Shadowing Practice: FINANCIAL RATIOS: How to Analyze Financial Statements - Learn English Speaking with Video
Bir pratik modu seçin
Her mod tam ekran bir pratik odası açar.
250 cümleler
Cümleler çok kısa veya çok uzun ise, ayarlamak için Düzenle'ye tıklayın.
1
Hello, I'm James, you're watching Accounting Stuff and today we're covering financial ratios.
2
I'll explain what financial ratios are, we'll break them down into five main groups,
3
and then I'll show you how to work out 25 financial ratios in 25 minutes.
4
Ambitious, I know, but we've got this!
5
Before we get started, I want to say a big thanks to all my channel members.
6
Your support is always appreciated.
7
Thank you.
8
Financial Statements.
9
Financial ratio analysis begins with financial statements.
10
Accounting reports that summarize the financial activities and performance of a business.
11
The three main financial statements are the income statement, the balance sheet and the cash flow statement.
12
However, we can work out most financial ratios using only the income statement and the balance sheet.
13
The income statement looks like this.
14
It gives us a summary of a business's revenues and expenses over a period of time.
15
And then we have the balance sheet which gives us a snapshot of a business's assets,
16
liabilities and equity at a point in time.
17
So what is financial ratio analysis?
18
Good question.
19
A ratio tells us how much of one thing we have compared to another thing.
20
In a financial ratio we compare the size of one line in a financial statement against another.
21
Usually we can find these line items in the income statement
22
or the balance sheet and most of the time financial ratios are shown as percentages.
23
Whenever that's the case we multiply by 100.
24
Financial ratio analysis is the process of comparing different financial ratios over time and across different businesses.
25
What types of financial ratio are there?
26
I like to break them down into five main groups.
27
Profitability ratios, liquidity ratios, efficiency ratios, leverage ratios and price ratios.
28
Now, I'll show you how to work out 25 of the most popular financial ratios that live in each of these groups.
29
If you want to make some notes, then now might be a good time to grab yourself a pen and paper.
30
Or if you'd like to stay focused on this video, I've made some financial ratios cheat sheets that summarize pretty much everything I'm about to cover.
31
You can find them on my website.
32
The link is down in the description and the proceeds help support this channel.
33
We'll kick things off with profitability ratios.
34
Profitability ratios measure how efficiently a business generates profit from four different things.
35
Revenue, assets, equity and capital employed.
36
We can break them down into margin ratios and return ratios.
37
Margin ratios measure how well a business converts revenue into profit.
38
We can calculate margin ratios using one simple formula.
39
profit margin is equal to profit divided by revenue.
40
Profit and revenue live in the income statement.
41
Revenue is on the top line, it's the earnings that a business generates over a period of time
42
and profit is the financial gain left in the business after deducting expenses.
43
As you can see there are three types of profit in an income statement.
44
Gross profit, operating profit and net profit.
45
Gross profit is the big one at the top.
46
It's a business's revenue minus its cost of sales.
47
And if we take gross profit
48
and divide it by revenue then we can find a business's gross profit margin
49
which is the first of our 25 financial ratios.
50
Gross profit margin tells us how much big profit a business is able to generate from each dollar of revenue earned.
51
It's a similar story with the other margin ratios.
52
If we move further down the income statement and subtract operating expenses as well then we get to operating profit.
53
Operating profit divided by revenue gives us our second financial ratio operating profit margin.
54
And if we head down to the bottom line of the income statement we have net profit.
55
This is the residual profit that's left over after deducting all of the business's expenses.
56
And net profit divided by revenue is, you guessed it, net profit margin, our third margin ratio.
57
If you'd like to learn about these in a bit more depth, I've made videos covering each of these ratios.
58
I plan to do the same for the rest of the financial ratios in this playlist, so don't forget to subscribe if you'd like to watch those.
59
But what about return ratios?
60
Return ratios work in a similar way but this time we have net profit on the top of the equation.
