Analyzing Financial Efficiency and Performance Ratios (Completed)

Financial and operational managers use ratio analysis to pinpoint strengths and weaknesses from which strategies and initiatives can be formed. Shareholders may use ratio analysis to measure your company's results against other organizations or make judgments concerning management effectiveness and mission impact.

Important ratio 'groups' that assist in analyzing a business and its viability are efficiency and performance ratios. Performance ratios measure the function of core operations for a company. These ratios reveal information about how efficiently resources are used to generate sales and cash, among other things. Efficiency ratios are used to analyze how well a company uses its assets and liabilities internally.

It is important to understand the calculation requirements of each ratio but equally important is to understand what the results represent in regard to performance and efficiency. This webinar will cover both concepts.

Ratio analysis is a useful tool that will improve understanding of financial results over time. It provides key indicators of organizational performance. This course focuses on specific efficiency and performance ratios and their use.

Who Should Attend
Financial and accounting analysts, internal auditors, compliance analysts, investor analysts and anyone interested in having a better comprehension of a company’s performance.

Topics Covered

• Specific efficiency and performance ratios
• How performance ratios are used
• Mathematics behind ratios and the importance of understanding the concepts for proper analysis
• Types and purpose of efficiency ratios
  • Sales and Inventory
  • Accounts Receivable (AR) turnover
  • Asset turnover
  • Inventory turnover
• Purpose of performance ratios
• Various performance ratios and how to analyze the results
  • Day's sales outstanding
  • Cash conversion cycle
  • Days payable outstanding
  • Day's inventory outstanding
  • Day's payables outstanding

Learning Objectives

• Identify the mathematics behind ratios and the importance of understanding the concepts for proper analysis
• Recognize the types and purpose of efficiency ratios
• Describe the purpose of performance ratios
• Identify various performance ratios and how to analyze the results

Level
Basic

Instructional Method
Group: Internet-based

NASBA Field of Study
Auditing (2 hours)

Program Prerequisites
None

Advance Preparation
None