financial statement analysis

hi,

What are the most important ratios for analysis purpose and why?What do they say about the companies' financial postion?

Appreciate if anuone can reply to this question at their earliest.

Thanks

Permalink Reply by Satyam Gairola on February 11, 2010 at 4:36am: its depends for which purpose ur are doing analysis.
if u are doing credit analysis u can use solvency,liquidy ratios..
if ur doing analysis of perfomance than u can use profitability and operation ratios.; ▶ Reply to This

Permalink Reply by vijaya laxmi on February 11, 2010 at 5:05am: thanks; ▶ Reply to This

Permalink Reply by Kaustubh Shrotriya on February 11, 2010 at 5:01am: It depends upon what exactly are you trying to analyse? also ratio differ according to sector and industry of the company.

For eg for understanding leverage we will look at ratios like Debt/Equity , Total assets / debt , EBITDA / debt + interest , Ebitda / interest

For equity analysis
Earnings aftyer Tax / Equity, Operating margin, etc

There are sector specific ratios as well for eg book value per share etc; ▶ Reply to This

Permalink Reply by vijaya laxmi on February 11, 2010 at 5:10am: Thanks, can you please elaborate what ratios are used to analyse the real estate sector.; ▶ Reply to This

Permalink Reply by Sachidanand (Sacha) Singh on February 11, 2010 at 6:10am: Jim Pearson has posted two excellent pdf’s in this forum yesterday. Pl see the one that has investment analysis here.; ▶ Reply to This

Permalink Reply by vijaya laxmi on February 11, 2010 at 7:59am: thank you sir; ▶ Reply to This

Permalink Reply by Kaustubh Shrotriya on February 11, 2010 at 7:39am: http://www.invest-2win.com/Report7.html

check the above link for relevant ratios for real estate sector; ▶ Reply to This

Permalink Reply by vijaya laxmi on February 11, 2010 at 7:59am: thanks for the reply; ▶ Reply to This

Permalink Reply by Werner Reisacher on February 11, 2010 at 11:26am

Attached is an Excel Spreadsheet that might be helpful.
Werner Reisacher

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