61
As we saw a moment ago net profit can be found on the bottom line of an income statement.
62
In a return ratio we measure how much net profit a business is able to generate relative to its assets,
63
equity or capital employed.
64
We can find all three of these in the balance sheet.
65
Assets make up the left-hand side of a balance sheet.
66
Total assets represent all of the stuff that a business owns at a point in time.
67
If we take a business's net profit from the income statement and divide it by total assets from the balance sheet,
68
then we've calculated its return on assets or ROA.
69
Hold up, I want to point out one thing.
70
When we compare a line item from the income statement against
71
a line item from the balance sheet like we have here it's a good idea to use the average balance sheet number.
72
This is
73
because the balance sheet is a snapshot at a point in time whereas the income statement covers a period of time.
74
If we average the opening and closing balance sheet numbers then we can compare like with like.
75
I won't mention this every time it comes up but please keep it in mind.
76
On the right hand side of the balance sheet we have liabilities and equity.
77
Together these represent the stuff that a business owes.
78
A business owes liabilities to third parties and it owes equity back to its owners.
79
Total equity is the owner's or shareholder's claim on the net assets of the business.
80
And return on equity or ROE is equal to a business's net profit divided by its total equity.
81
Return on equity shows us how efficiently a business uses its owner's money to generate bottom line profit.
82
But there's a problem.
83
Some businesses choose to take out very large loans to fund their operations.
84
This reduces the owner's claim on net assets and it can inflate return on equity.
85
In these situations it can be better to use capital employed.
86
Capital employed is a business's total asset minus its current liabilities.
87
It ignores all long-term debt used to fund operations.
88
Net profit divided by capital employed is return on capital employed or ROCE.
89
ROCY.
90
ROCY can even go a step further and use operating profit instead of net profit.
91
So return on capital employed is equal to a business's earnings before interest and tax divided by its capital employed.
92
At number six, this is our last return ratio and our last profitability ratio.
93
Let's move on to liquidity ratios.
94
Liquidity ratios measure how well a business can cover its short-term debt obligations using different assets.
95
The calculation looks something like this a liquidity ratio is equal to some assets divided by current liabilities
96
these assets on the top are used to cover a business's
97
short-term debt obligations on the bottom everything you see here can be found on the balance sheet
98
which makes things nice
99
and simple current liabilities can be found on the right hand side of a balance sheet there are businesses obligations
100
that need to be settled within one year.
101
On the left we have assets.
102
Liquid assets are the stuff that a business owns that can be converted into cash quickly and easily.
103
The most liquid asset of them all is cash itself.
104
If we take cash and divide it by current liabilities then we have the cash ratio.
105
If the cash ratio is bigger than one then a business
106
is able to pay off all its short-term debt obligations with the cash that it has on hand.
107
This is an indicator of good financial health.
108
But it isn't always possible.
109
Sometimes we need to look at all of the business's liquid assets on the balance sheet.
110
So that means cash, marketable securities like short-term investments and accounts receivable.
111
Inventory and prepaid expenses aren't considered to be liquid assets.
112
We can find the quick ratio by taking all liquid assets and dividing them by current liabilities.
113
This checks if a business can cover its short-term debt obligations using everything that can quickly be converted into cash.
114
But we can go a step further too.
115
We can consider all of a business's current assets including inventory and prepaid expenses.
116
That gives us the current ratio.
117
Current assets divided by current liabilities.
118
This is our ninth financial ratio and the last of our liquidity ratios.
119
Now let's move on to efficiency ratios.
120
Efficiency ratios measure how effective a business is at selling inventory to customers,
121
how quickly it's able to collect cash back from them and how reliably it pays off its creditors.
122
There are two parts to this.
123
We have turnover ratios and we have the cash conversion cycle.
124
Turnover ratios measure how quickly a business conducts its operations.
125
They compare one line from the income statement against a related line in the balance sheet.
126
Take the inventory turnover ratio for example.
127
In this one we divide cost of goods sold in the income statement by inventory in the balance sheet.
