats the difference between credit sales and account receivables.
Both numbers represent one same thing is that payments would be received by company in future.
So what is different
Hello,
Credit Sales leads to accounts receivables. Accounts receivables is basically a cumulative credit sale which is yet to be recovered to date.
for example, in 2016 – Credit Sales was $100 and in 2017 Credit sales was $200. Also, assume that none of the credit sales were recovered as cash.
For 2016, Credit Sales = $100; Accounts REceivables = $100
For 2017, Credit Sales = $200, Accounts Receivalbes = $300 ($100 + $200)
Hope this clarifies.
Best,
Dheeraj
Hi Dheeraj,
Thank you so much for your great effort. I really appreciate the valuable sources that you have shared with us. This blog is incredible, and you are just amazing.
By the way, could you please send me the Colgate Ratio Analysis Excel Template (both solved and unsolved ones)? Again, thank you so much for your contribution and your guidance.
I look forwards to hearing from you soon.
Best regards,
Vu
thanks Vu Nguyen! Please let me know if you haven’t received the templates yet.
Really good stuff Dheeraj…The download doesnt work. Can you send me the templates please ?
Thanks Harvinder! Please let me know if you haven’t received the ratio analysis files yet.
Hi,
Kindly mail me the analysis.
Regards.
done!
Hi Dheeraj
it is very nice and fully elaborated
can you send the templates please
wish you all the best
thanks Asif. Please let me know if you still haven’t received the files.
Very interesting and fully documented
thanks Asif!
Hi Dheeraj!
This is amazing!
Could you please email me the templates.
Thank you!
Hi Cindy, please check your emails for the ratio analysis excel sheet.
could you pls mail it to me too. Thnaks
Please let me know if you still haven’t received the files.
hi dheeraj vaidya sir i am a big fan of u sir i would like to tnq u, sir if U donT mine can u send me US CMA Materials and which one is best for CMA EXAM Point ofu
Hi, unfortunately, i do not have much material related to CMA Exam.
Hi Dheeraj,
Can u plz send me financial statement analysis templates as well as working notes.
Thank you in advance
done Priyanka!
Please can l get a template of the financial ratio analysis sheet.
done Onyeka! please check your inbox.
thank you very much your material is very educative ,is it possible to send spreadsheets which are editable for me to practice im not good with the spreedsheet
Hi Isaac, the excel sheets are editable. You can modify and check all the links and formulas.
Hi Dheeraj, usefull article and comments. can you please send me the excel file? Thank you so much. Have a nice day Dheeraj
Hi Dion, have sent you the sheet.
Hi Dheeraj, Many thanks for this article! Please share financial analysis solved and unsolved templates.
Hi Bhavna, i have just added you to the mailing list. you should receive the files shortly.
Hey Dheeraj, request you to send a copy to me as well
done Sanjay! please check.
Good morning Dheeraj, thanks for the great effort you are putting in to help some of us.
I would be most grateful if you could send me the templates.
Thank you
Hi Eric, please check your mail for financial analysis excel template.
HI Dheeraj,
thanks very much for this great work, i would be most grateful if you could send me the solved and unsolved template
eric
Wonderful Sir,
Can you please send me the template as well
Hi Alaa, have sent the templates. Please check
Dear Dheeraj,
Thank you very much for such an extensive guide!
Could you please prompt me in what resources could I analyse industry and typical fin ratios, BS, P&L structure for the certain industry for free?
Also could you please tell some database where it is possible to find financial statements of the company, if it is not public.
Thank you for your answer in advance.
Hi Artem, you can refer to Yahoo Finance, Google Finance for such information. If the company is not public, then very difficult to get the details for free.
Great lesson, can you send me solved and unsolved templates.
Sir, can you please send me the Ratio Analysis Solved and Unsolved Excel!
Thanks!
Hi Jai, please check your email for the same.
Great work. I’m a fan of your work. Please, can you email me the excel template.
regards
Anton Fernando
Hi Anton, have sent you the ratio analysis templates.
