The analogy between a financial analyst certification program and a ratio analysis course
Table of Contents
The Financial Analyst Certification Programs and the ratio analysis courses are online certificate courses that will enhance your qualities in particular topics and guide you to become one of the best analysts in the field. Let us understand what each course is about and how it can help you.
Financial analysis and its types -
Financial analysis can be defined as a process that is led by the financial statement preparation of a company and then continued using various forms of analysis to assist business, investment, and financial decisions. Each method of analysis has its own specific purpose. They are -
- Vertical analysis - Vertical analysis is mainly used during the making of the financial statement or the balance sheet.
- Horizontal analysis - The horizontal analysis is done to examine a spike or decline in the company data. The results are then used to determine a detailed examination of the finances.
- Profitability analysis - Profitability analysis is done to check the profits of the business. This analysis is done to understand the costs of the company and what can be done to optimize it correctly.
- Liquidity analysis - The liquidity analysis involved the calculation of the turnover rates of the company including the accounts, assets, working capital, and more. The general outcome of this analysis is to understand whether the company requires additional capital.
- Valuation analysis - The valuation analysis is done to understand the valuation of the business like the cashflow valuation, the subsidiaries, and the compilation of the value of individual assets.
- An industrial comparison - This is a very important analysis. This describes the place at which your company stands in comparison to the market or the average result of the industry. This also helps in understanding the strategies of the business.
- Multi-company analysis - This analysis takes place when there is a comparison between two companies that belong to the same industry. This helps to determine the values of different companies and which ones are worthy of acquisitions.
Ratio analysis -
A ratio analysis course will empower you with all the information about stocks and shares that will guide a person to make the right decision about investments. A course on ratio analysis guides a person to do an in-depth analysis of the company’s financial statements and quantitative data. You will be able to finally determine if the company is worth investing in.
The course entails a lot of benefits as well. Apart from calculating the ratios of the company, it helps you analyze the pros and cons and then make an informed decision. A ratio analysis is also used to analyze the company earnings, the course helps you do the same. The topic mainly covers the different types of ratios like Activity Ratios, Solvency Ratios, Liquidity Ratios, Profitability Ratios, and Valuation Ratios.
The mission of these courses is to help students understand the finances of your organization and advance in their careers. It will give you the opportunity to understand, evaluate your company values, and then make an informed decision.
The two courses are different and unique in their own way, however, if combined, they can really polish your skills. Several online courses like the Financial Analyst Course and Financial Modelling Course will guide you further.
You can check out the Financial Analysis Prodegree in Collaboration with KMPG if you wish to acquire all the skills you will need as a financial analyst and learn techniques such as financial ratio analysis. Financial modelling, statistical functions, financial statement preparation, and basic accounting are some other common skills required by financial analysts.