128
The inventory turnover ratio tells us how many times a business has sold and replenished its inventory over a period of time.
129
The receivables turnover ratio works in a similar way.
130
This time we divide revenue in the income statement by accounts receivable in the balance sheet.
131
This one measures how efficiently a business collects cash from its customers.
132
If we instead divide revenue by total assets from the balance sheet then we also have the asset turnover ratio.
133
This one may feel familiar because it's not too different to return on assets, which we covered in profitability ratios.
134
That was net profit divided by total assets.
135
In this one, however, the asset turnover ratio ignores expenses and focuses on revenue
136
and how efficiently a business generates revenue using the stuff it owns.
137
Then we have the payables turnover ratio, which is cost of goods sold from the income statement divided by accounts payable in the balance sheet.
138
The payables turnover ratio shows us how reliably a business pays off its suppliers.
139
It's our last turnover ratio.
140
Onward to the cash conversion cycle.
141
The cash conversion cycle tells us the average number of days a business needs to convert its investments in inventory into cash.
142
It works like this.
143
The cash conversion cycle is equal to days sales of inventory plus days sales outstanding plus days payable outstanding.
144
These three cash conversion ratios are the upside down of turnover ratios.
145
Days sales of inventory is the upside down version of the inventory turnover ratio.
146
This time we have inventory from the balance sheet on the top
147
and cost of goods sold from the income statement on the bottom.
148
But this time round we multiply the ratio by 365, the number of days in a year.
149
When we do this we get the average number of days it takes a business to convert its inventory into sales.
150
Also known as the inventory turnover period.
151
Days sales outstanding is the inverse of the receivables turnover ratio.
152
It's accounts receivable from the balance sheet divided by revenue from the income statement.
153
When we multiply it by 365 it tells us the receivables collection period.
154
The average time it takes a business to collect a payment from a sale in days.
155
And last but not least we have days payable outstanding which is basically the payables turnover ratio upside down.
156
Days payable outstanding is accounts payable from the balance sheet divided by cost of goods sold from the income statement times 365.
157
It's the average payables payment period.
158
The number of days it takes a business to pay its bills.
159
Days payable outstanding is our 16th financial ratio and closes the loop on the cash conversion cycle.
160
How long it takes a business to turn over inventory, collect cash on sales and pay bills.
161
Leverage ratios.
162
Leverage is when you up your risk by taking on debt in order to maximize your return or reward.
163
Leverage ratios can be split out into two categories balance sheet ratios and income statement ratios.
164
Leverage ratios in the balance sheet divide total liabilities by total assets or total equity.
165
If we take total liabilities
166
and divide them by total assets then voila we have the
167
debt to assets ratio the dta ratio this tells us how
168
much of a business's assets have been financed using debt this ratio considers both short
169
and long-term debt obligations if we jump back to total liabilities in the balance sheet
170
and divide them this time by total equity then we've got the debt to equity ratio DTE.
171
This tells us how much debt a business has for each dollar of equity.
172
A business can finance its assets by either borrowing money from third parties or using its owner's own money.
173
Raising debt can be helpful since it uses leverage to expand a business
174
but it comes with some risk in the form of interest
175
which leads us nicely into interest ratios which we can find in the income statement.
176
These determine a business's ability to meet its financial obligations.
177
We take a type of profit and divide it by a type of interest.
178
Both can be found in the income statement.
179
The interest coverage ratio compares a business's operating profit against its interest expenses.
180
Operating profit is calculated before interest
181
so this tells us whether a business has earned enough profit to cover the interest on its debt obligations.
182
But being able to cover interest isn't the whole story.
183
Total debt service is made up of interest and repayments of the principal, the current portion of long-term debt.
184
So it's also worth checking the debt service coverage ratio which is equal to EBITDA divided by total debt service.
185
EBITDA is earnings before interest, tax, depreciation and amortization.
186
This ratio uses EBITDA instead of operating profit because it excludes depreciation and amortization which are both non-cash expenses.
