3 Liquidity Ratios Every Financial Analyst And Investor MUST Know!

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3 Liquidity Ratios Every Financial Analyst And Investor MUST Know!

Рет қаралды 47,187

Күн бұрын

In this video I will teach you 3 financial liquidity ratios that are commonly used by financial analysts and investors. Rather than just looking at the cash balance, let’s dive deeper by measuring the liquid assets relative to the firm's obligations. I will also provide an overview of the balance sheet.
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Пікірлер: 88

@alexdavidson9204 4 жыл бұрын

That is probably the best & most succinct explanation of these 3 ratios. Look forward to watching more of your videos.

@TheFinancialController 4 жыл бұрын

Thanks Alex!

@AhMauy 5 ай бұрын

Thank you so much for sharing your knowledge with us. Can you help me understand this: why should a company vehicle a “fixed asset” and not “other asset: equipment “ ?

@paulmartin3296 4 жыл бұрын

Its a good explanation of the ratios, however saying quick ratio of 0.8 is poor is a little miss leading as this ratio needs to be assessed against industry averages to really understand if this is poor or not.

@TheFinancialController 4 жыл бұрын

It's a good point, although I'll say that when a company has less liquid assets than it's current obligations, it's rarely a good situation.

@michellewright99 3 жыл бұрын

This was very insightful as it gives me new ideas on how to look at my personal financial health in addition to understanding why businesses make some of the decisions they do surrounding invoicing, collections and inventory.

@TheFinancialController 3 жыл бұрын

Thanks Michelle!

@cheikhwely 2 жыл бұрын

Excellent content and easily explained concepts. Your students or clients are not likely to lack clarity in determining the health of their finances. Thank you and keep up the good work :)

@gw8755 3 жыл бұрын

Great explanation. Could you please make a video about the interpretation of the ratio calculations, when we compare them to the previous year or compare to other company's ratio. Why is is Better or Worst? Thank you!

@TheFinancialController 3 жыл бұрын

Sure will do

@gw8755 3 жыл бұрын

@@TheFinancialController Thank you. Looking forward.

@jessiesi1412 3 жыл бұрын

Very good explanations! I learned these ratios. I have a question about the AR and Credit Sales. What is difference between these two terms and where could we find credit sales in the financial statement? Please advice! Thanks!

@TheFinancialController 3 жыл бұрын

Good question! pls google the question "what's the difference between ..&.." and also what is "Credit Sales", plenty of articles on this online.

@naveenkumarsharma9445 3 жыл бұрын

Hi Bill, Thanks for your videos. You are great explainer. Could you please make a videos on some important terms with examples for understanding like used in this example...Def. revenue,AR,AP,Equity etc.

@TheFinancialController 3 жыл бұрын

Hi sure

@pasufi 8 ай бұрын

great video! I was however confused by "credit sales" - where can I find it in the financial statements?

@PJMcInerney 6 ай бұрын

Income Statement

@helena.5760 3 жыл бұрын

I really like this, it refreshes my memory

@TheFinancialController 3 жыл бұрын

Thanks Helen:)

@nitikaverma1810 8 ай бұрын

very well explained... and really amazing content

@TheFinancialController 8 ай бұрын

Glad you think so!

@sarahn3935 3 жыл бұрын

Perfect and easy explanation. Thank you 🙏🏻

@1985argiris Жыл бұрын

Question: if we reserved for Bad Debt and obsolescence inventory, are these amounts being deducted from A/R and Inventory respectively when we calculate the ratios?

@kodirjonrakhimov7657 11 ай бұрын

Can you explain please, where $10k comes from in the formula of DSO as Credit sales ?

@rajamanisubramaniyan9114 3 жыл бұрын

Hi Bill Hanna Greetings !!! Hope you and your family are safe !!! Good Video to understand in a very simple manner. Requesting you to go on more video on Finance Analyst. Thanks !!! Hope you will have a good day.

@TheFinancialController 3 жыл бұрын

Thanks 🙏 will do

@cinthiasabillon144 3 жыл бұрын

Thanks for making these videos. They are very well explained!

@TheFinancialController 3 жыл бұрын

Appreciate it Cinthia!

@yinyin7614 2 жыл бұрын

Super helpful video.

@MsFender32 3 жыл бұрын

Excellent and thorough explanation. Thank you, sir!

@TheFinancialController 3 жыл бұрын

Thanks oleg

@aneezasonisoni9866 3 жыл бұрын

I am learing alot from your videos. Excellent explaination. 👍

@TheFinancialController 3 жыл бұрын

Thanks 🙏

@chirayugarg7207 4 жыл бұрын

Sir in case of a banking company what should be the ideal quick ratio? 2)Can we use DSO to calculate bank's ability to convert npa's into cash or recover them? Thanks for the video sir.

@TheFinancialController 4 жыл бұрын

Hey chirayu I am not really an expert on banks, so not sure there.

@paulmartin3296 4 жыл бұрын

Hi Chirayu, You need to review a banks balance sheet differently to that of a companies balance sheet, there is alot more going on in terms of understanding the solvency of a ban, it is a subject all of its own.

@chirayugarg7207 4 жыл бұрын

@@paulmartin3296 thanks for the reply

@rachedecheikh8276 2 жыл бұрын

Thank you for this useful course. Do you have some financial diagnostics report ? I want to improve my vocabulary ( how I write a repot ). Thanks you in advance.

