🎃
financial statement analysis
🥷 carbon emissions write up
🏼
textbook readings
notes
lecture 1:
introduction and welcome to the course
lecture 2: how to tackle ratio analysis in a real company context
overall performance ratios
return on shareholders equity (rose)
looks at performance from shareholders’ perspectives/interest
net profit/loss after interest and tax (also shown as profit/loss for the period)
ordinary share capital + reserves %
return on assets (roa)
simple version
net profit after interest and tax
financial statement analysis 1
, total assets %
operating return on assets (operating roa)
looks at managerial performance
operating profit
total assets %
let’s calculate rose and operating roa for shell
we need pre interest and tax profit for roa and post tax profit for rose
> consolidated income statement
we need total assets for operating roa and total equity for rose
> consolidated balance sheet
financial statement analysis 2
, calculations of rose and operating roa
profit ratios
financial statement analysis 3
, operating profit margin
operating profit (profit/earnings before interest and tax)
sales %
gross profit ratio
gross profit
sales %
net profit margin
net profit after interest and tax
sales %
distribution costs as a percentage of sales
administrative expenses as a percentage of sales
other relationships as relevant to the business being analysed
EBITDA
many companies use EBITDA as an alternative for income
it stands for earnings before interest, tax, depreciation, amortisation
companies with high levels of non current assets, particularly intangible assets,
like to use EBITDA to assess their performance because it takes out the
accounting effect of servicing capital
efficiency ratios
look at the efficiency with which assets have been utilised to generate income
asset turnover
sales; total assets (as used in roa)
sales
total assets times
sales: non current assets
financial statement analysis 4
financial statement analysis
🥷 carbon emissions write up
🏼
textbook readings
notes
lecture 1:
introduction and welcome to the course
lecture 2: how to tackle ratio analysis in a real company context
overall performance ratios
return on shareholders equity (rose)
looks at performance from shareholders’ perspectives/interest
net profit/loss after interest and tax (also shown as profit/loss for the period)
ordinary share capital + reserves %
return on assets (roa)
simple version
net profit after interest and tax
financial statement analysis 1
, total assets %
operating return on assets (operating roa)
looks at managerial performance
operating profit
total assets %
let’s calculate rose and operating roa for shell
we need pre interest and tax profit for roa and post tax profit for rose
> consolidated income statement
we need total assets for operating roa and total equity for rose
> consolidated balance sheet
financial statement analysis 2
, calculations of rose and operating roa
profit ratios
financial statement analysis 3
, operating profit margin
operating profit (profit/earnings before interest and tax)
sales %
gross profit ratio
gross profit
sales %
net profit margin
net profit after interest and tax
sales %
distribution costs as a percentage of sales
administrative expenses as a percentage of sales
other relationships as relevant to the business being analysed
EBITDA
many companies use EBITDA as an alternative for income
it stands for earnings before interest, tax, depreciation, amortisation
companies with high levels of non current assets, particularly intangible assets,
like to use EBITDA to assess their performance because it takes out the
accounting effect of servicing capital
efficiency ratios
look at the efficiency with which assets have been utilised to generate income
asset turnover
sales; total assets (as used in roa)
sales
total assets times
sales: non current assets
financial statement analysis 4
