Financial Ratios
About Financial Ratios
Financial ratios give business owners a means to assess their company's performance and contrast it with that of other companies in the same sector. Ratios assess the connection between two or more financial statement elements. When data from many time periods are compared, they are most useful.
There are several standard ratios that are frequently used in accounting to assess the overall financial health of a firm or other entity.
Financial ratios has gained immense popularity across the globe resulting in huge demand for certified professionals.
Who should take the Financial Ratios Exam?
- Finance managers, senior executives, executives
- Anyone looking for finance jobs.
- Student pursuing courses like CA, CFA,CPA, ACCA, CIMA, MBA Finance or Finance Graduate
- Investment Professional /Banker
- Small and medium business owner
- Startup founder or retail investor
Skills Required
- Basic Accounting Knowledge
- Mathematical & Analytical Skills
- Understanding of Financial Ratios
- Financial Statement Analysis
- Critical Thinking & Business Judgment
Financial Ratios Certification Course Outline
Module 1: Introduction to Financial Ratios
- What are financial ratios and why are they important?
- Overview of ratio categories
- How ratios support business and investment decisions
- Limitations and best practices in using ratios
Module 2: Reviewing Financial Statements
- Structure and key components of the income statement
- Understanding the balance sheet and cash flow statement
- Extracting relevant data for ratio analysis
- Common adjustments and normalization practices
Module 3: Liquidity Ratios
- Current Ratio
- Quick Ratio (Acid-Test)
- Working Capital
- What liquidity ratios reveal about short-term financial health
- Sample scenarios and calculations
Module 4: Profitability Ratios
- Gross Profit Margin
- Operating Profit Margin (EBIT Margin)
- Net Profit Margin
- Return on Assets (ROA)
- Return on Equity (ROE)
- Assessing operational performance using profitability ratios
Module 5: Solvency (Leverage) Ratios
- Debt-to-Equity Ratio
- Debt Ratio
- Interest Coverage Ratio (Times Interest Earned)
- Implications for long-term financial stability and risk
- Case study: Assessing solvency in a debt-heavy company
Module 6: Efficiency (Activity) Ratios
- Inventory Turnover
- Accounts Receivable Turnover
- Asset Turnover Ratio
- Days Sales Outstanding (DSO)
- Measuring how well a company uses its assets
Module 7: Market Valuation Ratios (For Public Companies)
- Price-to-Earnings (P/E) Ratio
- Price-to-Book (P/B) Ratio
- Earnings Per Share (EPS)
- Dividend Yield and Payout Ratios
- Market-based evaluation of company value and performance
Module 8: Interpreting and Comparing Ratios
- Benchmarking: industry standards and competitors
- Trend analysis: comparing ratios over time
- Identifying strengths, weaknesses, and warning signs
- Ratio analysis for strategic decision-making
Module 9: Real-World Ratio Analysis Exercises
- Analyzing real or mock company data
- Applying multiple ratios to assess performance
- Writing brief reports summarizing financial health
- Hands-on Excel-based calculation practice
Module 10: Practice Exam & Final Assessment
- Section A: Multiple choice questions on formulas and theory
- Section B: Data interpretation based on financial statements
- Section C: Ratio calculations with analysis questions
- Section D: Case study with full company ratio assessment
- Scoring feedback and review session
Exam Format and Information
- Certification name – Certificate in Financial Ratios
- Exam duration – 60 minutes
- Exam type - Multiple Choice Questions
- Eligibility / pre-requisite - None
- Exam language - English
- Exam format - Online
- Passing score - 25
- Exam Fees - INR 1199