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Wonderful…This is a very useful article. Dheeraj it is v. Hi Dheeraj, Great guide! There are a lot of useful things that I learnt from your posts. And the valuation for Alibaba? Thank you!! Sir, Thanks for your explanation , I am new one for your website, could you send excel template please? Hi Dheeraj, Very nice explanations, it is very informative. Hi Dheeraj, very useful article! Could you please email me the Excel file? Hi Dheeraj! I agree with all that this is amazing!

I will share much of this with small business entrepreneurs. I would welcome the excel templates.

Business ratios and formulas

Hi Dheeraj, Thanks for sharing such an awesome explanation Fundamental Analysis. Can you please send me the templates of the same. It looks much better than other similar sites. Could you please email me the excel templates? Hello Mr. Dheeraj You are doing an amazing job Can you please send me the template for this case study, would be thankful. Hello Dheeraj, thanks for your precious help may i ask you to forward me the template of this ratio analysis. Thank so much for the precise write up. I have learnt a lot. I am doing self study and would like to get in to Financial Consultancy.

May you please send the excel templates to my email. Great article and very helpful. I would be very grateful if you could send me the excel file. Can you please send me the Ratio Analysis templates. Good Job…Can you send me templates excel format of these ratio analysis with interpretation. Thanks Mr. Parthasarathy for the encouragement! Please check your email for the ratio analysis files. Pls send to my email too sire Oridamisimike yahoo. Hi Dheeraj, many thanks for the lesson.

Many thanks once again.. Very informative indeed! Thanks, Dheeraj. Hello…Dheeraj…really a very good and interesting article…. Thanks a lot…Have a very nice day…. Many thanks for the free courses and hints. Really helpful and mind blowing. Great material. Please can you send Excell spreadsheets which are editable? Thank you Igor. Your website in the most informative I have found. I want to be a value investor, I have done lots of search but did not find good site to evaluate a stock before I pull the trigger.

I do not understand a company with negative equity, or higher current ratio and the price of the stock is soaring. I see company with higher debt than equity but investor are buying these stocks. How reliable are those ratios found in google finance or many other sites.

Look forward to your comments. We cannot just look at one ratio and then make a judgment on its valuation. Like companies with negative equity or higher current ratio, their other set of fundamental ratios may be sound or it could be that in future there is strong case that they would improve. Valuation should be also reasonable. Google finance and other similar websites do provide data, but I tend to do my own set of calculation. The primary reason is that most database providers have a standard definition of their calculating ratios, whereas, each company may have a different set of reporting financials.

Overall it becomes confusing if I take it from a database. Hi Dheeraj, What u r doing is incredible. Helping students and professionals to reach their goals. I salute u sir. It would be a great help if u can please provide the spread sheet. Hi, Very usefull article Can you please provide me with the Excel templates? Thank you very much! Great works from you. Could you please email me the template so that i can understand this a bit better. Hi Dheeraj good day its amazing Could you please email me the template i already bought the 99 courses online,non of them listing the full ratio analysis thanks.

For calculating debt to equity, numerator should contain only the Debt part. The numerator is actually net debt. In this case, we assume that cash can be used to pay a part of the debt. Hi Mr. Dheeraj, what a great work!!! It would be great if you could send me the excel spreadsheet. Hi Dheeraj, The article mentioned on ratio analysis is very useful and practical. Would really appreciate the career guiding feedback. Hi Pradeep, I think since you are already working with a leading bank in India, guess your work experience and growth within the bank will take you to the higher level.

This is amazing with a lot of simplicity. This content on financial ratios is best I have come through in internet, One thing I did not understand is whats the difference between credit sales and account receivables. Both numbers represent one same thing is that payments would be received by company in future. So what is different. Credit Sales leads to accounts receivables. Accounts receivables is basically a cumulative credit sale which is yet to be recovered to date. Also, assume that none of the credit sales were recovered as cash. Thank you so much for your great effort.

