Types of Financial Analysis

Financial analysis involves using financial data to assess a company’s performance and make recommendations about how it can improve going forward.

[judyl.]

12 types of financial analysis: 1. vertical, 2. horizontal, 3.leverage, 4. growth, 5. profitability, 6. liquidity, 7. efficiency, 8. cash flow, 9. rates of returns, 10. valuation, 11. scenario & sensitivity, 12. variance.0:25

1. vertical analysis: compare btw companies of different sizes by evaluating their margins.0:50

2. horizontal analysis: compare year over year ~ trend analysis 1:05

3. leverage (ratios) analysis: ratios. 1:30
common examples: 1. Debt/ Equity, 2. Debt/ EBITDA, 3.EBIT/ interest, 4. Dupont analysis

4. growth (rates) analysis: 1:50
common examples: 1. Year-over-year, 2. Regression analysis, 3. Bottom-up analysis (start from individual drivers of revenue in the business), 4. Top-down analysis (start from market size, share, & TAM), 5. other forecasting methods.

5. profitability analysis: how much income a business earns relative to its revenue. 2:10
common examples: 1. Gross margin毛利率, 2. EBITDA margin, 3. EBIT margin, 4. Net profit margin 淨利率

6. liquidity analysis: meet short-term obligation.2:30
common examples: 1. current ratio, 2. acid test, 3. cash ratio, 4. net working capital

7. efficiency analysis: how well a company manage its assets and use them to generate revenue and cash flow 2:45
common examples: 1. asset turnover ratio, 2. fixed asset turnover ratio, 3. cash conversion ratio, 4. inventory turnover ratio

8. cash flow analysis: cash is king. cash flow statement (operating, investing, financing activities.)3:15
common examples: 1. operating cash flow (OCF), 2. free cash flow (FCF), 3. free cash flow to the firm (FCFF), 4. free cash flow to equity (FCFE)

9. rates of returns: rates of returns on investment (ROI). 3:30
common examples: 1. return on equity (ROE), 2. return on assets (ROA), 3. return on invested capital (ROIC), 4. dividend yield, 5. capital gain, 6. accounting rate of return (ARR), 7. internal rate of return (IRR)

10. valuation analysis: value of business can be assessed in many ways. 4:00
common approaches: 1. cost approach, 2. market (relative value) approach, 3. discounted cash flow (intrinsic value) approach.
11. scenario & sensitivity analysis: best and worst-case future a company could look like.4:30

12. variance analysis: favorable and unfavorable 4:40

All analysis are very important and needs to be done in conjunction with each other.5:10

[la]

I stumbled on this now and for a beginner trying to understand financial analysis I love the simplicity of the video and clarity of the presentation and slides.. so short but impactful.. will love to sign up for the comprehensive course if available..

[jamesallen]

FANTASTIC video! Great graphics, great breakdown into easy-to-understand groupings (taxonomy).

My career is not in finance. I'm an IT professional with strong competencies in technology, but I want to round out my business-side competencies. Financial literacy is one of those. I am definitely going to buy your course and learn, even if there's more info in there than I will even need.

[MrAfgShah]

This is a great introductory video to financial analysis great work guys

[TheJoanml]

Hello the CFI team🌈

THANK YOU for the top notch education course for financial professionals around the globe 🌍

Question:🙋‍♂️
Is that possible to create a set of courses for presentation/slides related contents?

Would love to see how a world class financial analyst conduct during presentation and communicate in meetings ☝️
Many thanks 🌹

[PawanYadav-vdok]

Waiting for all videos on all these subjects too...!

[kalaranjimaheswaran]

Corporate Financie institute,
Dear Sir, Thankyou for the informative tutorial. I am at a beginning in financial analysis looking for suitable positions. The types financial analysis seem to be adaptable to a specific business corresponding to the question to be considered. The internal rate of return is in the return on the investments and relevant to the borrowings and pay back. This is an approach yet at grasp and is for study and the grasp of the varied applications pertinent to the investments in a business. The instance relevant to the natural resources and the environmental issues in the context of the investments and financial analysis are also to be addressed.
I need insights.
Wish you all the best in your endeavours for the future.
Kalaranji Maheswaran
Management Consultant in book keeping and in accounts clerical
Wednesday, 18th October 2023

[mariomujica]

Do you make your charts just on Excel? They look so clean

[talebbagazi]

thanks for the introductions. now its looks much easier to understand for me.

[stephenphan]

Very useful video. Thank you for sharing

[fernandocuesta]

You guys are doing God's work
Thanks a lot

[patrickardahalian]

How many likes did you get from people starting out in crypto and never went to college...this type of vid warrants reviewing several times

[sabrinamedina]

How'd you calculate the tax ratio?