Week 10: Discussion #1
“Financial Analyst Skills”
• Based on the information presented in the e-Activity, recommend the skills that are required to be a successful Financial Analyst, indicating how the role of a Financial Analyst adds value to a company. Provide support for your answer.
o Confident Decision Maker: The financial analyst provides advice to brokers, investors, individuals and others regarding investments to include stocks, bonds, and commodities. Judgment calls regarding predictions about how the investment will perform in the future must be stated in a confident manner because sometimes those calls are wrong and the Analyst should be able to accept the ...view middle of the document...
▪ Quick ratio: This is a gauge of short term liquidity of a company. It is helpful in measuring the company’s short term debts with its most liquid assets.
▪ Return on equity: The amount of net income returned as a percentage of shareholders equity is referred to as ROE. It estimates the profitability of a corporation by revealing the amount of profit generated by the company with money invested by the shareholders.
Week 10: Discussion #2
• Determine three key ratios that should be used when evaluating the financial performance of a company, indicating what information this will reveal to an analyst and the impact to decisions made about the company.
o Profitability ratios: includes the return on total assets, capital employed, net profit margin and net asset turnover to determine how profitable the company is
o Short-term liquidity ratios: includes the current ratio and acid test ratio to...