Ratio Analysis: Finding The Data
  1. Ratio Analysis: Introduction
  2. Ratio Analysis: Finding The Data
  3. Ratio Analysis: Using Financial Ratios

Ratio Analysis: Finding The Data

Before we delve into the different ratios and how they work, let's briefly discuss where you can find the data for each ratio.

The first step in ratio analysis is to find the data. For the 19 ratios we will be taking you through we will be using a fictitious company, Cory's Tequila Co. All the data for these examples will be provided, but when you decide to do this on your own there are several different areas where you can find the latest financial figures for a particular company. Finding financial reports is easier than ever thanks to the Internet, here are some sources:

  • Company Websites - Almost every public company has a website or investor relations department. For the most current quarterly or annual report you might want to check in these places first. Walt Disney is an excellent example of a company that uses the web to get information out to shareholders and prospective investors. It takes no time at all to find their investor relations section.
  • Securities and Exchange Commission (SEC) - The information posted in the electronic gathering, analysis and retrieval (EDGAR) database includes the annual report (known as the 10-K), quarterly report (10-Q), and a myriad of other forms that contain every type of financial data.
  • Yahoo! Finance - A touchstone for many individual investors, Yahoo! Finance is a great resource for financial news, and lays out ratios and performance data for individual companies.
  • Hoovers.com - A great site for company analysis; some of the data requires a subscription.

These are by no means the only places to find the financial statements, there are countless free and pay sites out there offering similar features. Now let's move onto the meat of this tutorial: the ratios.

Ratio Analysis: Using Financial Ratios

  1. Ratio Analysis: Introduction
  2. Ratio Analysis: Finding The Data
  3. Ratio Analysis: Using Financial Ratios
RELATED TERMS
  1. Current Ratio

    The current ratio is a liquidity ratio measuring a company's ...
  2. Key Ratio

    A mathematical ratio that illustrates and summarizes the current ...
  3. Accounting Ratio

    A way of expressing the relationship between one accounting result ...
  4. Combined Ratio

    A measure of profitability used by an insurance company to indicate ...
  5. Cash Ratio

    The ratio of a company's total cash and cash equivalents to its ...
  6. Operating Ratio

    A ratio that shows the efficiency of a company's management by ...
RELATED FAQS
  1. How do stock dividends affect the retained earnings account?

    Understand the difference between financial ratio analysis and accounting ratio analysis. Learn why ratio analysis is important ... Read Answer >>
  2. What role does ratio analysis play in valuing a company?

    Learn about the role of ratio analysis in determining company value, including some of the most common ratios used by modern ... Read Answer >>
  3. To what extent should you take a company's liquidity ratio into account before investing ...

    Find out how important it is for an investor to know a company's liquidity ratio before deciding to invest, and why relying ... Read Answer >>
  4. How does ratio analysis make it easier to compare different companies?

    Learn what ratio analysis is, how investors can compare companies within the same sector using ratio analysis and how ratios ... Read Answer >>
  5. What types of information does one need to perform a thorough financial analysis?

    Understand what types of information an analyst needs to examine for a thorough financial analysis, and learn how to use ... Read Answer >>
  6. Why do shareholders need financial statements?

    Discover the importance of a company's financial statements for stock shareholders in evaluating their equity investment ... Read Answer >>
Hot Definitions
  1. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  2. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  4. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  5. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
Trading Center