Skip to content
FinanceQuest
Start free

Financial Statement Analysis

Common-size and trend analysis, profitability and return ratios, DuPont, liquidity, efficiency, leverage, cash flow and earnings quality — practised on three years of a retailer's statements.

16 lessons · 48 exercises · about 6 hours · 4 free lessons

You will be able to

  • Restate statements as common-size and trend analyses
  • Calculate and interpret profitability, return, liquidity, efficiency and leverage ratios
  • Decompose ROE with DuPont and explain what changed
  • Judge cash flow and earnings quality and normalise one-off items

Designed for: Analysts, credit and banking professionals, students and anyone who needs to judge a company from its accounts.

Financial Statement Analysis Core

Module 1 · Preparing statements for analysis

  1. An analyst's frameworkFive questions that structure any analysis — and a first look at Rawdah Home Retail Co.14 minFree
  2. Common-size statementsRestate statements as percentages of revenue and total assets to see structure and change at a glance.16 minMembers
  3. Horizontal and trend analysisYear-on-year growth and CAGR — and spotting the lines that grow faster than sales.18 minMembers

Module 2 · Ratio analysis

  1. Profitability ratiosGross, EBITDA, operating and net margins: what each captures and how Rawdah compares with peers.18 minFree
  2. Returns: ROA, ROE and ROICProfit relative to the capital that produced it — on average balances, with consistent numerators and denominators.22 minMembers
  3. DuPont analysisSplit ROE into margin, asset turnover and leverage to see what really changed.18 minMembers
  4. Liquidity ratiosCurrent, quick and cash ratios — and why a rising current ratio can be bad news.15 minMembers
  5. Efficiency and the cash conversion cycleDSO, DIO, DPO and the cash conversion cycle: how many days cash is tied up in operations.22 minMembers
  6. Leverage and coverageDebt ratios, net debt to EBITDA and interest cover — the lender's core metrics.18 minMembers

Module 3 · Cash flow and earnings quality

  1. Analysing the cash flow statementFree cash flow, cash conversion and how a company funds its shortfalls.20 minFree
  2. Earnings quality and accrualsCompare earnings with cash flow and measure how much of profit is accruals.18 minMembers
  3. Normalising earningsStrip out one-off items to see the underlying trend — then draw the conclusion on Rawdah.20 minMembers

Module 4 · Applied analysis

  1. Benchmarking against peersPut Rawdah's ratios next to its peers', use medians, and turn the gaps into SAR.22 minMembers
  2. The lender's viewSize Rawdah's debt capacity with coverage, leverage, cash flow and covenant headroom — then test a new loan request.22 minMembers
  3. Red flags in financial statementsSpot the warning signs — receivables outpacing sales, inventory build-ups, capitalised costs, falling cash backing — and test Rawdah for them.22 minFree
  4. Case: a full company analysisPull every lens together on three years of Rawdah's statements, build the dashboard, find the root cause and write the conclusion.45 minMembers