Financial statement analysis tool
Financial statement analysis involves gaining an understanding of an organization's financial situation by reviewing its financial reports. The results can be used to make investment and lending decisions. This review involves identifying the following items for a company's financial statements over a series of reporting periods :. Create trend lines for key items in the financial statements over multiple time periods, to see how the company is performing. Typical trend lines are for revenue , the gross margin , net profits , cash , accounts receivable , and debt.
Guide to Financial Statement Analysis for Beginners
This provides an in-depth performance evaluation of the business through a screening of the last available financial reports. Upload from Excel. Automatic reporting The application generates an automatic financial report with charts, graphs, ratios, and comments.
Downloadable and editable The report can be downloaded on your own device and edited according to your needs. Download formats The report can be downloaded in: Word file, Excel spreadsheet and Pdf. It is specifically required:.
Operating cash-flow. Number of employees. All data are required for at least 2 fiscal years up to a maximum of 5. Improves the capability to provide information to investors; lets you immediately figure out the whole picture. Current Assets are classified into the following categories:.
Costs are classified into cost of sales and other specific categories, according to their destination. The application automatically generates extensive comments describing the financial status of the company through the analysis of key performance indicators. Gross Profit margin Measures the firm's capacity to generate profit through sales. EBITDA margin Measures overall profitability after taking into account all operating costs: variable costs and fixed costs. Profit Before Tax margin Measures how much revenue is converted into profits, before tax is deducted.
Net Profit margin It is the percentage of revenue remaining after all expenses operating, financial and tax have been deducted from the company's total revenue. Operating Cash-flow margin Measures how much cash is generated from operating activities per unit of revenue. Revenue per Employee It is an efficiency metric showing how much revenue is collected per single employee. A higher ratio indicates higher productivity.
ROE — Return on Equity Measures the overall profitability of the Equity capital invested in the company and provides a benchmark to evaluate alternative investments.
ROCE - Return on Capital Employed Measures the profitability of the ordinary business activities and its efficiency with respect to the amount of capital employed. EBIT margin Reflects the company's commercial performance and measures the average profit per unit of revenue.
Retained Earnings to Total Assets ratio It is a balance sheet account which records the total amount of profits or losses made by a firm over its entire life, net of the dividends paid. Liquidity analysis reveals whether the business has sufficient resources available in order to service its debt interest and principal repayments.
Current ratio Indicates the company's ability to cover its short-term liabilities using short-term assets i. Quick ratio Measures the company's solvency with regard to short-term liabilities. Cash ratio It is used to examine the company's liquidity. It is more conservative than the current ratio and the quick ratio. Days Payables and Days Receivables Evaluate the average amount of time it takes the company to pay suppliers and to collect payment from customers.
Capital structure analysis examines the relationship between internal financial resources and debt capital, assessing the viability of the company's financing strategy.
Debt to Equity ratio Compares the financial resources provided by debtholders with those provided by the shareholders. This ratio is used to monitor the company's financial risk. Net Debt to Equity ratio It is defined as the borrowings of the reported entity Total Liabilities less cash and cash equivalents. The ratio compares the financial resources provided by debtholders with those provided by the shareholders.
Total Liabilities to Assets ratio Shows how much of company's assets consist of liabilities. Total Liabilities to Equity ratio Compares the whole amount of the company's obligations to the book value of Equity. Equity to Assets ratio Assesses the degree of financial independence, i.
Fixed Assets coverage ratio Fixed Assets Coverage ratio measures the company's ability to cover required investments in fixed assets by means of equity and debt. Working Capital to Assets ratio The working capital to total assets ratio compares the net liquid assets of the firm to the total assets. Working Capital is the difference between current assets and current liabilities, so the Working Capital to Total Assets ratio determines the short-term company's solvency.
Leverage ratio Leverage ratio indicates a company's ability to make use of its borrowed capital to purchase assets. Equity market value to Liabilities ratio Compares Equity to the total amount of liabilities, considering the actual market value of the company.
Solvency analysis examines a firm's capability to meet long term obligations. In general, a solvency ratio compares a measure of profitability to the company's financial obligations. Debt to EBITDA ratio It is a solvency indicator that is commonly used by credit rating agencies to assess the probability of defaulting on issued debt.
Debt to Operating Cash-flow ratio Differently from Debt to EBITDA ratio, it takes into account the actual cash-flow generated by operating activities and compares it to the amount of financial liabilities. Unlike the aforementioned ratio, it takes into account the company's immediate liquidity, as it involves net financial debt, i. Debt minus cash and cash equivalents. EBIT to Interest coverage ratio Assesses the company's ability to cover its finance charges through its operating income.
EBITDA to Interest coverage ratio Evaluates the company's ability to cover its finance charges through its operating income, before depreciation and amortization expenses, and share of profit from associates.
Operating Cash-flow to Interest coverage ratio Assesses the company's ability to cover its finance charges comparing interest expense to the actual cash amount generated by operating activities.
Operating Cash-flow to Short- and Long-term Debt ratios Meeasure the company's ability to generate cash from operating actvities in order to pay back its current and non-current financial debt. A specific score will be assigned to each of those areas. If the performance of a certain area is not satisfactory, the system will discuss the reasons of such a negative outcome and will recommend interventions to improve it.
Finally, the application will assign a global score, processing the results obtained in each separate area trough business intelligent algorithms. Altman to predict the probability that a firm will undergo bankruptcy within the next few years.
It is calculated as a linear combination of five common business ratios, weighted by coefficients. Taffler's model It is an alternative model to assess the likelihood of bankruptcy, based on different parameters and weights, obtained through a specific research on UK companies.
Springate's model It assigns a score associated to a certain risk of bankruptcy. It is USA specific. Debt Rating The software, through complex business intelligence algorithms, evaluates the financial debt of the company and assigns a score indicating the debt level and if it is sustainable.
