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FINANCIAL MARKET COURSES

Credit Analysis – Performance & Other Measures

This course looks at how information from financial statements can be used to calculate key financial ratios such as return on equity. It also explains other ratios that can be calculated using information from other sources such as share prices.

  • OBJECTIVES

    On completion of this course, you will be able to:

    Estimate return on equity and recognize the key drivers associated with it

    Calculate return on total assets, identify its key components, and assess the effectiveness of cost controls

    Interpret market-related measures, such as earnings per share and the price-earnings ratio

  • COURSE OUTLINE

    Topic 1: Return on Equity (ROE)

    Overview of ROE

    ROE Comparisons

    Trends in ROE

    Drivers of ROE

    o Profit Margin

    o Asset Turnover

    o Leverage

    Topic 2: Return on Total Assets (ROTA)

    Overview of ROTA

    Key Drivers of ROTA

    Effectiveness of Cost Controls

    Interest & Tax Burden

    o Interest Burden

    o Tax Burden

    Assessing Asset Turnover

    o Decomposing Asset Turnover

    Topic 3: Market-Related Measures

    Overview of Market-Related Measures

    Earnings Per Share (EPS)

    o EPS: Interpretation

    Price/Earnings Ratio

    o P/E Ratio: Interpretation

    Share Prices & Expectations

    Market-to-Book Ratio

    o Market-to-Book Ratio: Interpretation

  • PREREQUISITE KNOWLEDGE

  • ESTIMATED COMPLETED TIME

    60 Minutes

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