Definitions & Formulas - Financial Ratios - LibGuides at Bentley University Library

I really appreciate the valuable sources that you have shared with us. This blog is incredible, and you are just amazing. By the way, could you please send me the Colgate Ratio Analysis Excel Template both solved and unsolved ones? Again, thank you so much for your contribution and your guidance. Hi, unfortunately, i do not have much material related to CMA Exam. Hi Dheeraj, Can u plz send me financial statement analysis templates as well as working notes. Hi Dheeraj, usefull article and comments. Thank you so much. Have a nice day Dheeraj. Hi Dheeraj, Many thanks for this article! Please share financial analysis solved and unsolved templates.

Good morning Dheeraj, thanks for the great effort you are putting in to help some of us. I would be most grateful if you could send me the templates. HI Dheeraj, thanks very much for this great work, i would be most grateful if you could send me the solved and unsolved template. Dear Dheeraj, Thank you very much for such an extensive guide! Also could you please tell some database where it is possible to find financial statements of the company, if it is not public.

Thank you for your answer in advance. If the company is not public, then very difficult to get the details for free. Great lesson, can you send me solved and unsolved templates. Great work. Please, can you email me the excel template. Thanks a million. It is almost impossible to come across people like yourself who is equipped with greatest knowledge yet so humble and hardworking in sharing this great wealth.

I admire your hardwork and knowledge. You are great. Hellow Dheeraj, Thanks for this tutorial, it is very useful! I would like to know if you have the supporting models too? I did not find them on this page. I would like to have for my own practice and consumption. I will be grateful if you kindly share the solved and unsolved versions of these models. Best regards, Ravi. Have been searching for sth like this for long. This guide is really the most comprehensive. And can I please have the excel template?

This is an excellent tutorial. Very easy to understand and easy to navigate. Thank you for your generosity. Please send me the Excel templates I would really appreciate it. Great work, very useful and explained very succinctly. Please may I have a pdf version of the explanations and interpretation of the ratios? Very much appreciated the commentary etc. Kindly requesting you to e-mail me the Excel templates including calculations please. I had my 1,5y internship at investment banking and your lessons here were more usefull than those over that period.

Many thanks and Congrats for your job that enables us not only to perform better at this industry but also to get a deep joy of doing this job. Hi Dheeraj, very usefull post. To validate them with Excel, would you please send me the file? Have a nice day. This is amazing work. Could you please send the financial analysis template.

Would you have a modeling template too that links all 3 statements or just Income Statement. Thanks for providing this. Please check your email for the same. For the linking of the 3 statements, please check this free financial modeling training colgate case study. Its always a pleasure to visit your site to get some good inspiration on what books to read. Could i request for the financial analysis templates. Hi, Thank you for this tutorial, I find it very useful!

I just would like to ask where is the model have you calculated the ratios? I did not find them anywhere. I wou;d like to make a comparison with mine which I have worked on the unsolved version. And I have some more questions. Hi Mariya, i have sent you both the solved and unsolved excel sheets. Please let me know if you have any questions. Hi Dheeraj : i am a finance professional myself, and i find this outstanding and amazing.

Thank you so much in advance. Hello Dheeraj Vaidya, Undoubtedly, you effort is worth being appreciated. I am not being able to download the templates of financial ratio analysis. Hello Dheeraj, Thank you very much for sharing your research here. Many students like me who have interest in financial modeling get to learn a lot of things from this blog.

But for practice i am unable to download the templates. Can you please send me the templates on my E-mail ID. Excellent post Dheeraj. Kudos to your hard work in educating fellow professionals. Thanks a lot..! Hi George, thanks for the appreciation. I do not have the pdf version.

Dear Dheeraj, Your piece of work is one of the finest, simplest and most comprehensive one. Very easy to understand and apply. Please keep up your good work. Can you please send me the unsolved and solved excel sheet to complete my learning since I am unable to download the same from site. Hello Mr Dheeraj,again amazing work from you. I am student and i want to ask you an analyst question.