@a.bismail6492 Жыл бұрын

I may be incorrect. but isn't quick ratio Current assets/Liabilities and current ratio current assets-Inventory/Liabilities?

@550manu 2 жыл бұрын

very nicely explained. thanks and regards

@TheFinancialController 2 жыл бұрын

Thanks brother

@verbesta1 3 жыл бұрын

Hi Bill, I rewatched the video three times, I wondered why I can't find the credit sales number. Did you just assume it a number $10,000 here only for calculation practice? Thanks.

@nokafisher2771 3 жыл бұрын

lol I knew someone was going to ask this question so scrolled down and yes found the question. 😂

@kibimacheru6228 3 жыл бұрын

I like your videos... always simple and easy to understand, Can they ask this kind of questions on an assessment for a junior Financial controller? I have an assessment this week for a junior financial controller and I don't know what to expect

@TheFinancialController 3 жыл бұрын

Yes possible. Best of luck

@kibimacheru6228 3 жыл бұрын

@@TheFinancialController Thank you so much

@jinchen1734 4 жыл бұрын

Excellent explanation.👍 Keep up the good work! 💪

@TheFinancialController 4 жыл бұрын

Thanks Jin!

@MissD0829 Жыл бұрын

Hi, great video. I'm an aspiring financial analyst and love your insightful videos. Do you offer mentorship support?

@TheFinancialController Жыл бұрын

Hi Doris, not at the moment, but maybe in the future.

@user-vh5kn Жыл бұрын

Any video on trend analysis?

@princesspalqisa2423 3 жыл бұрын

I am from Somalia I study Bank and finance

@shreenivasdushi5299 3 жыл бұрын

great man...sounds good....keep going and rocking...

@TheFinancialController 3 жыл бұрын

Thank you 🙏

@GPD989 5 ай бұрын

How to find credit sales which you have taken 10000 in this case ?

@dejib.3930 8 ай бұрын

Beautiful.

@ochanbrian1361 Жыл бұрын

Well explained. keep this up

@thatswhatshesaidbro 4 жыл бұрын

Great video thanks another good one to add is fcf/net debt if a business can not pay its debt within 5 years of fcf move on!

@TheFinancialController 4 жыл бұрын

Thanks Andre, always appreciate your input!

@thatswhatshesaidbro 4 жыл бұрын

The Financial Controller what would you say are the 3 liquidity ratios specifically for banks ?

@TheFinancialController 4 жыл бұрын

Hey Andre, am not really an expert on banking, so not so sure.

@ScriptedOcean 4 жыл бұрын

Super Helpful Thank you!

@TheFinancialController 4 жыл бұрын

Thank you!

@jzhuo5145 3 жыл бұрын

very clear and good explanation.t hank u

@TheFinancialController 3 жыл бұрын

Glad it was helpful!

@jansyavi 3 жыл бұрын

Super uitleg, your great, but where does ths 10, 000 credit sales come from in the Balance Sheet?

@marynayakovenko5539 3 жыл бұрын

Hi, Bill! I'd like to thank you for the amazing work you're doing! Could u explain the difference between A/R and credit sales? Is it just the portion of Sales that used to be A/R? Thanks a lot.

@TheFinancialController 3 жыл бұрын

Thanks. Credit sales is a certain portion or sales/revenue that is “on credit” meaning no cash collected on the spot. In essence most company’s sales are credit sales, unless we are talking about a restaurant

@muralibura362 Жыл бұрын

What is the indication for quick ratio

@sakshi23ca 3 жыл бұрын

Thank you 😊

@malamofficial7558 9 ай бұрын

Deferred revenue is unearned income?

@ibrahimbaimbakoroma60 2 жыл бұрын

I have an assignment: what are the financial accounting tools used to monitor liquidity. Can someone pls list them for me?

@malamofficial7558 9 ай бұрын

Which data of credit sale you take from?

@ziyadalshaban775 2 жыл бұрын

That was amazing, just one question where i can find credit sales in financial sheet

@TheFinancialController 2 жыл бұрын

All revenue/sales in this example are Credit Sales

@HepCatJack 3 жыл бұрын

What about Debt to Equity ratio and Debt Ratio ?

@blu4174 3 жыл бұрын

Good explanation sir I am from India I want to know what all questions are asked for the role of financial analyst as a fresher in the interview

@TheFinancialController 3 жыл бұрын

ok more videos to follow on that swathi

@drsshetty12 Жыл бұрын

I wanna learn from you 🎉🙏

@meytithveasna339 3 жыл бұрын

Hi Bill what should I prepare for an interview for finance analyst? Please give some tips because I prepare an interview as a finance analyst

@TheFinancialController 3 жыл бұрын

Watch my interview and analysis playlists

@kamwaniamit 3 жыл бұрын

If AR is $20000, how come Credit Sales be $10000? Also how to Credit Days to be taken incase multiple options of 30, 45, 60 & 90 days?

@TheFinancialController 3 жыл бұрын

credit sales refers to sales for which the customer will pay in the future. Some sales are made for cash in this case.

@sunnyb831 2 жыл бұрын

How can A/R be 20 k when your credit sales is only 10 k ?

@TheFinancialController 2 жыл бұрын

Slow paying customers.

@sunnyb831 2 жыл бұрын

@@TheFinancialController Thanks. From where do we collect sales credit. Does it come from Trial Balance

@jeycee6807 3 жыл бұрын

The most handsome CPA 😍❤️

@TheFinancialController 3 жыл бұрын

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