Kamal Lidder | Financial Analysis | Horizontal Analysis
According to Kamal Lidder, to calculate a growth rate, the horizontal analysis compares financial data from many years to one another. This will make it easier for an analyst to see significant trends and evaluate if a company is expanding or contracting.
Types of Financial Analysis Vertical Horizontal Leverage Growth Profitability Liquidity Efficiency Cash Flow Rates of Return Valuation Scenario & Sensitivity Variance 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.
Vertical Analysis this kind parts of the statement are their percentages are expressed by dividing them by revenue. The results of this activity should be compared to those of other businesses in the same sector to determine how well the company is doing.
In
of financial analysis, different
income
examined and
Leverage Analysis
Leverage ratios are one of the most widely used methods by analysts to evaluate business performance. Comparing one financial metric, like total debt to total equity for a company, can assist get a full view of the capital structure. The debt/equity ratio is the outcome.
Growth Rates
Year-over-year (YoY) Analysis of regression Bottom-up research Top-down evaluation various forecasting techniques Any financial analyst's job involves a significant amount of both analyzing past growth rates and forecasting future ones. Typical illustrations of growth analysis include:
Profitability Analysis Lidder says that an analyst determines the attractiveness of a as part of an analysis approach known as Examples of typical metrics are as follows:
Gross margin EBITDA margin EBIT margin Net profit margin Kamal
company's economics
income statement
profitability.
profitability
Liquidity Analysis
This type of financial analysis focuses on the balance sheet, particularly the company's ability to meet its short-term debt obligations. Examples of liquidity analysis include the following:
Current ratio
Acid test Cash ratio
Net working capital
Assetturnoverratio Fixedassetturnoverratio Cashconversionratio Inventoryturnoverratio Anythoroughfinancialstudymust includeefficiencyratios.These ratiosexaminehoweffectivelya businessutilizesitsresourcesand employsthemtoproducerevenue andcashflow. Typicalefficiencyratiosareas follows: Efficiency Analysis
Kamal Lidder says that the ability of a corporation to generate cash flow is highly valued since, as they say in finance, cash is king. The cash flow profiles of organizations are a frequent focus for analysts in a variety of finance occupations. Cash Flow
Investors, lenders, and financial professionals in general are ultimately concerned with the type of risk-adjusted rate of return they may achieve on their capital. As a result, the sector must evaluate rates of return on investment (ROI). Rates of Return
Valuation Analysis
Financial analysis includes the process of determining a company's value, and experts in the field invest a lot of time creating financial models in Excel. There are numerous ways to determine a company's value, therefore analysts must combine several of these techniques to produce a reliable estimate.
Scenario & Sensitivity Analysis
Risk measurement through the scenario and sensitivity analysis is another aspect of financial modeling and valuation. Building a model to evaluate a company is a task that is inherently quite uncertain because it involves making predictions.
Theprocessofcomparing actualresultstoaplanor forecastisknownas varianceanalysis.According toKamalLidderitisacrucial stepintheinternalplanning andbudgetingprocessata runningbusiness,especially forexpertsintheaccounting andfinancedivisions. Variance Analysis
Thanks For Watching Kamal Lidder