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May God bless you!! Hi Dheeraj, Thank you very much for sharing. Could you please send me all the Excel Templates together with pdf to my email. Hello Dheeraj, can you kindly forward me the documents, i will really appreciate it. Tried downloading the files you posted on the site, but its not just downloading. Can u check if Did correct ratio calculations , I can send you my work Interpretation I am learning how to write, if you can , it would be great. Awesome explanation,I must say you have really put in some great effort for explaining jargons of fundamental world.

Thank you so much and look forward to more of knowledge sharing articles from you. It would be great if you can send over templates on my email id. This is fantastic. I remember doing financial modeling module at corporate bridge with you guys. The training modules listed at Wallstreetmojo look interesting. Looking forward for learning some new modules. You need to check the management discussion and analysis section for details of such exceptions items if included. Hi Dheeraj your article was very useful to brush up basics of financial ratios and their applicability.

Please do share Excel templates. Apart from above, Dheeraj i would like to know how can i connect to you for any other future references. Hi Piyush, thanks! You will find my contact details in there. This kingsley from Zambia liked and enjoyed your article. Kindly send me if possible Ratio analysis solved and unsolved. Thanking you in advance. Hi David, thanks! To break into IB, you need to master Excel, accounting, Financial modeling and valuations. If you are relatively new to accounting, a good place to start is this finance for non finance tutorial.

Thereafter, you can pick this Ratio analysis case study to understand the analysis part of accounting. For financial modeling, you can refer to this step by step guide to Financial modeling in excel. Try to practice this too. Nice article, please send me the templates adeniyiasa gmail. Could you plz send me these ratios in Excel formats. I will be very thankful. This page has really been a blessing. You have done a marvellous job! Could you please send me all the excel as well.

The email download buttons seems to have an issue. Hi, useful article. Please send me the excel template at your convenience. Thanks and Best Regards,. Hi Dheeraj, Very useful article. Could you please send to me the financial analysis templates? Really amazing templates will be of great use and benefit to me. Please may you send all templates to me.

Amazing stuff. Can you send me all updated templates along with the financial analysis temp. Thanks again. Hi can you please send me the ratio workbook. I learned a model complete from you and now I model on my own business. Thank you that was really helpful. Excellent, really appreciate the efforts made by Dheeraj Vaidya…. Somehow its not working through download mode.

Hi Dheeraj, usefull article and excellent study. This is a very comprehensive paper. Is this available in word or pdf? Also, can you please share the various excel files. Hi, Could you please send me the templates to my email, and all the ratios , and if can any information related to this subject, its great work thank you Dr. Mohammad Al-Afeef. Hello Dr. Mohammad Al-Afeef, please check your email. Have sent the financial analysis excel sheets. Hi Dheeraj, This is a very useful article and comments. May you please send me the file as I am failing to download.

Amazing explanation Dheeraj. Thank you alot. May i have a copy of the templates plz as well. Many thanks for the wishes Apoorv. Please check your inbox for the templates. Best, Dheeraj. Hello Dagestan, Really insightful work. Please share both templates and guide. Would appreciate such an amazing work on cash flow statement. Will try and make one on the Cash Flow statements too. I have sent the templates to your id.

Thanks Mohammed. I have sent the ratio analysis templates to you. Could you please share with your ratio template? Thank you in advance. Hi Dheeraj, your posts are too good for a beginner to understand. I would like to have the excel template to have more meaningful insight. Your posts helps me alot and keep up your good work.. Good Day. Hi Dheeraj, you are really helping the financial aspirants. Can you please send me the file Solved and Unsolved excel?

Hi Dheeraj, Your post is awesome with very strong explanation. You are doing a great work. Hey Dheeraj, This is very useful indeed. I work as an auditor and my work requires a great deal of analytical skill…I am even considering Financial analysis courses…. Hi Dheeraj, This is a very good spreadsheet and will prove very useful for our trainees.

Please could you email me the spreadsheet? Hi Stuart, please check your inbox for the ratio analysis excel sheet. Have just emailed you the same. Hi Dheeraj,great job and I hope to get these kind of articles going forward as well. Can you please send the file to my mail. Great Work. Thanks for this. I can totally see the number of hours you must have spent to get this done.