The application generates an automatic financial report with charts, graphs, ratios, and comments. Complex algorithms automatically generate appropriate comments in accordance with the results of the analysis. Based on the financial data entered, the application determines the trend of the Debt to EBITDA ratio and generates the following comment:.
Each area of financial management will be examined and evaluated: if the performance of a specific area e. Analyzes performances in different areas of financial management profitability, liquidity, capital structure, solvency. Evaluates the overall business performance. Assesses creditworthiness and assigns a global rating score.
All accounting statements of reclassified financials are based on standards adopted by international financial operators, in order to provide effective communication. The analysis includes ratios, charts, graphs and comments. The final report is completely editable and customizable. In a Word file, consisting of a professional financial report on the status of the company complete with all data, charts, graphs and comments In addition, each project can be exported into an Excel spreadsheet.
You pay When it expires you can choose to renew or not. Subscription fee includes:. Automatic Reports, Plans and Presentations are detailed, finalized and customizable. System constantly improved by professional know-how and technical updates. LOG IN. Financial Statement Analysis.
Financial Statement Analysis Software. Upload from Excel Available on all devices: PC, tablet and smartphone. Evaluate business performance in a click with automatic reporting. Users are able to enter up to five years of data. Calculate 35 ratios , broken-up in five areas of performance. Highlights input errors and indicates appropriate corrections.
Reclassifies and analyzes the financial data entered by users. Evaluates business performance and assigns a comprehensive score indicating the overall financial health. Performance evaluation will be based on the assessment of every single area of financial management profitability, solvency, capital structure, liquidity and a specific score will be assigned to each of those areas. Automatically generates a financial report, rich in charts, graphs, ratios, and comments obtained through complex business intelligence algorithms.
Download Fac Simile Automatic Report. It is a vital application for:. How it works Yet it makes extensive use of sophisticated business data processing methods, Financial Statement Analysis is extremely easy to use and does not require any particular expertise, apart from some basics in IFRS and GAAP accounting.
Users simply have to enter data from two financial reports. The application can anyway analyze up to five years of financial data. The system highlights technical or logical mistakes in the entered data and makes a series of recommendations to improve performances. Some optional data are also required: Operating cash-flow. All ratios are presented in a comprehensive table giving a global perspective on the company.
Automatic Reporting The application generates an automatic financial report with charts, graphs, ratios, and comments.
Tools or Techniques of Financial Statement Analysis. Table of Contents [show]. Tools of Financial Analysis. Financial statements are prepared to have complete information regarding assets, liabilities, equity, reserves, expenses and profit.
When an analyst, business executive, or student is dealing with a financial issue or wishes to understand the financial implications and economic trade-offs involved in decisions about business investment, operations, or financing, a wide variety of analytical techniques—and sometimes rules of thumb—is available to generate quantitative answers. To choose the appropriate tools from the available alternatives is clearly an important aspect of the analytical task. This is the first financial analysis tool.
Important tools or techniques of financial statement analysis are as follows.
Tools of financial statement analysis. Different tools are used for analysing the financial statements.
Financial Statement Analysis Software
This provides an in-depth performance evaluation of the business through a screening of the last available financial reports. Upload from Excel. Automatic reporting The application generates an automatic financial report with charts, graphs, ratios, and comments. Downloadable and editable The report can be downloaded on your own device and edited according to your needs. Download formats The report can be downloaded in: Word file, Excel spreadsheet and Pdf. It is specifically required:.
Tools or Techniques of Financial Statement Analysis
Financial statements are essential tools used to analyze a company's performance. Management utilizes several techniques to determine a company's financial condition and make decisions regarding improvements. Income statement: All of a company's revenues and expenses are reported on the income statement. The reporting period could be for a month, quarter, year or year-to-date. Accountants use Generally Accepted Accounting Principles to record these line items. For most business reporting, the recording of sales and expenses are on the accrual basis. This method of accounting calculates receipts and matches the related costs at the same time. For example, a sale is recorded at the time of the transaction, even if it is sold on credit and the cash is not collected until several months later. The other method of accounting is the cash basis.
Financial statement analysis is the process of analyzing a company's financial statements for decision-making purposes.
These include financial ratios, common-sizing financial statements, currency translations, and chart analysis. Common-size analysis involves creating a ratio between each financial statement item and a base item, which is typically total assets when common-sizing the balance sheet or total revenue when common-sizing the income statement.
AnalystPrep
Many people who are just getting started with finance often feel it a headache to deal with financial statements. Clearly define the ideas for report analysis, know what to analyze, determine the metrics, and finally select a good reporting tool to achieve the final analysis results. Different people do financial analysis for different purposes, but the common purpose is to obtain information that is useful for their economic decisions from financial statements. Therefore, there are three objects of financial statement analysis: financial position , operating results and cash flow. Based on this, the solvency analysis , profitability analysis and operational capability analysis that we need to do constitute the general framework for financial statement analysis. For example, the competent department of the enterprise, the parent company, and the financial department focus on analyzing and checking the allocation of relevant resources of the enterprise, the compliance with financial and economic policies and financial systems, and the capital maintenance and capital appreciation. Investors focus on analyzing the profitability, operational capacity and use of funds, and understanding investment returns and investment risks. Creditors focus on analyzing the solvency of enterprises, evaluating the degree of financial security or risk of enterprises, and so on. Considering the different requirements of internal management, the content of financial statement analysis is very extensive. It should help report users to summarize and evaluate the financial condition and operating results of enterprises, and to provide a reliable basis for making economic forecasts and decisions. The specific data for each item of the report is only the surface, the structure various ratios or indicators is the skeleton, and the trend is the core. The structure is more important than the value, and the trend is more important than the structure.