Dear Sir Dheeraj,
you have been doing a great job, I humbly request if you could forward me the template of this ratio analysis. Thanks a million
Done Ahmed. Please check.
Dear Sir Dheeraj, thank you so much for the hard work you are simply second to none and to continuously share the greatest wealth of your knowledge with others is appreciated in the strongest terms that I can’t even explain. It is almost impossible to come across people like yourself who is equipped with greatest knowledge yet so humble and hardworking in sharing this great wealth. I admire your hardwork and knowledge. You are great.
thanks Ahmed for such kind words :-)
Hellow Dheeraj,
Thanks for this tutorial, it is very useful! I would like to know if you have the supporting models too? I did not find them on this page. I would like to have for my own practice and consumption. I will be grateful if you kindly share the solved and unsolved versions of these models.
Best regards,
Ravi
Hi Ravi, please check your email. I have just emailed you those.
Hi Dheeraj,
Kindly send it to me too. Thank you.
Thanks Ramtej! Please let me know if you haven’t received the templates yet.
Great job Sir,
Can you please send me the template as well
Done Olivier!
Many thanks wonderful explanation..great work keep it up
Also could you please send me the template ..many thanks in advance
Hi Absar, have sent the ratio analysis excel sheets. Please check.
thanks Absar!
Have been searching for sth like this for long. And it’s even better that I could have expected it to be!
Thank you! This guide is really the most comprehensive.
And can I please have the excel template?
Thanks a lot again.
Julia
thanks Julia :-)
Have sent an email with the templates. Please check.
Dear Dheeraj,
This is an excellent tutorial. Very easy to understand and easy to navigate. Thank you for your generosity. Please send me the Excel templates I would really appreciate it.
Best Regards
thanks Rita! please check your email for the ratio analysis templates.
can you please provide the excel template
Done Anum!
Nice way of presentation
.
thanks!
Good day Dheeraj,
Great work, very useful and explained very succinctly. Please may I have a pdf version of the explanations and interpretation of the ratios?
Sincere thanks
regards
Selven
thanks Selven. I have sent the excel templates at your email id.
Very informative Sir,
Can I get the detailed excel template?
Hi Ifeanyi, please check your email for the templates.
Please share the templates
Thanks
done Khitindra!
Hi Dheeraj
Very much appreciated the commentary etc.
Kindly requesting you to e-mail me the Excel templates including calculations please.
Thank you.
Esh
Done Esh. Please check your email.
Hi,
Thank you for the detailed writeup. Could you provide me with the templates?
Viji
Hi Vishwas, please check your email for the templates.
Dear Dheeraj,
Can you please provide me with the Excel templates? Thank you very much!
Hi Olga, please check your email for the same.
Best,
Dheeraj
Dheeraj, I must say how grateful I’m for this page.
I had my 1,5y internship at investment banking and your lessons here were more usefull than those over that period. Many thanks and Congrats for your job that enables us not only to perform better at this industry but also to get a deep joy of doing this job.
I’m really enjoying every class related to IB.
Sincers greetings from Colombia!
thanks Francesco!
It’s heartening to see that you’ve found these resources useful.
Best,
Dheeraj
Hi Dheeraj i submitted my email to get the Colgate Template and also for the Terminal Value exercise but i haven’t received anything, could you check this please?
Hi Andres, i have resent you the templates. Please check.
Hey Dheeraj excellent work man…I too need the template.
Ok I got it
Hi Manish, please check your email for the templates.
Dear Dheeraj,
Can you please provide me the Excel templates? Thank you very much!
Hi Sami, i have just sent you the templates.
Hi Dheeraj, very usefull post. To validate them with Excel, would you please send me the file? Thank you. Have a nice day.
Hi Rakesh, please check your email. I have send the excel files to you.
This is amazing work. Could you please send the financial analysis template. Would you have a modeling template too that links all 3 statements or just Income Statement. Thanks for providing this.
thanks Ravi! Please check your email for the same. For the linking of the 3 statements, please check this Financial Modeling in Excel
Well done! Dheeraj.
Could you please email me all the templates?
Thanks,
Jason
Thanks Jason. I have just sent the excel files.
