FINANCIAL RATIOS: How to Analyze Financial Statements

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  • Опубліковано 19 чер 2024
  • 💥Financial Ratios Cheat Sheets → accountingstuff.com/shop
    In this short tutorial you'll learn how Financial Ratio Analysis works. We'll break Financial Ratios down into their five main groups:
    ▪ Profitability Ratios
    ▪ Liquidity Ratios
    ▪ Efficiency Ratios
    ▪ Leverage Ratios
    ▪ Price Ratios
    Then I'll show you how to calculate 25 of the most popular Financial Ratios using the Income Statement and the Balance Sheet. Afterwards, you can jump into my Financial Ratios Playlist to explore each ratio in more detail.
    🔴Subscribe for more Accounting Tutorials → geni.us/subtothechannel
    ⏱️TIMESTAMPS
    00:00 - Intro
    00:28 - FINANCIAL STATEMENTS
    01:16 - WHAT IS FINANCIAL RATIO ANALYSIS?
    01:56 - What types of Financial Ratio are there?
    - Cheat Sheet Bundle: accountingstuff.com/shop/fina...
    02:39 - PROFITABILITY RATIOS
    - Cheat Sheet: accountingstuff.com/shop/prof...
    03:47 - Gross Profit Margin (GPM)
    04:19 - Operating Profit Margin (OPM)
    04:40 - Net Profit Margin (NPM)
    05:46 - Return on Assets (ROA)
    06:49 - Return on Equity (ROE)
    07:37 - Return on Capital Employed (ROCE)
    08:11 - LIQUIDITY RATIOS
    - Cheat Sheet: accountingstuff.com/shop/liqu...
    09:10 - Cash Ratio
    09:50 - Quick Ratio
    10:17 - Current Ratio
    10:29 - EFFICIENCY RATIOS
    - Cheat Sheet: accountingstuff.com/shop/effi...
    11:04 - Inventory Turnover Ratio
    11:26 - Receivables Turnover Ratio
    11:43 - Asset Turnover Ratio
    12:16 - Payables Turnover Ratio
    12:40 - Cash Conversion Cycle
    13:09 - Days Sales of Inventory
    13:43 - Days Sales Outstanding
    14:07 - Days Payable Outstanding
    14:52 - LEVERAGE RATIOS
    - Cheat Sheet: accountingstuff.com/shop/leve...
    15:19 - Debt to Assets Ratio (DTA)
    15:43 - Debt to Equity Ratio (DTE)
    16:39 - Interest Coverage Ratio
    17:03 - Debt Service Coverage Ratio (DSCR)
    17:56 - PRICE RATIOS
    - Cheat Sheet: accountingstuff.com/shop/pric...
    18:26 - Earnings Per Share (EPS)
    19:27 - Price-To-Earnings Ratio (P/E Ratio)
    20:19 - Price/Earnings-To-Growth Ratio (PEG Ratio)
    21:17 - Dividends Per Share (DPS)
    22:04 - Dividend Yield Ratio
    22:30 - Dividend Payout Ratio
    22:59 - FINANCIAL RATIOS MIND MAP
    🔎FAQ
    ▪ My Favourite Accounting Book for Beginners → geni.us/5mKR7m
    🎬LEARN ACCOUNTING BASICS FOR FREE
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    ________________________
    DISCLAIMER
    Some of the links above are affiliate links, where I earn a small commission if you click on the link and purchase an item. You are not obligated to do so, but it does help fund these videos in hopes of bringing value to you!
    ________________________
    #accounting #financialratios #accountingstuff

КОМЕНТАРІ • 457

  • @ibrahimalbaz2595
    @ibrahimalbaz2595 Місяць тому +23

    I swear, these kind of videos that make me believe that university education is useless, whenever there is Monopoly in any field, the quality always go down, thats the thing about internet, the professor at the university, cannot get fired nor someone else takes his place, unlike in the internet, if you wanna make money, you gotta provide something special.

    • @AccountingStuff
      @AccountingStuff  Місяць тому +3

      Glad to hear you found this one useful!

    • @user-nb2yt3pr6v
      @user-nb2yt3pr6v Місяць тому

      Turnover Ratios are wrong!!! WTF i believed in it. Fuck UA-cam, open books guys!