187
It tells us whether a business generates enough profit to service both the interest and principal repayments on its debt.
188
And that's a wrap on leverage ratios.
189
But don't go anywhere just yet.
190
We have one last group to cover.
191
Price ratios.
192
Price ratios are very important.
193
Investors use them in financial analysis to evaluate the share price of a business and determine if it's a worthwhile investment.
194
price ratios tend to fall into two groups we have earnings based ratios
195
and dividend based ratios we'll start with earnings based ratios you've probably heard of this one earnings per share
196
or EPS it's a business's net profit divided by the number
197
of common shares outstanding earnings share represents the slice of a business's profit that's allocated to each share of common stock.
198
The number of common shares outstanding can be found in the equity section of a business's balance sheet,
199
either in the note for common stock or in the line item description.
200
And as we've seen, net profit can be found on the bottom line of the income statement.
201
Sometimes the EPS calculation is net profit minus preferred dividends divided by common shares outstanding.
202
This is because dividends are distributed to preferred shareholders before common shareholders.
203
Earnings per share is a useful way to measure profitability, but it doesn't give us the whole picture.
204
If we take a business's share price and divide it by its earnings per share,
205
then we find its price to earnings ratio also known as the P-E ratio.
206
A business's share price can be found quickly online.
207
It's the lowest amount you can buy one unit of company stock for.
208
In a publicly traded company that's listed on a stock exchange share prices fluctuate constantly and are determined by the market.
209
The P-E ratio is share price divided by earnings per share
210
so it tells us how much the market is prepared to pay for each dollar of earnings.
211
Share prices can be overvalued which can lead to a large price to earnings ratio.
212
However, a high P-E ratio could indicate strong future growth.
213
Which brings me on to the next financial ratio.
214
The price to earnings to growth or PEG ratio.
215
This is equal to the price to earnings ratio which we just covered divided by the expected earnings per share growth.
216
EPS growth is an estimate and represents the projected annual growth rate in earnings per share.
217
So the PEG ratio delves a little deeper into determining an investment's value than the P-E ratio.
218
In theory, it tells us if a company's stock is overvalued, undervalued or priced correctly given the expected future growth rate.
219
I say in theory because the validity of the PEG ratio is completely dependent on the EPS growth rate,
220
which like I mentioned is an estimate.
221
Moving on, moving on, what about dividend-based ratios?
222
Dividends per share is calculated in a very similar way to earnings per share
223
but this time we swap out net profit on the top for dividends paid
224
so dps is equal to dividends paid divided by the number
225
of common shares outstanding dividends are cash distributions paid out to
226
the shareholders of a business over a period of time this makes dividends per share an important ratio
227
because dividends are effectively income from an investor's point of view.
228
If a business pays out a special dividend, which is a non-recurring extra dividend related to a particular event,
229
then we should deduct it when working out dividends per share.
230
Another handy formula for investors is the dividend yield ratio.
231
In this one we take dividends per share and divide it by the share price of the company.
232
This represents the percentage of a business's share price that it tends to pay out in dividends each year.
233
And that's our 25th financial ratio.
234
However, since you've made it this far, I do have one extra bonus one for you.
235
It's called the dividend payout ratio,
236
and we calculate it by taking dividends paid and dividing it by the net profit earned over the same period of time.
237
This represents the percentage of a business's net profit that's distributed back to the shareholders as a dividend.
238
Another useful ratio for investors.
239
And at number 26 this is our last price ratio which completes our mind map of financial ratios.
240
We covered profitability ratios which measure how efficiently a business generates profit.
241
Liquidity ratios which tell us if a business can cover its short-term debt obligations.
242
Efficiency ratios which show us how quick they are at selling inventory, collecting cash and paying off creditors.
243
And then there was leverage ratios
244
which measure how much debt a business has taken on and its ability to service that debt.
245
And finally price ratios are used by investors to evaluate the share price of a business to see
246
if it's a worthwhile investment.