Hi Dheeraj,
Could you please send me the templates.
Thanks so much. Awesome.
Biju Mathews
thanks Biju. Please check your email for the ratio analysis templates.
Dear Dheeraj,
Its always a pleasure to visit your site to get some good inspiration on what books to read.
Could i request for the financial analysis templates. Thanks!
Hi Gonc, thanks! have emailed the financial analysis templates.
HI Dheeraj,
Excellent article, Can I please get the template?
Hi Samyak, please check your email for the templates.
Hi,
Thank you for this tutorial, I find it very useful! I just would like to ask where is the model have you calculated the ratios? I did not find them anywhere. I wou;d like to make a comparison with mine which I have worked on the unsolved version. And I have some more questions. May I ask them here or it’s better via e-mail, privately?
Thank you!
Mariya
Hi Mariya, i have sent you both the solved and unsolved excel sheets. Please let me know if you have any questions.
Hi Vaidya
Can you assist on earning management template?
Hi Osegbue, unfortunately, i do not have one.
Hi Dheeraj,
Thanks a lot.. Good stuff.
Can you please share the excel model?
Regards,
Kunal
thanks Kunal. Please check your mail for the templates.
Hi Dheeraj, very useful article. Can you send me the file.
Hi Harman, please check your email for the templates.
Great compilation Dheeraj. Thanks for this, can you please mail the excel template?
Hi Pradeep, please check your email for the same.
This is wonderful analysis. Can you please share the template
Hi Disha, i have just sent you the sheet.
Hi, this course was great, very understandable. Thank you for your hard work :).
Thanks Saruul! :-)
Very nice Guide and so thanks. I would request for providing excel templates
thanks Farid. I have just sent you the templates!
Hi Dheeraj :
i am a finance professional myself, and i find this outstanding and amazing. so much of knowledge and hard work. god bless you.
may i request the excel templates for my learning purposes?
ganesh srini
Hi Ganesh, I have sent the files on your email id.
Thanks,
Dheeraj
Hi Sir/Dheeraj
Excellent Information, Could you please send me the template and PDF for this lesson on my email Please ? Thank you so much in advance.
Hi Mohamed, have sent you the excel sheet. I do not have the PDF lesson on this.
Thank you so much
:-)
Hello Dheeraj Vaidya,
Undoubtedly, you effort is worth being appreciated. I am not being able to download the templates of financial ratio analysis. If you don’t mind, can you please send me those templates?
thanks Prince. Please check your email for the templates.
Dear Dheeraj,
Great job, deep explanation and great article. Thank you for the effort.
Could you please send me the templates (solved & unsolved) and PDF of this article?
thanks Simo. Please check your mail for the templates.
Hello Dheeraj,
Thank you very much for sharing your research here. Many students like me who have interest in financial modeling get to learn a lot of things from this blog.
But for practice i am unable to download the templates. Can you please send me the templates on my E-mail ID
Hi Gagandeep, have sent you the excel sheet. Please check. Thanks!
Fantastic Job!! Very useful article
thanks Sree!
Excellent post Dheeraj. Kudos to your hard work in educating fellow professionals. Thanks a lot..!
thanks Abraham!
Thanks for giving great lesson… Plzz Send ratio analysis solved and unsolved examples
Hi Aditya, please check your email. Have just sent you the templates.
Hi Deeraj
Can you please send me the templates?
Done Ashish. Please check.
Hi Dheeraj,
Simple perfect the work you have done on Ratio Analysis / Financial Statement Analysis
Do you have the pdf version ? Pls email this
George
Athens -Greece
Hi George, thanks for the appreciation. I do not have the pdf version. however, i have sent you the excel sheets.
can you send the same on my email ID
Hi Gurdeep, have sent you the sheet.
Hi Dheeraj, can you please send me the Ratio Analysis Solved and Unsolved Excel!
Hi Nizamuddin, please check your email for the templates.
Really great information. In-depth guide.
Can you please send the Excel file on my id!
thanks Sahil!. Please check your email for the fundamental analysis templates.
ver grateful
thanks Issifu!
