Financial Ratios

Financial Ratios

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

1st Edition - October 26, 2007

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  • Author: Richard Bull
  • eBook ISBN: 9780080554266
  • Paperback ISBN: 9780750684538

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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

Product details

  • No. of pages: 192
  • Language: English
  • Copyright: © CIMA Publishing 2007
  • Published: October 26, 2007
  • Imprint: CIMA Publishing
  • eBook ISBN: 9780080554266
  • Paperback ISBN: 9780750684538

About the Author

Richard Bull

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