Can I also get a copy of the excel template. This is certainly an outstanding work. Thank you for sharing it. Would you mind sending me the template? Hi Leonardo, thanks for the encouragement. Have just send the ratio analysis files at your inbox. Dear Dheeraj, Good job, deep explanation!

Many thanks! I have happy to see that this ratio analysis guide was useful. Have sent the excel files at your email. Hi Dheerja, really nice job! Could you send me the templates? Thank you in advance! This was a wonderful article and became easy learning for me.

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Could you please share those templates with me so that i could benefit form it even more. Really a Great stuff and thank you for your patience for very clearly explaining FS analysis in great detail. I have emailed you the financial statement analysis excel sheets. Cash and Cash equivalents has increased from 4. Why a built-up of cash? This above is one of the many questions one must ask while doing vertical analysis. Could you guide me on how to answer this and other such questions?


We need to go deep into the annual report to find out the reason for the same. Best place to start with is the Management Discussion and Analysis section. In this they do discuss the variations, growth figures etc. Hi Dheeraj, thanks for this excellent study. Helped me learn some new approaches. Wold you be able to email me the template? Hi Ruth, glad that you liked the material and found this useful. Please check your inbox for the details. Hi Dheeraj Excellent work, Could you please send me the template both solved and unsolved and PDF for this lesson on my email? How are you?

Great stuff and thank you for your patience for expalianing FS analysis in great detail. Excellent work and Knowledgeable content,you have made an outstanding effort to describe these ratio analysis. Thanks for sharing your wonderful analysis. May I request excel templates for ratios and PDF for this lesson? Hey Wendy, many thanks for the appreciation.

Have sent the templates of ratio analysis to you. Hi Dheeraj, You have a gift! I stumbled on your site during work hours some look at TMZ, I look at finance websites and I had to get back to my job so as not to cheat my clients. May I too have the practice template? Thanks, Erik. Thank you for sharing that kind of information. It is indeed helpful. Please be kind to share with me the template. Many thanks. Very Very well explained. Thanks for taking the time. Would you please send the templates, would be useful for me. Very nice and good work and will be very helpful.

Kindly send me the solved and unsolved templates. This is awesome. I would like to know whether is there any template regarding with efficiency ratio of the bank. Sir, do you mind send me this template soved and unsolved. Thanks Nur for the appreciation Will prepare one on it soon. Have sent you the financial anlaysis templates. Thanks Sothea. However, i have emailed you the excel ratio templates. Excellent job,. Thank you for making this concept so easy. Excellent work.

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May I request you for the excel templates for practice. Amasing work Dheeraj! So well and clearly explained. I would really appeciate if you could send me the templates. Many thanks in advance! Very useful and informative template.. Hi, wonderful material and information you compiled here, congratulations.

Can you send me the excel and all material, or send me the link for me to download it? Hi Alessandro, thanks for the appreciation. Have sent the financial analysis excel at your email id. I rally like how you split it into the 3 methods. I would be grateful to receive the templates and guide. Brilliant work here Sir. God bless you for the effort.

Would appreciate if you send to me also please. This whole thing, this is so kind of you. Could you please send me the financial analyses template, please. Wish you all the best. Hello sir…. Thanks for sharing this article… It is very helpful in understanding a complex topic… Thanks a lot.. It maybe have different interpretation in concept for measuring, I think.

But to measure the operating cash folllow enough or not covering the debt payment in 1 year, EBITDA may be a better indicator on operating cash flow. How do you think? Hi Alex, you are right! I have resent you the templates. Thank you soo much for this great explanation. Actually I got a job last week in a corporate banking sector which is all about this lesson. I appreciate what you have done. God bless you. Please mail it to me. Thank you for that analysis, Kindly send me that comprehensive guide on the financial analysis. Its so thorough and detailed. Its very helpful for the entry level Financial analysts those who have strong passion to do.