    • @danishahmed4005
      @danishahmed4005 15 днів тому

      @Ibrahim. Agreed video is excellent. But our teachers are also excellent. The video came through also by learning only

  • @amandakarl7223
    @amandakarl7223 Рік тому +180

    I hope you know you are basically my accounting 101 professor. My TESU professor just links all your videos in our class materials and it's up to your videos and the book to learn everything. You are doing amazing work and helping me so much!

  • @MeghanSandbeck
    @MeghanSandbeck Рік тому +58

    Your videos are the reason I am passing my Introduction to Financial Accounting course.
    I have realized that I learn best by understanding the big picture, and THEN learning the steps which is not the way my textbooks are written, but it is the way you explain the concepts. You're the hero all of us accounting students didn't know we needed. Thank you!

    • @UmarA2203
      @UmarA2203 18 днів тому

      got my Intro to fin. accounting final exam on Monday

  • @TuneActive
    @TuneActive Рік тому +23

    Words cannot express how grateful I am for your course, thank you James

  • @angelnicoleorias8199
    @angelnicoleorias8199 Рік тому +9

    thank you so much for this video! i have to memorize around 40 ratios for our midterm exams, and this video helped me tick 26 of them! i love how you grouped the ratios, which made memorizing the formulas a loooot easier, explained what these formulas stand for, their relevance. so happy i came by this vid. it helped me a lot! i've also been sending my classmates this video!

  • @mohamedgamal9903
    @mohamedgamal9903 Рік тому +3

    What a great video !! I needed this video since long time and I really wanted to learn this ratios from you .. you got your special way to learn others .. you are really talented ... thanks alot ❤️
    I hope you start your costing and budgeting videos that would be great 👌🏻

  • @graywilliams_77.
    @graywilliams_77. 11 місяців тому +184

    To achieve greatness, you need to start working with a Financial Advisor. Investing remains the smartest way to prepare for the future.Have been working with ROCHELLE DUNGCA-SCHREIBER for 8years and I'm extremely pleased with the good returns. The good news is, it's never too late to start investing.

    • @graywilliams_77.
      @graywilliams_77. 11 місяців тому

      Credits to ROCHELLE DUNGCA-SCHREIBER, she saw me through the process. You can glance her name up on your google and verify her yourself. she has years of financial market experience...

  • @sohailmallick009
    @sohailmallick009 7 місяців тому +10

    This is the most comprehensive, complete and concise video available on financial ratios.....it is my go-to video any time I want to revise my concepts.

  • @ernieaguilera1272
    @ernieaguilera1272 Рік тому +2

    Brilliant and Beautiful Financial Control Systems. Thanks for posting!

  • @ChhumSoklin-pk4qy
    @ChhumSoklin-pk4qy Рік тому +1

    I really love your explanation. Your video is amazing. It makes me understand and memorize the lesson quickly. Hope to see your new video soon.

  • @KeshawKSinha
    @KeshawKSinha Рік тому +1

    the way explain is awesome. Even many big shot professors are not able to make simplify as you do.

  • @monah2030
    @monah2030 Рік тому +15

    James! You won’t believe how happy I am to see you ! I had a terrible day and you changed my mood a lot ! Please, please visit us more often! You are amazing 😀 excellent lessons as always.

    • @AccountingStuff
      @AccountingStuff  Рік тому +2

      Thanks Mona, sorry to hear you had a bad day. All the best!

  • @theguywith
    @theguywith Рік тому

    Really immaculate with your statements. True to the way of accounting stuff. I have to catch up on quite a few videos now!

  • @camillaszymanowska1632
    @camillaszymanowska1632 Рік тому +1

    These videos are so helpful. Would love some more on gearing and gearing ratios!

  • @bronnies007
    @bronnies007 Рік тому +5

    2 years off as an accountant and your videos help me refresh my memory, thank you so much james

  • @asfandyar374
    @asfandyar374 9 місяців тому +1

    This is by far the best video on financial ratios I have EVER seen.
    Splendid work👏👏👏

  • @MrPushupp
    @MrPushupp Рік тому +1

    wow wow wow this video was packed full of it, just got done making falsh cards of these all so i can lopok at them on the go and such. Thanks for the video!

  • @youtubecommentrater3379
    @youtubecommentrater3379 Рік тому +2

    You are needed...this video was needed champ! We might not deserve you but Thank You my boy 💎

  • @Uddhav05
    @Uddhav05 Рік тому +1

    Great videos and has helped me (a non finance guy) understand the concepts much better now. Is it possible for you to share some references or sources too in description that will help us further?

