Segments in this Video

Ratio Analysis Overview (03:03)

FREE PREVIEW

Financial ratios are used to evaluate trends, determine business health, and serve as performance indicators. The current, quick, inventory turnover, debt to equity, return on equity, and net profit margin ratios are calculated monthly, quarterly, and at year end.

Current Ratio (02:54)

Current ratios determine whether a business can pay its debts. It's calculated by dividing current assets by current liabilities; view a sample calculation for a restaurant. Creditors look for a ratio of 2.0 or above.

Quick Ratio (01:32)

Quick ratios determine whether assets can be quickly converted to cash to pay debts. View a sample calculation for a restaurant. A ratio of 1.0 or higher is acceptable.

Inventory Turnover Ratio (02:21)

Inventory turnover ratios indicate how many times a business can sell and replace its inventory over a time period. View a sample calculation for a restaurant; compare to industry standards to determine business health.

Debt to Equity Ratio (02:23)

The debt to equity ratio shows the proportion of equity and debt used to fund assets and is calculated by dividing total liabilities by owner's equity. View a sample calculation for a restaurant and hear acceptable ranges for different industries.

Return on Equity Ratio (01:50)

The return on equity ratio indicates business profitability, and is calculated by dividing net income by owner's equity. View a sample calculation for a restaurant and hear acceptable percentages.

Net Profit Margin Ratio (01:53)

The net profit margin ratio shows how efficient a business is at cost control and is calculated by dividing net income by net sales revenue. View a sample calculation for a restaurant. Compare with industry standards to determine true profitability.

Ratio Analysis Summary (01:37)

Ratio analysis helps determine business health and performance, and can be used to show changes over time. Creditors and investors use ratio analysis to decide whether a business is capable of taking on more debt.

Credits: Ratio Analysis: Business Finance Essentials (01:03)

Credits: Ratio Analysis: Business Finance Essentials

For additional digital leasing and purchase options contact a media consultant at 800-257-5126
(press option 3) or sales@films.com.

Ratio Analysis: Business Finance Essentials

Part of the Series : Business Finance Essentials
DVD (Chaptered) Price: $129.95
DVD + 3-Year Streaming Price: $194.93
3-Year Streaming Price: $129.95

Share

Description

You can’t build a house without the right measuring tools to ensure that the structure is sound and won’t collapse: tape measures, protractors and levels are used to tell construction workers and architects how much material is needed and where everything goes. In the business world, the measuring tools are called financial ratios, and they help you evaluate a financial statement. By learning how to calculate and analyze specific ratios, you can evaluate trends, determine how healthy a business is, and have key indicators as to how the business is performing. They also allow you to make financial comparisons between companies. This video covers the ratios most commonly used to analyze a business. A coproduction of Films for the Humanities & Sciences and MotionMasters.

Length: 19 minutes

Item#: FMK93897

ISBN: 978-1-60057-901-1

Copyright date: ©2015

Closed Captioned

Performance Rights

Prices include public performance rights.

Not available to Home Video customers.


Other Titles You Might Like

Share