Hello Sir, I would like to have this material in a downloadable form. Also, I am from Nigeria, is it possible to pay for your courses using a Nigeria debit card? Many thanks in advance. Just that while registering and making payment, please choose 2checkout option. Thanks for this wonderful presentation, need to move on to the financial modelling. Good job. Could you please send me the template? Will definitely connect with you directly. I am glad you found this useful. Have shared the financial statement analysis template in your email id. Awesome work!! Really super helpful. Would really appreciate if you could send me the excel template for this.

Done all of these analysis techniques but yours brings it together very nice and neat. Great job. Would you be so kind to send me the templates? Hi Dheeraj, great portal, the content is very well graphically designed. I found some unanswered queries from your blog. Thanks for the great work and for sharing. Please kindly send me the Ratio Analysis Solved and Unsolved. Thank You. Thanks for this great analysis.

Please send me the Excel template. I love how you have simplified everything! Thanks could you please send me the solved and unsolved template. This is a wonderful and comprehensive insight into ratio analysis. Kindly mail me the excel template. Can you send me the solved and unsolved templates please?

Hi Dheeraj Vaidya, Excellent and you have made an outstanding effort to describe these. Thank you very much. Thank you Mr. Dheeraj for this fantastic post. This is helping us alot in our endeavors in knowing the fundamentals in investment strategy. Your continuous sharing of knowledge is highly appreciated.

Thank you sir. Dheeraj Vaidya Saheb. Hum ap ko aur ap ki taleem ko tahey dil sey Salam Karteen hein. To validate them with Excel, can you please sned me the file? Its a good work. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. Free Investment Banking Course. Free Accounting Course. Login details for this Free course will be emailed to you. Free Excel Course. Download Colgate Ratio Analysis Template.

By continuing above step, you agree to our Terms of Use and Privacy Policy. Free Valuation Course. Download Colgate's Financial Model. Operating Leverage Financial Risk — Financial Leverage Total Leverage Financial Risk Interest Coverage Ratio Analysis All income statement items are expressed as percentage of Sales. So, which one is the best when it comes to Financial Statement Analysis? Let us look at each one of them one by one. Vertical Analysis or Common Size Statements Vertical analysis is a technique used to identify where a company has applied its resources and in what proportions those resources are distributed among the various balance sheet and income statement accounts.

It should always be included as part of any financial analysis. This vertical analysis effort in the income statement is often referred to as margin analysis, since it yields the different margins in relation to sales. Why Fluctuating? Also, note that the operating income has dropped significantly in Horizontal Analysis Horizontal analysis is a technique used to evaluate trends over time by computing percentage increases or decreases relative to a base year.

It provides an analytical link between accounts calculated at different dates using currency with different purchasing powers. In effect, this analysis indexes the accounts and compares the evolution of these over time. As with the vertical analysis methodology, issues will surface that need to be investigated and complemented with other financial analysis techniques. The focus is to look for symptoms of problems that can be diagnosed using additional techniques.

In , Colgate saw a de-growth of Why is this so? Trend Analysis Trend Analysis compare the overall growth of key financial statement line item over the years from the base case. We note that Sales has increased by only We also note that the overall net profit has decreased by We will discuss each sub category one by one.

Current Ratio analysis in itself does not provide us with full details of the quality of current assets and whether they are fully realizable. If current assets consists of large Inventories, then we should be mindful of the fact that inventories will take longer to convert into cash as they cannot be readily sold.

Inventories are much less liquid assets than receivables. If current liabilities mature in the next one month, then current assets providing liquidity in days may not be of much use. Colgate has maintained a healthy current ratio of greater than 1 in the past 10 years. Current ratio of Colgate for was at 1.

This implies that current assets of Colgate are more than current liabilities of Colgate. This may affect the liquidity position of Colgate. Unilever current ratio seems to be declining over the past 5 years. This ratio is know as Quick Ratio or the Acid Test. The rule of thumb for a healthy acid test index is 1. Accounts Receivables are more liquid than the inventories. In addition, there can be uncertainty related to the true value of the inventory realized as some of it may become obsolete, prices may change or it may become damaged.

