Learning Objectives
- Distinguish between balance sheets and income statements
- Understand key financial ratios and their components
- Build financial ratio formulas by selecting appropriate line items
- Apply ratio analysis to evaluate company performance
Interactive Practice
This three-step interactive game will help you master financial statement analysis:
- Statement Recognition: Identify whether a financial statement is a balance sheet or income statement
- Ratio Learning: Explore how different ratios use specific line items from financial statements
- Formula Building: Construct ratio formulas by selecting the correct financial statement items
Key Concepts Covered
Liquidity Ratios
- Current Ratio
- Quick Ratio
- Cash Ratio
Leverage Ratios
- Debt-Equity Ratio
- Debt-to-Capital Ratio
- Equity Multiplier
Profitability Ratios
- Gross Margin
- Operating Margin
- Net Profit Margin
Operating Returns
- Asset Turnover
- Return on Equity (ROE)
- Return on Assets (ROA)