HAME514

Using Ratio Analysis to Evaluate Financial Performance

Use ratio analysis to analyze financial statements. Understand your organization’s financial performance and improve its competitiveness.

Description

The ability of an organization to analyze its financial position is essential for improving its competitive position in the marketplace. Through a careful analysis of its financial performance, the organization can identify opportunities to improve performance at the department, unit, or organizational level.

In this course, participants will learn to use several ratio analysis instruments to achieve a comprehensive understanding of a firm's financial performance. The course then addresses how this financial health information can be used as a foundation upon which to design and implement initiatives for increased productivity and profitability.

Who Should Take This Course?

This course is necessary for all professionals who deal with financial reports and need to understand how the data can be analyzed to accurately assess their organization's financial strength.

Course Format

eCornell takes a problem-based approach to learning, and builds each course around realistic case studies and scenarios. All courses are self-paced, and are facilitated by an eCornell instructor, who leads the online discussions and is available to answer any questions about the course content.

This course contains the following modules:

• Asset Management Ratios
  • The purpose, audience, and method of computation of asset management ratios
  • Using these ratios to evaluate the asset management of the business
  • Interpreting these ratios, and identifying ways to improve them

• Solvency and Capital Structure Ratios
  • The purpose, audience, and method of computation of liquidity, coverage, and leverage ratios
  • Using these ratios to assess short- and long-term solvency
  • Interpreting these ratios, and identifying ways to improve them
• Profitability Ratios and Dupont Analysis
  • The purpose, audience, and method of computation of margin ratios, return on assets, and equity ratios, and Dupont method
  • Using these ratios to assess profitability
  • Interpreting these ratios, and identifying ways to improve them
• Valuation Ratios
  • The purpose, audience, and method of computation of equity price multiples and enterprise value multiples
  • Using these ratios to compute valuation
  • Interpreting these ratios, and identifying ways to improve them

Benefits to the Learner

After completing this course, participants will be able to:

• Use ratio analysis to identify areas of strong financial performance and those that need improvement
• Accurately assess the financial performance of a department, unit, or organization relative to its competitors or to its own past performance

Authoring Faculty

Steven Carvell, Ph.D., Associate Professor and Associate Dean for Academic Affairs

Scott Gibson, Ph.D., Assistant Professor

Sponsoring School

Cornell University's School of Hotel Administration

Total Learning Time

Approximately five to six hours over a period of two weeks.

Certificate Information

This course can be applied toward the following certificates:

• Business Leadership Skills
• Financial Management

Other Requirements

Participants in this course need one of the following financial calculators:

• Hewlett-Packard 12C
• Texas Instruments BA II Plus

Both are available for purchase directly from Amazon.com.

Prerequisites

This course requires student knowledge of financial statements. If you are unfamiliar with financial statements, we recommend completing Understanding Financial Statements (HAME513) prior to enrolling in this course.

ACE CREDIT Recommendation

This course contributes to an eCornell Certificate Program that has been recommended for college credit by the American Council on Education's College Credit Recommendation Service (CREDIT). Please refer to the Certificate information page for additional details.

HRCI Recertification

This course been approved for six (6) Strategic Management recertification credit hours toward SPHR and GPHR recertification and six (6) recertification credit hours toward PHR, SPHR, and GPHR recertification through the Human Resource Certification Institute. Please contact the Human Resource Certificate Institute (HRCI) for further information about certification or recertification.

Project Management Institute Professional Development Units

This course qualifies for 6.75 Professional Development Units (PDUs) from the Project Management Institute (PMI) for Professional Project Managers (PMPs) seeking ongoing education and professional development for continuing certification. eCornell is a Global Registered Education Provider of PMI. PDUs are designated as Category 3.