Financial ratios

Free IMA CMA Part 2 (Strategic Financial Management) lesson in Financial Statement Analysis. 13 min read, ~1,882 words.

Liquidity is paying bills due within a year (12-month horizon). Solvency is surviving the long-term debt load and capital structure. Cash conversion cycle = DSI + DSO − DPO. Shorter frees working capital. DuPont ROE = Net Margin × Asset Turnover × Equity Multiplier (Total Assets / Total Equity), the...