How to Analyse Company Finances

How to Analyse Company Finances, using public domain information.

This course teaches the student the basics of financial statements, financial ratios, and investing ratios, so they will have the ability to analyse any company for the purposes of potential investment.

The student will be introduced to the course, will learn how to navigate through Google Finance and Companies House website.

The financial statements that are covered are the Annual Report, Auditors Report, Income Statement, Balance Sheet, and Cash Flow Statement.

The financial ratios that are covered are the accounting equation, capital employed, profit/assets ratio, return on shareholders’ funds, return on capital employed, gross efficiency of assets, return on equity, equity multiplier, return on assets, debt to equity ratio, debt ratio, total long term debt, gross profit margin, return on sales, net profit margin, return on invested capital, asset turnover, sales/total assets ratio, current ratio, working capital turnover, solvency ratio, current debt, interest cover, times interest earned, debtor days, creditor days, monthly turnover, average day’s sales, and key ratio for investors.

The investing ratios that are covered are market capitalisation, price earnings ratio, dividend yield, earnings per share, beta, capital asset pricing model and institutional ownership.

Once the basic financial statements, financial ratios, and investing ratios are covered, the student will then go over a financial analysis of a real world company.

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