247
OMG that was a lot to take in.
248
I've summarized all this information in my financial ratios cheat sheets.
249
If you think they could come in handy then you can find them on my website
250
and I will see you in the next video.
Uygulamayı İndir
Akıcı konuşmak için ihtiyacınız olan her şey
AI TelaffuzHer cümleyi puanla
IPA AlıştırmasıHer sesi ustalaştır
Kelime BilgisiKelime bankanızı oluşturun
Kelime OyunuOynarken öğrenin
Aynı Kanal
B23
The INCOME STATEMENT for BEGINNERS
Business EnglishUniversity StudentsWorking Adults
C11
The INCOME STATEMENT Explained (Profit & Loss / P&L)
Business EnglishUniversity StudentsWorking Adults
C111
FINANCIAL STATEMENTS: all the basics in 8 MINS!
Business EnglishWorking Adults
C16
ACCOUNTING BASICS: a Guide to (Almost) Everything
Business EnglishUniversity StudentsWorking Adults
B1ACCOUNTING EQUATION: Explained in (Almost) 2 Minutes!
Daily ConversationUniversity Students
FOR YOU
Video Öner
C13
28 cümleler
0925.2 financial statements and ratios
Business EnglishUniversity StudentsWorking Adults
C11
111 cümleler
Financial Analysis Fundamentals: How to Analyze Financial Statements Like a Pro Part 7 | CFI Course
Business EnglishUniversity StudentsWorking Adults
C11
506 cümleler
Analyzing Statements of Cash Flows 1 (2025 CFA® Level I Exam – FSA – Learning Module 4)
Business EnglishUniversity StudentsWorking Adults
C11
62 cümleler
DuPont analysis explained
Business EnglishUniversity StudentsWorking Adults
C1480 cümleler
Everything Valuable from an MBA in 25 minutes
Business EnglishUniversity StudentsWorking Adults
C12
224 cümleler
What is Statistics? A Beginner's Guide to Statistics (Data Analytics)!
Business EnglishUniversity StudentsWorking Adults
C1141 cümleler
What do accountants actually do?
Business EnglishUniversity StudentsWorking Adults
C11
185 cümleler
Financial Assets versus Real Assets | Essentials of Investments | CFA exam | CPA Exam BAR
Cambridge Exam PrepBusiness EnglishUniversity Students
C14
128 cümleler
Financial Analysis Fundamentals: How to Analyze Financial Statements Like a Pro Part 1 | CFI Course
Business EnglishUniversity StudentsWorking Adults
C11
267 cümleler
How to Feel Rich When Your Bank Account Doesn't Agree Yet
Business EnglishUniversity StudentsWorking Adults
Bu dersin kelimeleri ve konuşma notları
Bu videoda gölgeleme çalışması için 250 cümle ve 3264 kelime var. Konuşma bölümü 23:56 sürüyor. Konuşmacı dakikada yaklaşık 136 kelimelik dengeli bir hızla konuşuyor; gölgeleme için rahat bir tempo. Kelimelerin yalnızca %78’i İngilizcede en sık kullanılan 3.000 kelime arasında, bu yüzden kelime dağarcığı zorlayıcı.
