Ratio Analysis Mastery : From Exam to Execution - English

The course begins with an introduction to financial statement analysis, laying a solid foundation for understanding the key concepts that drive financial performance evaluation. In this lecture, students will explore the purpose and importance of financial statement analysis, gain a clear understanding of the income statement, and learn how to interpret comparative financial statements. The lecture also introduces the concept of ratios and explains how they serve as essential tools in assessing a company’s financial health. Practical examples and case discussions make this an engaging start to the course.

In the second lecture, students are introduced to liquidity ratios — one of the most important aspects of short-term financial analysis. The session covers the current ratio, quick ratio, and cash ratio in detail, along with working capital analysis. Through examples and problem-solving exercises, learners will understand how these ratios indicate a company’s ability to meet its short-term obligations. The lecture concludes with practice questions that reinforce the analytical and interpretive skills necessary for the CMA exam and real-world application.

The next part of the course dives into leverage ratios, where students will learn how financial leverage impacts risk and return. The third lecture explains key leverage ratios such as the debt ratio, debt-to-equity ratio, and other related measures used to evaluate a company’s capital structure. This is followed by an in-depth exploration of leverage indices and solvency ratios in Lecture 4. Here, learners will understand the leverage index and multiplier, and explore concepts such as capital structure and solvency analysis using ratios like the debt service coverage ratio and interest coverage ratio. Real-life examples and guided practice problems help learners connect theoretical concepts with practical financial decision-making.

1. Leverage Index and Multiplier

2. Capital Structure Overview

3. Solvency Ratios: Debt Service Coverage, Interest Coverage

4. Practical Examples and Practice Questions

Lecture 4 introduces students to earnings coverage and activity ratios, expanding their understanding of how effectively a company utilizes its resources. The lecture covers important ratios such as times interest earned, fixed charge coverage, inventory turnover, receivable turnover, and payable turnover. Each concept is explained with clarity and illustrated through examples, allowing learners to assess operational efficiency and financial stability. The lecture concludes with a set of practice questions to ensure students can confidently apply their learning.

The next section shifts focus to profitability ratios, one of the most crucial components of financial statement analysis. Lecture 6 introduces turnover ratios such as asset turnover and capital employed turnover before transitioning into key profitability ratios like gross profit margin, operating profit margin, and net profit margin. Students will gain insight into how profitability ratios reflect business performance and shareholder value creation. In Lecture 7, the discussion continues with return-based ratios such as return on assets (ROA), return on equity (ROE), and return on investment (ROI). The session includes guided examples and practice questions that strengthen understanding through applied problem-solving.

1. Return Ratios: ROA, ROE, ROI, and Margin Analysis

2. Practice Questions and Interpretation

This lecture introduces the concept of earnings per share (EPS), beginning with basic EPS calculations and moving toward a detailed explanation of diluted EPS. Students will also learn how stock options, convertible securities, and other instruments affect dilution. Lecture builds on this foundation by explaining the calculation of EPS dilution and anti-dilution, along with disclosure requirements under IFRS and US GAAP.

1. Calculation of EPS Dilution and Anti-Dilution Scenarios

2. Disclosure Requirements under IFRS and US GAAP

3. Other Profitability Ratios

4. Relationship Among Ratios and DuPont Analysis

5. Residual Topics and Practical Examples