Financial ratios are a critical tool for accountants. Financial ratios can be calculated in Excel to make forecasts or evaluate the financial health of a company.
- [Instructor] In addition to recording information … and transactions, … accountants are often called upon … to help distill that information … into easily digestible summaries … of how a firm is positioned. … To do that, … financial ratios are typically used. … Excel makes putting these ratios together very simple. … I'm in the zero, three, zero, six begin Excel file. … Now of course, there's numerous ratios … that a firm might want, and in reality, … the types of ratios that a firm will use … will vary depending on the industry that the firm is in. … But in our case, I'm using four simple ratios … that we want to go through and calculate, … and these are widely used across a variety of industries. … We've got the debt to asset ratio, … current assets to current liabilities, … debt to EBITDA, … and return on assets. … This first ratio, the debt ratio, … will give us a sense for whether or not the firm … has too much debt on its hands. … Next, we can look at whether or not the firm …
- List the most common tasks and approaches faced by accountants in their daily lives.
- Determine whether transactions can be exported from Quickbooks to Excel or not.
- Outline the structure that the SUMIF function uses.
- Explain how to measure EBITDA.
- Identify at what level the General Ledger tracks expenses.
- Break down how to construct a business valuation using a cash flow analysis.