  • @jennifermertz2812
    @jennifermertz2812 10 днів тому

    Thank you. I'm a little late discovering your video but they still helped. I'd been struggling at work with profit margins and turnover ratios as no one had ever explained how and where to get the information. The AP/AR turnover ratio was exactly what I needed to know to give better answers to my boss. So, thank you.

  • @happycrabknits9109
    @happycrabknits9109 Рік тому

    Thanks!!! This is a great refresher

  • @laurademaio5894
    @laurademaio5894 4 місяці тому +1

    Thank you for this incredibly understandable video that helped me complete a financial analysis project I first found daunting with ease!

  • @foolonamoon
    @foolonamoon Рік тому

    This is good information. Thank you for making it available.

  • @aasthavijay
    @aasthavijay Місяць тому

    This is one of the most useful, crisp video on Fin ratios!

  • @descraker
    @descraker Рік тому +3

    love your work man and as an appreciation I purchased all the sheet even though am here only for general knowledge. amazing work that is helping big group of people of different generations/parts of the work ,,, all the best keep it up

  • @checkdown3774
    @checkdown3774 Рік тому +3

    Loved all your accounting videos mr. James. I've moved more into finance and I'm jack to the t its to see you made a video on statements.

  • @Disrespectedits
    @Disrespectedits Рік тому +1

    Started watching your videos and I am already a fan, please keep up the quality content. 🙏

  • @archanak3340
    @archanak3340 Рік тому +3

    Hi James, I recently came across your channel and loved your videos!! Big thank you for making them. Would you please make some videos explaining basic mobth end processes and secondary balance accounting such as BS reclass, funding, cost of carry etc??
    Thanks.

  • @Agaettis
    @Agaettis Рік тому

    Thank you. My current Business class basically just leaves us to read the chapter and take a test, I couldnt understand until I watched this

  • @IsabelRodriguez-nv2ue
    @IsabelRodriguez-nv2ue Рік тому +1

    Thank you very much for creating this fantastic, amazing and formidable video!!!!! Super well explained and organized!!! It is a real treasure! Thanks!!!!

  • @jolly110383
    @jolly110383 Рік тому

    This is just AWESOME :) Thank you!

  • @Princesscolex
    @Princesscolex Рік тому +1

    Thank you so much for all of your videos. This is better than Becker in my opinion.

  • @thelibrarian2189
    @thelibrarian2189 Рік тому +1

    Absolutely helpful! Thank you! Please consider making a video on Pro Forma statements 💪🔝🔝

  • @zhongyiwo9738
    @zhongyiwo9738 Рік тому

    thank you. you saved my accounting course

  • @darkmankind
    @darkmankind 7 місяців тому

    Thanks for the video. You just helped me pass my last financial analysist assignment and provided a great cheat sheets. I am a subscriber.

    • @AccountingStuff
      @AccountingStuff  7 місяців тому

      Congrats on passing your assignment!! All the best

  • @waibosibili8546
    @waibosibili8546 11 місяців тому

    Thanks for the much needed information ❤

  • @chibuezedaike9331
    @chibuezedaike9331 Рік тому +2

    You are simply the best James, you are good at what you do, Gracias,

  • @tataforever724
    @tataforever724 Рік тому

    Very well explain and easy to understand it.

  • @hisokaamorou4211
    @hisokaamorou4211 Рік тому

    Great video for finance and accounting students

  • @montanaHE
    @montanaHE Рік тому +2

    Your video taught me more in 25 min, than my high school did in 4 years.

  • @kishoremohan6462
    @kishoremohan6462 Рік тому

    Omg , I was waiting for this video & your videos are very vivid & easy to understand. Thanks a million for the videos so far. I’m learning & I’m going to apply for jobs ( Assistant accountant, finance intern & accounts payable)

  • @iamfabgirl7820
    @iamfabgirl7820 Рік тому +14

    Hey James!
    I've been watching these accounting videos of yours from a long time now, and I've been really liking them. I want you to make some videos on the following topics (please as a request).
    1. Books of original entry
    2. Cashbook
    3. Adjusted Cashbook
    4. Capital & revenue expenses & incomes
    5. Receipts
    6. Control accounts
    7. Source Documents
    8. Errors
    I am requesting you as I really have understood all the topics only from your videos.
    P.S: I have my CAIE's so I really want help.
    Thank you! 0:38

  • @kampambamubanga3810
    @kampambamubanga3810 Рік тому

    Watching from Zambia and your channel has always been helpful. Thank you and keep up with the excellent content.

