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# Decision-Making using Financial Ratios

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Langue:  English
The simplest guide in calculating, interpreting and analysing financial ratios. Suitable for students at all levels and beginners in Accounting; you’ll improve your grades in just 7 days.
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Ever been asked to analyse the performance of a big company and given long lists of financial figures, finding it hard to interpret them? Well, here is a step-by-step guide designed to simplify the calculation, interpretation and implementation of financial ratios in major decision-making situations. This volume uses simple equations, definitions, formulas and thorough explanations on how financial data can be turned into easily understandable ratios. Go through the definitions and examples herein and you will see the improvement in your marks in just 7 days!

Mqondisi Bhebhe is an academic, a Management graduate and published author in various disciplines, but with more emphasis on Academic Writing skills and Business/Economics. He has been, and still is, teaching at tertiary level and enjoys sharing his knowledge and experience with readers from all over the world. This is the third of the five upcoming editions of the ‘simplified’ series, with the first two already published. From the author of the Human Resource Management Solutions Textbook and the Academic Writing Guide for University Students, here is another comprehensive but simplified guide to using financial ratios in a practical setup, aiming to make studying easier for you. Please enjoy this work and look out for the next volumes.

1. Introduction
1. The Accounting cycle
2. The balancing game
3. Users of Financial Ratios
4. Types of Financial statements used for ratio analysis
6. Main classes of Financial Ratios
2. Profitability Ratios
1. Chapter focus
2. Retention Rate
3. Return on Assets Ratio
4. Times Interest Earned Ratio
5. Return on Equity Ratio
6. Return on sales ratio
7. Operating Margin Ratio
8. Net Profit Ratio (N.P.R)
9. Operating Ratio
10. Share price to earnings ratio
11. Share Earning-Price Ratio
12. Dividend Payout Ratio
13. Earnings per Share
14. Ways to Improve Profitability
15. Limitations of Profitability ratios
3. Debt and Risk Ratios
1. Chapter focus
2. The Importance of Calculating Solvency
3. Repayment Capacity
4. Debt Service Coverage Ratio
5. Proprietary Ratio
6. Fixed Assets turnover Ratio
7. Current Assets to Shareholders’ funds
8. Capital Gearing Ratio
9. Debt to Equity Ratio
10. Total Debt to Assets
11. Interest Coverage Ratio
12. How To Improve Solvency
13. Limitations of solvency ratios
4. Liquidity Ratios
1. Chapter focus
2. Signs of liquidity problems
3. Liquidity Ratios
4. Doubtful Debt Percentage
5. Collections percentage of Net Revenue
6. Days Cash on Hand
7. Days in Accounts Receivable
8. Average Payment Period
9. Inventory Turnover Ratio
10. Working Capital to Sales
11. Days Sales Outstanding Ratio
12. Days Sales in Inventory
13. Cash Ratio
14. How to Imrpove Liquidity
15. Limitations of liquidity ratios
5. Efficiency Ratios
1. Chapter focus
2. Signs of Efficiency problems
3. Efficiency Ratios
4. Operating expense ratio
5. Operating Expenses to Sales
6. Debtors/Receivables Turnover Ratio
7. Fixed Assets Turnover Ratio
8. Total Assets Turnover Ratio
9. Total Assets to Sales
10. Labor to Net Sales Ratio
11. Accounts payable turnover ratio
12. How to Improve Efficiency 81
13. Limitations of Efficiency Ratios
6. Activities and Analysis
1. Question 1
2. Worked solution
3. Question 2
4. Worked solution
• Summary
• Conclusion: Limitations of financial ratios
• Reference List