Cash Ratio analysis is the ultimate liquidity test. If this number is large, we can obviously assume that the company has enough cash in its bank to pay off its short term liabilities. With this higher cash ratio, the company is in a better position to payoff its current liabilities. For calculating accounts receivables for a quarter, one should take annualized sales in the numerator. Credit Sales figures may not be directly available in the annual report. You may have to dig into the Management discussions to understand this number.

Sometimes it is not available at all. For eg. Higher Receivables Turnover implies higher frequency of converting receivables into cash this is good! Days receivables is directly linked with the Accounts Receivables Turnover. Many analysts, however, prefer to use the average balance sheet receivables number to calculate the average collection period. Course Price View Course. Number of days taken by most analysts is , however, some analyst also use as the number of days in the year. This is normally done to simplify the calculations. Accounts receivable days should be compared with the average credit period offered by the company.

For example in the above case, if the Credit Period offered by the company is days and they are receiving cash in just 91 days, this implies that the company is doing well to collect its receivables. To calculate Days Receivables, we have taken days assumption. This means that Colgate is doing a better job in collecting its receivables. They may have started implementing a stricter credit policy. Like in receivables turnover, we take the average inventory for calculating Inventory Turnovers. In the last 3 years, Colgate has seen a lower inventory turnover ratio. This means that Colgate is taking longer to process its inventory to finished goods.

This implies that Inventory is used up every 73 days on an average and is restored to its original levels. One should also look at the seasonality patter in how inventory is consumed depending on the demand. It is rare that inventory is consumed constantly throughout the year.

If you remember the BASE equation that we used earlier, we can easily find purchases. Some analysts make a mistake of taking Cost of Goods Sold in the numerator of this accounts payable turnover formula. It is important to note here that Purchase is the one that leads to Payables. We earlier saw Sales can be Cash Sales and Credit sales. Ideally, we should seek for Credit Purchases information from the annual report.

Please note that we use the average accounts payable to calculate the ratio. We note that Payable turnover has decreased to 5. This implies that Colgate is taking a bit longer to make payment to its suppliers. We earlier calculated Accounts Payable Turnover as 4. Higher the accounts payable days, better it is for the company from liquidity point of view. Payable days can be affected by seasonality in the business. This may distort the interpretations that we make on payable days if we are not aware of seasonality. Payable days have been constant at around 66 days for the past 3 years.

Cash conversion cycle is the total time taken by the firm to convert its cash outflows into cash inflows returns. Higher cash conversion cycle means that it takes longer time for the firm to generate cash returns. However, a lower cash conversion cycle may be viewed as a healthy company. We note that the receivables collection period has decreased overall that has contributed to the decrease in cash conversion cycle. Additionally, we also note that the average payable days has increased, which again positively contributed to the cash conversion cycle. Asset turnovers can be extremely low or very high depending on the Industry they operate in.

🔴 3 Minutes! Financial Ratios & Financial Ratio Analysis Explained & Financial Statement Analysis

If the firm has seen considerable growth in assets during the year or the growth has been seasonal, then the analyst should find additional information to interpret such numbers. Asset turnover was at 1. You should not apply this ratio to asset light companies like Services or Internet based as the Net Fixed assets will be really low and not meaningful from analysis point of view.

Net Fixed Asset turnover was at 5. However, it jumped to This was primarily due to two reasons — a Share buy back program of Colgate resulting in lowering of Equity base each year. Gross Margin can vary drastically between industries. For example, digital products sold online will have extremely high Gross Margin as compared to a company that sells Laptop. Gross margin is extremely useful when we look at the historical trends in the margins.

In some companies, Depreciation expenses are also included in Direct Costs. Please note that depreciation related to manufacturing operations are included here in Cost of Operations Colgate 10K , pg 63 Shipping and handling costs may be reported either in Cost of Sales or Selling General and Admin Expenses. Colgate has however, reported these costs as a part of Selling General and Admin Expenses. If such expenses are included in Cost of Sales, then the Gross margin of colgate would have decreased by bps from If this is so, they assume that depreciation and amortization are non-operating expenses.

Additionally, due to price controls, Colgate has restricted ability to implement price increases without governmental approval.