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Financial Ratios - 1st Edition - ISBN: 9780750684538, 9780080554266

Financial Ratios

1st Edition

How to use financial ratios to maximise value and success for your business

Author: Richard Bull
eBook ISBN: 9780080554266
Paperback ISBN: 9780750684538
Imprint: CIMA Publishing
Published Date: 26th October 2007
Page Count: 192
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Have you ever worried about being expected to understand what finance people are saying when they quote ‘gearing ratios’ or ‘equity yields’ at you? Whether you are in a large organization or just starting out on your own you will want to avoid missing something important and know how you can achieve the financial targets that are critical to you and your business.

It is important for all those engaged in business to understand how financial ratios can be used to measure the performance of a business. This has never been more urgent and important, when corporate frauds and corporate governance are high on the public agenda. However it is also important to understand how they can be used positively to maximize value and success in a business.

This book covers the full scope of business. It uses a model, the Enterprise Stewardship Model which has received international acclaim, to illustrate the power – and the limitations – of financial ratios and explore the tangible and intangible aspects of creating value in a business. It shows how ratios can be used to describe, measure, and help to maximize, value and success. And it includes worked examples to illustrate how to generate and calculate key financial ratios.

The CD that is included with the book enables the reader to both understand and apply the subject for themselves through the use of interactive exercises. It also includes a short introductory video, a slide show and some structured questions to prompt a strategic business review using ratios.

Relationships are at the heart of this book. Ratios themselves are relationships – between different sets of numbers or measurements. It is important to understand them and be able to work with them. But is also important to understand and be able to work with people in a business and this book looks at different perspectives on a business and explores how financial ratios can be interpreted differently from different standpoints.

“A splendid job! You have made a complex subject highly accessible. It is very readable for anyone engaged in business whether in a small firm or a major corporation.” - Peter Hutton, Managing Director of Brand Energy Research and formerly Group Development Director for MORI

“Great concept: nicely executed and well written. Financial Ratios has a logical structure and flows well – I really enjoyed reading it and couldn’t put it down!” - Dr David Hillson FRSA FAPM FIRM FCMI, Director of Risk Doctor and Partners.

Key Features

  • Financial ratios can add value to any business - understand how
    * Do you your customers need to understand what the finance department is telling them and what they should do about it?
    * Understand the strengths and shortcomings of financial ratios which will help you grow and manage your business
    * Accompanying CD enables the reader to both understand and apply the subject for themselves through the use of interactive exercises


Finance Directors; Non-executive Directors; Business Managers

Table of Contents

The place of financial ratios in business success
The role of financial ratios
Creating value
Measuring value
Understanding financial ratios
Funding management - the gearing ratio
Asset management - the asset turnover ratio
Value add management - the profit margin
Tax management - the effective tax rate
Growth management - the pay out and retention ratios
Using financial ratios
The composite ratios
The place of financial ratios in strategic management
Perspectives on financial ratios

The purpose of ratios – the three Eff's
The source and application of financial data for ratio analysis
A Benchmarking Example
Further Reading


No. of pages:
© CIMA Publishing 2007
26th October 2007
CIMA Publishing
eBook ISBN:
Paperback ISBN:

About the Author

Richard Bull


"I would strongly recommend this work as essential reading, not only for budding entrepreneurs, but for all those from non financial backgrounds whose career paths take them into jobs that carry profit responsibility. It will also be of value to business studies students as a ‘crammer’."

- Philip Sadler, CBE, Formerly Chief Executive of Ashridge Management College.

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