Financial Analysis Concepts and Techniques

The video tutorial provides a comprehensive overview of financial analysis, detailing 12 key types including vertical, horizontal, leverage, growth rates, profitability, liquidity, efficiency, cash flow, rates of return, intrinsic, scenario, and variance analysis. Each type is explained with its purpose and application, emphasizing the importance of using these methods together for a complete understanding of a company's performance and future prospects.

What is the primary goal of financial analysis?

• To determine a company's market share

• To assess a company's past performance

• To predict future stock prices

• To evaluate a company's future performance

In vertical analysis, what is each line item on the income statement compared to?

• Total assets

• Net income

• Revenue

• Equity

What is the main focus of horizontal analysis?

• Comparing companies within the same industry

• Analyzing year-over-year performance

• Assessing short-term liquidity

• Evaluating cash flow generation

Which of the following is a common leverage ratio?

• Gross profit margin

• Debt-to-equity ratio

• Current ratio

• Return on investment

What does profitability analysis primarily assess?

• A company's asset utilization

• A company's cash flow generation

• A company's ability to meet short-term obligations

• A company's income relative to its revenue

Which analysis focuses on a company's short-term ability to meet its obligations?

• Liquidity analysis

• Intrinsic analysis

• Efficiency analysis

• Profitability analysis

What is the expression 'cash is king' associated with?

• Profitability analysis

• Cash flow analysis

• Efficiency analysis

• Leverage ratios

What is the ultimate measure of return for an investor?

• Net profit margin

• Internal rate of return

• Current ratio

• Debt-to-equity ratio

Which approach is NOT a method of valuing a business?

• Horizontal approach

• Cost approach

• Market approach

• Discounted cash flow approach

What does variance analysis seek to understand?

• The company's market value

• The cause of over and under performance

• The company's cash flow

• A company's growth rate