  • @denconstutube
    @denconstutube 2 місяці тому

    Excellent video. You have covered so much in a short video. Well explained and easy to follow and learn. Thank you.

  • @SONUKUMAR-qv6jm
    @SONUKUMAR-qv6jm Рік тому

    Fabulous the way you taught It is mind blowing and I am dam sure that It will help me allot. THANKU SO MUCH

  • @mahnoortufail3427
    @mahnoortufail3427 Рік тому +1

    I waited soo long for your updates
    Please upload frequently it is of great help

  • @jason16392
    @jason16392 Рік тому +1

    Hi James,
    I love your videos, they help me so much!.
    Please can you make some videos about auditing.?

  • @sameha.mosaicart7136
    @sameha.mosaicart7136 11 місяців тому

    Thank you , great one ❤God bless you

  • @David-jv7ot
    @David-jv7ot Рік тому

    This is beautiful and simple and wonderful and so well delivered

  • @TerryCollinsP31Lifestyle
    @TerryCollinsP31Lifestyle 6 місяців тому

    WOW!!! You are really good at explaining this.

  • @samysr9610
    @samysr9610 11 місяців тому

    You a professional person who dip him self over long time on financial analysis

  • @analizazara62
    @analizazara62 2 місяці тому

    Thank you! Well explaned and easy to understand.

  • @teacherrussell5206
    @teacherrussell5206 Рік тому

    VERY USEFUL VIDEO!!!

  • @zoeskee1199
    @zoeskee1199 Рік тому +3

    Very informative. Thanks for sharing.

  • @SpecialKtoday
    @SpecialKtoday Рік тому +1

    Brilliant video! Thanks James :)

  • @scholarshuvo4221
    @scholarshuvo4221 10 днів тому

    your contents is life-saving for accounting students. Thanks a lot. Appreciation from Bangladesh 🇧🇩

  • @syahirfawwazmohdsofian6441
    @syahirfawwazmohdsofian6441 Рік тому

    Thank you James. Ure the best. Help me out till i graduate

  • @mahssaahi8084
    @mahssaahi8084 7 місяців тому

    I really appreciate you for providing such useful stuff.🙏

  • @unclesly2465
    @unclesly2465 Рік тому +2

    thank your so much mate, you ability to semplify things is nuts

  • @deepalibagga1902
    @deepalibagga1902 8 місяців тому

    amazingly summarized! thank you!

  • @TerryCollinsP31Lifestyle
    @TerryCollinsP31Lifestyle 6 місяців тому +1

    Good Morning James,
    Thanks for doing this video.

  • @user-vg7hw4qm8i
    @user-vg7hw4qm8i 8 місяців тому

    amazing video, visualized each concept. lovely.

  • @SharibJameel0
    @SharibJameel0 9 місяців тому

    Thank you so much for this. This was such a big help

  • @sayedhussainmuhabat813
    @sayedhussainmuhabat813 Рік тому +1

    Hi James,
    I learned so many things from your videos. Thank you!
    Could you please explain budget and types of budget?

  • @uptown7930
    @uptown7930 6 місяців тому

    You are an amazing Teacher Man. Keep up the good work

  • @Adelade500
    @Adelade500 Місяць тому +1

    Thank you very much for this... excellent work

  • @user-en7wl8rc7h
    @user-en7wl8rc7h 11 місяців тому

    That is perfect,thanks bro.

  • @kanikamaheshwari9732
    @kanikamaheshwari9732 11 місяців тому

    What I am gonna write is not a new compliment to this on any other video on this channel. However, here it goes.
    So, I think this channel needs to be mandatory in schools & teachers are not needed thank you😛
    Also, I seriously regret not having UA-cam back then growing up. Its just so easy. You can pause, play, take notes and at the same time look for meanings & clarifications on a certain topic.
    You are making lives of students & professionals not just easy but also smart.
    Thanks a ton for existing......🥰

  • @tumelochepete2360
    @tumelochepete2360 9 місяців тому

    You’re awesome man, thank you for your videos.

  • @cigartrend
    @cigartrend 11 місяців тому

    was really helpful thanks

  • @mohamedeassa
    @mohamedeassa Рік тому +2

    Thanks for the amazing content.
    Keep it up

  • @alexandervalladares2501
    @alexandervalladares2501 3 місяці тому

    This video was amazing … Thank you so much.

