Ratio Analysis

Ratios used in financial analysis compare companies to or within an industry. We have listed groups of commonly used ratios with links to examples, explanations, and formulas. Continue reading

Inventory Turnover Ratio

The inventory turnover ratio compares sales to inventories, reflecting a company’s ability to convert inventory into cash. This interactive tutorial walks you through the calculations, and shows you where to find the numbers of your financial statements. Continue reading

Return on Assets Du Pont

Return on assets (ROA) is a percentage of the after-tax income as compared to the total assets of the company. Management at Du Pont came up with Return on Assets (Du Pont), an approach that determines the impact of asset turnover and profit margin on profits. This interactive tutorial explains the concept by walking you through the calculations, including where to find the numbers on the financial statements. Continue reading