Financial Ratios Using Excel

Explore the Excel interface, from the quick access toolbar and file tab to the Home ribbon and its groups, and learn to manage multiple spreadsheets, rename sheets, and adjust zoom.

Enter text and numbers in a worksheet, edit with the formula bar. Format as accounting, center and merge cells, and build a balance sheet with assets, liabilities, and equity.

Format cells to accounting and set decimals, and use format painter to copy formatting. Enter formulas with = to verify assets = liabilities + stockholders' equity, using +, -, *, /.

Learn to format financial data in Excel with accounting formatting, adjust decimals, calculate net profit margin by dividing net income by sales, and use drag fill to copy formulas.

Learn to create and customize charts in Excel, including inserting a two-column chart, adjusting the axis to millions, and using spark lines to reveal trends.

Learn how to retrieve and organize income statement, balance sheet, and cash flow data from Google Finance, copy into Excel, clean and normalize numbers, and prepare for financial ratio analysis.

Explore the five key financial ratios: liquidity, efficiency, leverage, coverage, and profitability, and learn how each reveals a company’s ability to meet obligations, invest, finance, and profit.

Compute and interpret the current ratio by dividing current assets by current liabilities, analyze year-by-year trends, and discuss creditor versus investor perspectives on liquidity.

Learn how the quick ratio refines liquidity analysis by excluding inventories from current assets, comparing to the current ratio, and interpreting trends and investor versus creator perspectives.

Explore the accounts receivable turnover ratio in Excel, interpreting how credit sales relate to accounts receivable and what a higher or lower ratio implies for collections and credit practices.

Calculate the average collection period by dividing accounts receivable by credit sales and using 365 days to express the days to collect. Coca-Cola shows 35 days, compared to industry norms.

Calculate the fixed asset turnover ratio by dividing sales by net fixed assets using Coca-Cola financials, noting that depreciation and asset purchases can tilt the ratio.

Calculate total asset turnover by dividing sales by assets to gauge how efficiently assets generate revenue, noting service companies tend to have higher ratios while utilities have lower ones.

Learn to calculate inventory turnover ratio in Excel using the Coca-Cola financials file, dividing cost of goods sold by inventory to compare annual ratios with industry benchmarks.

Explain how total debt ratio shows how assets are financed by debt, using Coca-Cola as an example to illustrate shifts in capital structure and effects on earnings and tax benefits.

Examine the long-term debt ratio by dividing long-term debt by total assets, revealing a 20.71% leverage level and guiding balance sheet discussions.

Calculate the debt to equity ratio by dividing total debt by total equity, showing how the debt to equity ratio compares and that it has increased.

Learn to compute the long-term debt to equity ratio by dividing long-term debt by total equity, yielding 62 percent, as part of mastering leverage ratios.

Learn how to compute the cash coverage ratio by adding depreciation back to earnings before income taxes to reflect cash available to cover interest, using the cash flow statement.

Learn how to calculate and interpret the times interest ratio in Excel for financial analysis and decision making.

Understand the gross profit margin, defined as gross profit divided by sales, indicating revenue left after cost of goods sold; margin is 61%, leaving about 39% for other expenses.

Analyze the operating profit margin by comparing operating income to sales; observe how the margin declines, signaling potential issues in managing operating expenses.

Compute net profit margin by dividing net income by sales; analyze the decline caused by other expenses despite cost of goods sold remaining steady, and assess what remains for investors.

Explore how return on assets measures investor returns by dividing net income by total assets, and why declines may result from falling net income or rising assets.

Explore how return on equity differs from return on assets and learn to calculate ROE as net income divided by total equity, reflecting stockholder return, and note its decline.

Learn how ratio analysis blends trend analysis with industry averages and annual reports to assess health, considering debt covenants, while building Excel checks with if and current and quick ratios.

Analyze cash flows from operating, investing, and financing activities to assess company health. Learn to interpret inflows and outflows and use scenario comparisons to distinguish growing firms from startups.