  • @danielpalmer8156
    @danielpalmer8156 Рік тому

    Holy shit batman this is gold. Thank you for this video I was trying to find a UA-cam channel I could understand and many are way too hard to follow what they are saying.

  • @michlmyez6650
    @michlmyez6650 Рік тому +1

    This video was so useful
    Thank you so much
    Best of luck 💎♥️👍

  • @europaexplorer1
    @europaexplorer1 Рік тому

    Love this!

  • @clarityadvisor8776
    @clarityadvisor8776 Рік тому +1

    Amazing Content with beautiful Slideshow, James! I am wondering which software you use to record the video, specifically the map?? Thank you

  • @nicholasiezzi9790
    @nicholasiezzi9790 Рік тому +2

    I can't wait to take accounting next quarter. I just finished macroeconomics. I hear everything is backwards in accounting though. I go to school for business we have to take accounting 1 and 2

  • @EstebanFernandezYT
    @EstebanFernandezYT 21 день тому

    thanks a lot man, this was a very useful video

  • @kep_un_blishen
    @kep_un_blishen 2 місяці тому

    3hrs to exam and am here learning the whole semester, thanks so much this content is wonderful and I just happened to understand, your a good teacher

  • @txin999
    @txin999 Рік тому

    By the time I reached dividend payout ratio, my brain melted :') But thank you for this, James!

  • @sk.jahirulislam1921
    @sk.jahirulislam1921 Рік тому

    Great job! Keep it up .

  • @abdul8236
    @abdul8236 Рік тому +1

    Thank you James. It is clear and precise.
    Could you make a video on Intercompany accounting and transaction elimination

  • @dennisleka4346
    @dennisleka4346 Рік тому

    Amazing how you simplified Ratios in just 25 minutes

  • @mmashar6809
    @mmashar6809 Рік тому +1

    Thanx bro i literally needed to learn this for exam

  • @thinkusaarabic
    @thinkusaarabic 11 місяців тому

    Best accounting videos ❤❤❤

  • @yaren9519
    @yaren9519 9 місяців тому

    Hello,
    Thank you for the clear explanations! I had a question about ROA. In the video it is stated simply as the ratio of net income to total average assets. In my textbook, we saw it as ROA = EWI / Average Total Assets, where EWI is: EWI = Net Income + Interest Expense (1 - tax rate). I'm wondering which one is actually used in accounting in companies. Does it differ? Which one would you say is more correct or reliable? Thank you.

  • @MrVeer58
    @MrVeer58 9 місяців тому

    Thanks for the nice video.
    Kindly clarify - capital employed ignores long term debt or short term debt ?

  • @oumaymaelammari4180
    @oumaymaelammari4180 Рік тому

    This is gold for a student

  • @masoodahmed6579
    @masoodahmed6579 9 місяців тому

    Simply outstanding.

  • @thinkusaarabic
    @thinkusaarabic Рік тому

    Thanks 🙏 so happy 😀

  • @count9548
    @count9548 5 місяців тому

    Amazing lesson!

  • @healthvsfatigue9147
    @healthvsfatigue9147 Рік тому +1

    Hi tuned into your channel before covid, incredible contribution and needed. Can you cover cost modelling please

  • @ezekielmwebaze1423
    @ezekielmwebaze1423 4 місяці тому

    Great topic, thank you sir

  • @syahiranajihaibrahim2190
    @syahiranajihaibrahim2190 Рік тому

    YOU ARE AMAZING!!!!

  • @phenyomatjila6900
    @phenyomatjila6900 7 місяців тому

    I read 3 days from Gitt, and you just me understand everything in less than 25mins🔥🔥🔥

  • @angeliakoim4626
    @angeliakoim4626 9 місяців тому

    Thank you ...very informative

  • @vamp9750
    @vamp9750 Рік тому

    thanks man that's great the most used ratio in an easy why to get
    really you are amazing

  • @flohello4920
    @flohello4920 Рік тому

    Jesus James, took u a while to come back. pls never leave us like that :D

  • @chibuezedaike9331
    @chibuezedaike9331 Рік тому +3

    A topic on intercompany accounting and related party transactions would be really nice

  • @MrDCD007
    @MrDCD007 Рік тому +1

    Hi james thanks for this knowledge