Bu videodaki önemli kelimeler
Videodan öğrenmeye değer 15 kelime, telaffuzu ve anlamıyla:
| Kelime | Telaffuz | Anlam |
|---|---|---|
| ratio isim | /ˈɹeɪ.ʃoʊ/ | oran |
| asset isim | /ˈæsɛt/ | varlık |
| sheet isim | /ʃit/ | varak, sayfa |
| dividend isim | /ˈdɪvɪdɛnd/ | kâr payı |
| inventory isim | /ˈɪn.vən.tɹi/ | envanter |
| liability isim | /laɪəˈbɪlɪti/ | borç |
| margin isim | /ˈmɑɹ.d͡ʒɪn/ | kenar |
| expense isim | /ɪkˈspɛns/ | masraf |
| obligation isim | /ˌɑ.blɪˈɡeɪ.ʃn̩/ | vazife, yükümlülük |
| leverage isim | /ˈlɛv.(ə.)ɹɪd͡ʒ/ | kaldıraç kuvveti |
| compare fiil | /kəmˈpɛɚ/ | karşılaştırmak, kıyaslamak |
| conversion isim | /kənˈvɝʒən/ | çevirim, dönüşüm |
| gross sıfat | /ɡɹoʊs/ | gayrisafi |
| liquid isim | /ˈlɪk.wɪd/ | sıvı, likit |
| collect fiil | /ˈkɑlɪkt/ | katılmak, toplamak |
Duyacağınız deyimsel fiiller
| Kelime | Anlam |
|---|---|
| take out fiil | çıkarmak |
Bu videodaki dil bilgisi
Konuşmacının en çok kullandığı yapılar, videodaki sözcüklerin aynısıyla:
| Yapı | Videoda |
|---|---|
| Present perfect have/has + fiilin üçüncü hâli — geçmişte olan ama şimdi de önemli olan bir eylem | have compared · I've made · we've calculated |
| Edilgen yapı be + fiilin üçüncü hâli — kimin yaptığı değil, ne olduğu önemli | is always appreciated · are shown · can be found |
| İlgi cümlecikleri who / which + cümle — bir kişi ya da şey hakkında ek bilgi | ratio, which is · outstanding which is · ratio which is |
Dikkat edilecek telaffuzlar
Konuşmacı we've, I'll, I've gibi kısaltılmış biçimleri 29 kez kullanıyor. Bunları duyduğunuz gibi kısa söyleyin.
- “th” sesleri: worthwhile /ˌwɜː(ɹ)θˈwaɪl/, ninth /naɪnθ/
- “sh” ve “zh” sesleri: ratio /ˈɹeɪ.ʃoʊ/, sheet /ʃit/, obligation /ˌɑ.blɪˈɡeɪ.ʃn̩/, conversion /kənˈvɝʒən/, efficiency /ɪˈfɪʃ.ən.si/
- Uzun kelimeler — vurguyu doğru yere koyun: liability /laɪəˈbɪlɪti/, efficiency /ɪˈfɪʃ.ən.si/, indicator /ˈɪn.dɪˌkeɪ.tə(ɹ)/, validity /vəˈlɪd.ɪ.ti/, residual /ɹɪˈzɪd͡ʒ.u.əl/
Bu videoyla nasıl çalışılır
- Videonun tamamını konuşmadan bir kez dinleyin ve bilmediğiniz kelimeleri not edin.
- Normal hızda cümle cümle tekrar edin; ritminiz konuşmacıyla aynı olana kadar her cümleyi yineleyin.
- Kendinizi kaydedin ve orijinaliyle karşılaştırın; ratio, asset, sheet gibi kelimelere özellikle dikkat edin.
Gölgeleme Tekniği Nedir?
Gölgeleme, başlangıçta profesyonel tercüman eğitimi için geliştirilen ve çok dilli Dr. Alexander Arguelles tarafından popüler hale getirilen, bilim destekli bir dil öğrenme tekniğidir. Yöntem basit ama güçlüdür: ana dili İngilizce olan bir sesi dinler ve hemen yüksek sesle tekrar edersiniz — konuşmacıyı 1-2 saniye gecikmeyle takip eden bir gölge gibi. Pasif dinleme veya dilbilgisi alıştırmalarının aksine, gölgeleme beyninizi ve ağız kaslarınızı gerçek konuşma kalıplarını eşzamanlı olarak işlemeye ve yeniden üretmeye zorlar. Araştırmalar, telaffuz doğruluğu, tonlama, ritim, bağlı konuşma, dinleme anlama ve konuşma akıcılığını önemli ölçüde geliştirdiğini göstermektedir — bu da onu IELTS Konuşma hazırlığı ve gerçek dünya İngilizce iletişimi için en etkili yöntemlerden biri yapar.