This is a great analysis.
Thanks So much. Can I get the excel copy.
thanks Abideen. Please check your email.
Kindly send me a detailed Ratios in a sheet
Done Mutinta!
Dear Dheeraj, Your piece of work is one of the finest, simplest and most comprehensive one. Very easy to understand and apply. Please keep up your good work.
Can you please send me the unsolved and solved excel sheet to complete my learning since I am unable to download the same from site.
Cheers!
thanks Paresh! Have sent you the templates.
Hello Mr Dheeraj,again amazing work from you.I am student and i want to ask you an analyst question.What means that during 5 years example (2005-2010),a company has a decrease of 5% at non current assets,and an increase of 5% at current assets?
Hi Dheeraj,
Thank you very much for sharing Creator’s knowledge and make it simple for us to understand!! May God bless you!!
thanks Mika!
Hi Dheeraj,
Thank you very much for sharing. Could you please send me all the Excel Templates together with pdf to my email
Best Regards,
Barbara
Hi Barbara, please check your email.
Awesome work, could you please provide the excel template?
Done Jose. Please check.
Hello Dheeraj, can you kindly forward me the documents, i will really appreciate it. Tried downloading the files you posted on the site, but its not just downloading.
Regards.
Hi Emmanuel, Please Check your email id for the templates.
Hi Dheeraj
Can u check if Did correct ratio calculations , I can send you my work
Interpretation I am learning how to write, if you can , it would be great
Sure.
Awesome explanation,I must say you have really put in some great effort for explaining jargons of fundamental world.
Thank you so much and look forward to more of knowledge sharing articles from you.
It would be great if you can send over templates on my email id.
Hi Prashanto, please check your email for the same.
Hi Dheeraj
Kindly send me a detailed Ratios in a sheet
Thanks for your contribution
Keep the good work rocking
Regards
Thanks Prasad. I have just sent you the sheet. Please check.
Hi Dheeraj
Kindly send me a detailed Ratios in a sheet
Hi Mady, please check for the templates. Have sent an email.
Hello Dheeraj
Seasons’ Greetings! Wish you are doing fine!
Then i was trying to download the Colgate’s Ration Analysis excel template(both solved and unsolved excel templates) through the link provided on beginning of this page. However i haven’t received the same in my inbox in spite of providing multiple email id’s.
Thus may i request you to forward me both of this templates to my below listed email id ASAP.
Kindly do the needful at the earliest and oblige.
Best/.
Vipul
Hi Vipul, have sent the template to you.
Thanks,
Dheeraj
This is fantastic. well done. please can you mail the document to my email. could not download or copy properly. Thank you so much
thanks Ololade! have emailed you a copy.
Hi Dheeraj,
I remember doing financial modeling module at corporate bridge with you guys. The training modules listed at Wallstreetmojo look interesting. Looking forward for learning some new modules.
sure Saurabh! Good luck.
Very resourceful material…. Kindly send me the excel and PDF version. Thanks
Hi Moruff, have emailed you the templates. Please check.
Hi Vaidya,
Kindly send me the excel and PDF version.
Thanks
Hi, may I have a question, is that EBIT includes exceptional items or exclude exceptional items?
Hi Hao, EBIT may or maynot include exceptional items. You need to check the management discussion and analysis section for details of such exceptions items (if included).
Hi Dheeraj,this is amazing work can you please send me the Ratio Analysis Solved and Unsolved Excel!
Thank you
thanks Talal! have email you the ratio analysis templates.
Hi Dheeraj your article was very useful to brush up basics of financial ratios and their applicability.
Please do share Excel templates.
Apart from above, Dheeraj i would like to know how can i connect to you for any other future references.
Thanks!
Hi Piyush, thanks! have emailed you the templates. You will find my contact details in there.
Cheers!
Hai! This kingsley from Zambia liked and enjoyed your article. Kindly send me if possible Ratio analysis solved and unsolved.
Thanking you in advance
thanks Kingsley. Please check your email for the ratio analysis excel.
Hi,
Can you please send me the ratio analysis excel sheets?
