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Fundamental Analysis of Financial Statements: Concepts, Ratios, and Applications

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Common-sized Statements

Ratios: Working Capital and the Current Ratio

Ratios: Quick (Acid Test) Ratio

Ratios: Average Collection Period (Days Sales Outstanding)

Ratios: Inventory Turnover

Ratios: Accounts Receivable (AR) Turnover

Ratios: Debt to Asset Ratio

Ratios: Times Interest Earned (TIE)

Ratios: Return on Equity (ROE)

Ratios: DuPont Model for Return on Equity (ROE)

The Financial Statements