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Financial Analysis checklist
Liquidity Analysis
Calculate current ratio to assess the ability to pay short-term obligations.
Calculate quick ratio to evaluate immediate liquidity without inventory.
Analyze accounts receivable turnover to understand the collection rate of receivables.
Solvency Analysis
Determine debt to equity ratio to evaluate the company's financial leverage.
Assess interest coverage ratio to understand the ability to pay interest expenses.
Evaluate cash flow to debt ratio to measure the financial strength in terms of cash flow.
Profitability Analysis
Compute net profit margin to reveal the overall profitability relative to revenue.
Analyze return on assets to understand how efficiently assets are being used.
Calculate return on equity to gauge how effectively shareholder equity is being employed.
Efficiency Analysis
Evaluate inventory turnover to determine the efficiency in managing inventory.
Analyze asset turnover ratio to assess how well assets are used to generate sales.
Examine the day's sales outstanding to measure the average collection period for receivables.
Market Value Analysis
Calculate earnings per share to understand the company's profitability on a per-share basis.
Review price to earnings ratio to gauge market expectations of future earnings growth.
Assess dividend yield to understand the return on investment from dividends.