Thanks!
Hi Sean, please check your email for the templates.
Hi Vaidya,
Can you send me the templete?
Thank you
Done Stevan! Please check.
Hello Dheeraj,
It’s my first touch with WSMojo, and I feel really overwhelmed.
How could I start at WSMojo? I mean, from 0 to get the necessary knowledge to break into IB.
Greetings,
David
Hi David, thanks! To break into IB, you need to master Excel, accounting, Financial modeling and valuations.
If you are relatively new to accounting, a good place to start is this finance for non finance course. Thereafter, you can pick this Ratio analysis case study to understand the analysis part of accounting. For financial modeling, you can refer to this step by step guide to Financial modeling in excel. Try to practice this too.
for valuations, you can refer to this link – Valuation
Good luck,
Dheeraj
Nice article, please send me the templates [email protected]
Thanks.
Please check your email. I’ve just sent the model.
HidEAR Sir,
I appreciate your efforts.I am ACCA Student.Could you plz send me these ratios in Excel formats.
I will be very thankful.
Regards,
Hi Ibrar, please check your mail. I have sent you the templates.
Best,
Dheeraj
Hi Deeraj
This page has really been a blessing. You have done a marvellous job! Could you please send me all the excel as well. The email download buttons seems to have an issue.
All the best,
Thanks,
Ibraheem
Hi Ibraheem, have sent the templates to your email id.
Please check.
Hi, useful article. Please send me the excel template at your convenience. Thanks and Best Regards,
Hi Sharifah, apologies for this extended delay. Have just sent you the template.
Hi Dheeraj,
Very useful article.
Could you please send to me the financial analysis templates?
All the best
Antonio
Thanks Antonio. Please check your email for the template.
Hi Dheeraj,
Really amazing templates will be of great use and benefit to me. Please may you send all templates to me.
Hi Jerome! have sent the financial analysis templates to you.
Amazing stuff. Kudos. Can you send me all updated templates along with the financial analysis temp.
Thanks again.
Sandeep
thanks Sandeep. Please check your email fo rthe templates.
Hi can you please send me the ratio workbook. I learned a model complete from you and now I model on my own business.
Hi Ed, can you please check your email. Have just sent the ratio analysis workbook.
Hi Dheeraj, its very informative. Can you please send me the templates to my email?
Done Hafida. please check your email.
You are doing a great job for young Analyst
Sir, can you please send me the Alibaba IPO Financial Model
Thank you
Hi Peter, Thank you! Have mailed you the model.
You are simply so Awesome! You are doing a great job for the investing community
Sir, can you please send me the Ratio Analysis Solved and Unsolved Excel!
Thank you
Hey Peter, many thanks :-) i have emailed you the ratio analysis excel sheets.
Thank you that was really helpful. please i have one question.
why for the sutainable growth rate you used return on owner’s equity and not return on total equity?
best regards
Excellent, really appreciate the efforts made by Dheeraj Vaidya…. how can i get these stuff in email.
Regards
Abrar Tanoli
Hi Abrar, emailed you excel ratio analysis templates.
Hi Dheeraj
could you please send me the Ratio Analysis Solved and Unsolved Excel! Somehow its not working through download mode.
Best/.
Vipul
Done Vipul. Please check your inbox.
Hello Dheeraj
Good analysis .. !!
Request to share the financial analysis templates.
Thanks Ravindra. Please check your email.
Hi Dheeraj, usefull article and excellent study. Please send me the excel template at your convenience. Thanks and Best Regards,
thanks Jennifer! Please check your email.
Thank you for your comprehensive guide! Could you send me excel template through email? Thanks
Thanks JJ. Have sent the ratio analysis templates.
Hi Dheeraj Great work.You making thing simpler to me.can I get ratio analysis excel sheet.
thanks Ganesh! Please check your inbox for the templates.
Very interesting and ratios and analysis presented in a very apt way. excellent
thanks Vinay for the appreciation. :-)
Thank you for the article. It is very useful.
Thanks Carla!
This is a very comprehensive paper. Is this available in word or pdf? Also, can you please share the various excel files. Thanks.
Hi Reza, i don’t have a PDF. Have emailed you the ratio analysis templates. Please check.
Hi,
Could you please send me the templates to my email, and all the ratios , and if can any information related to this subject, its great work
thank you
Dr. Mohammad Al-Afeef
Hello Dr. Mohammad Al-Afeef, please check your email. Have sent the financial analysis excel sheets.
Hi dheeraj,
Great elborated sheet, can you please email to me?
Thanks
Jiten
thanks. Please check your inbox Jitendra for the templates.
This is great. I would love a copy. Thanks.
Please check your email Clinton. Hope you received it this time.
Thank you for the great lesson.can you send me solved and unsolved templates.
Hi Sahin, thanks. Have sent you the excel templates on ratio analysis.
That tool is really wonderful. Would be possible to have a copy as well?
Thank you
thanks Rui! Please check your inbox for the financial analysis template.
Article is really interesting, Pls share the excel sheets.
thanks Achintya. please check your mail.
Hi Dheeraj
Your article is very useful to learn analyze company’s condition, could you send me the ratio analysis excel sheet?
Thanks
Thanks Jorge! Please check your inbox for the financial analysis excel.
Good work mister Dheeraj,please could you send me the template.Thank you in advance
thanks Anges. Please check your inbox for the templates.
Hi Dheeraj,
This is a very useful article and comments. May you please send me the file as I am failing to download. Thanks a lot.
Thanks Phineas. Have resent the templates to you. Please check.
Amazing explanation Dheeraj. Thank you alot. May i have a copy of the templates plz as well. thank you so much
thanks Razane! Please check your inbox for the details.
hey dheeraj i am one for your followers i just want to thank you for this content you have put here…….this is amazing putting all this knowledge in a structured form requires huge amount of efforts all your post are very detailed thank you sir once again….you are doing great and wish you all the success in life and in general.
I would request you to please send me the template of Ratio Analysis.
Many thanks for the wishes Apoorv. Please check your inbox for the templates.
Best,
Dheeraj
Hi Dheeraj,
Would you please send me the Ratio Analysis Solved and Unsolved Excel?
Hi Nada, please check your inbox for the ratio analysis excel.
Thank you..
Hello.
Your article is very useful to learn analyze company’s condition, could you send me the ratio analysis excel sheet?
Thanks
thanks Julita. Please check your inbox for the excel sheet.
Hello Dagestan,
Really insightful work. Please share both templates and guide. Would appreciate such an amazing work on cash flow statement.
Regards,
Shoaib
thanks Shoaib. Will try and make one on the Cash Flow statements too. I have sent the templates to your id.
Very nice work.
but why some definitions is not appearing.
and please i need the template.
Thanks Mohammed. Can you please let me know which sections don’t appear. I have sent the ratio analysis templates to you.
Thank you for this effort.
Hi Ali, please check your mail for the ratio analysis spreadsheet.
Hi Dheeraj plse can you send me the templates please.
Much appreciated
Hamilton
Hi Hamilton, please check your inbox for the templates.
It is astonishing , keep up the good work
I would be pleased if you could send me a copy
Thanks Mohammad. Please check your email for the ratio analysis spreadsheet.
Hi Dheeraj,
thanks a lot I’ve received them
you’ve made a great work thanks for all
thanks Fedwa!
Can you please forward me the same :)
Hi Parkar, i have just resent you the templates. Please check.
hi Dheeraj,
Could you please share with your ratio template? it looks great and full I would like to understand if it is simple in use.
Thank you in advance.
thanks Nazariy! I have sent the templates to your id.
Hi Dheeraj, your posts are too good for a beginner to understand. I would like to have the excel template to have more meaningful insight. Your posts helps me alot and keep up your good work.. keep writing. Good Day
thanks Deepika for the encouraging works. Please check your inbox for the ratio analysis sheet.
Hi Dheeraj, you are really helping the financial aspirants. Can you please send me the file Solved and Unsolved excel?
Thanks Naseer. Please check your mail for the ratio analysis sheets.
Hi Dheeraj, Your post is awesome with very strong explanation. You are doing a great work.
can you please send me the excel template to have more meaningful insight from the article.
done!
Hey Dheeraj,
This is very useful indeed. I work as an auditor and my work requires a great deal of analytical skill…I am even considering Financial analysis courses…
Great job
thanks Esmie!
Hi Dheeraj, This is a very good spreadsheet and will prove very useful for our trainees. Please could you email me the spreadsheet?
Hi Stuart, please check your inbox for the ratio analysis excel sheet. Have just emailed you the same.
Best,
Dheeraj
Hi Dheeraj; could you send me a copy please
done Ahmed!
Hello Dheeraj,
Great work and in-depth analysis. Is it possible to send me the templates? Much appreciated.
thanks May. please check your email.
the work is really amazing sir. it would be useful to me Please kindly send me the excel sheet. Thanks
Thanks Eswar. Have sent the financial analysis templates to you.
Dheeraj,
Wow! Congratulations for your great work!
Can you please send me the Ratio Analysis Solved and Unsolved Excel files?
Thank you
thanks Renee! have just sent the templates. Please check.
Hi Dheeraj, quite useful article, can you please sned me the file? Thank you.
hi Hitarth, have send the files to you.
Hi Dheeraj,great job and I hope to get these kind of articles going forward as well. Can you please send the file to my mail.
thanks Durga :-). I have sent across the ratio analysis sheets to you.
Hi Dheeraj,
Excellent job
Could you please send me the template on my email
Thanks a lot,
many thanks David :-).
Please check your inbox for the templates.
excellent work, appreciated.
can you please share the excel template for my reference and practice?
thank you
thanks Srikanth. Have sent the ratio analysis excel for your reference.
Hi Dheeraj,
Love your work keep it up man, please send me the templates
Thanks!
thanks Rahul. Please check your inbox.
Hi Dheeraj. Can you please mail me the colgate template.
Thanks Appreciate it.
thanks Rajiv. I have sent the financial analysis excel.
Hello,
Could you please send me a mail of this solved template ?
Hi Umang, can you please check your mail. thanks.
Great Work. Thanks for this. I can totally see the number of hours you must have spent to get this done. Can I also get a copy of the excel template.
Kind Regards,
Muhammad Aimash
thanks Muhammad for your kind words. i have just sent the ratio analysis excel sheets for your perusal.
Dheeraj, this is a great work. Can you please send me the templates? Thanks
Thanks Tony. Please check your inbox.
This is certainly an outstanding work. Thank you for sharing it. Would you mind sending me the template?
Hi Leonardo, thanks for the encouragement. Have just send the ratio analysis files at your inbox.
Sir, can you please send me the Ratio Analysis Solved and Unsolved Excel!
Thank you
Please check your inbox for the ratio analysis files.
Dear Dheeraj,
Good job, deep explanation!
Could you pls send me the templates (solved & unsolved) and PDF of this article?
Many thanks!
Simon
thanks Simon. I have happy to see that this ratio analysis guide was useful. Have sent the excel files at your email.
Clear, concise what a great article, Very helpful. Can you please sent me the file
thanks Mamoudou! please check your inbox for the files.
That’s amazing for the financial better skills development.
Thanks Moses. Glad that you found this useful.
Could you please send me the template on my email thanks a lots
Hello Cem, please check your mail for the templates!
Hi Dheeraj, could you please email me your template. Thanks this is great.
done Malesela. Please check your email.
Hi;
Congratulations for your job!, Please send me the templates on my email.
It would be helpful.
thanks Rafagag. Please check your mail for the ratio analysis excel sheets.
Thanks so much for this. Please send the templates if you don’t mind sending another set.
Terrific work.
Best,
Andrea
Thanks ADL. Please check your mail.
Hi Dheeraj,
Thank you for your clear explanation, can you please send me the templates? It would be helpful.
Thanks Sony for the appreciation. Please check your mail for the ratio analysis template.
Hi Dheerja,
really nice job ! Could you send me the templates ? Thank you in advance !
ED