Financial Analysis
VentureLine (www.ventureline.com) has distilled basically every business and financial ratio analysis tool methodology learned by MBAs in business schools into a user-friendly Internet server-hosted service. The ratio analysis products offered by VentureLine satisfy a demonstrated and validated market need. The VentureLine MBA Internet site is a virtual repository of all known MBA financial analysis business tools. VentureLine provides entrepreneurs, investors, businesspersons, college students, and the general population with an intelligent value-added globally accessible virtual MBA. Fundamental financial statement analysis with accounting ratios to industry ratios comparisons are instantaneous on any publicly traded company.
Ratio analysis involves conversion of financial numbers for a firm into financial ratios. Ratio analysis allows comparison of one firm to another or the industry ratios for their industry. Since ratios look at relationships inside the firm, a firm of one size can be directly compared to a second firm (or a collection of firms) that may be larger or smaller or even in a different industry. Financial ratio analysis is a method of comparison not dependent on the size of either firm. Financial ratios provide a broader basis for comparison than do raw numbers. In the VentureLine database the comparison is conducted against the industry ratio by SIC Code in which each particular listing is associated.
VentureLine’s MBA (www.ventureline.com) contains real-time SEC traceable ratio analysis products that provide for basically everything a business executive, entrepreneur, small business owner, private investor, or college student needs in the creation of a new business or the analysis of planned or existent enterprises. On-line results are immediately available to the user. The ratio analysis and industry analysis tools are very useful for individuals to instantly assess a company or industry by making two basic types of comparisons. First, the analyst can compare a present financial ratio with past (or expected) financial ratios for the organization to determine if there has been an improvement or deterioration or no change over time. Second, the financial ratio analysis of one organization may be compared with similar organizations financial ratios or with the industry ratios average at the same point in time. This is a type of “benchmarking” so that one may determine whether the organization is “average” in performance or doing better or worse than others. For the professional, conducting such in-depth financial ratio analysis is critical, allowing an analyst to make an informed business or investment decision.
VentureLine standard financial ratio analysis report provides:
- 28 of the most critical financial ratios for all publicly listed companies and their industries
- Tools to conduct ratio analysis on privately held companies
- 5-Years of SEC traceable financial ratios data in Excel format
- No waiting - financial ratios reports are instantly available
- No downloads or software to install - just click a button
- Altman Z-Score potential for bankruptcy prediction
- Sustainable Growth Rate prediction
Industry financial ratios provide the best methodology to judge how well a company or investment is performing. In evaluating any investment it is imperative that the company or investment be compared to the performance of the industry in which it competes. VentureLine provides the latest of data, less than 30 days old, for every industry within the public market. Ratio analysis reports on industry financial ratios are immediate and available for download or printing at will.
Industry financial ratios can reveal much about an industry. However, there are several points to keep in mind about ratios. First, they are “flags” indicating areas of strength or weakness. One or even several financial ratios might be misleading, but when combined with other knowledge of an industry, industry analysis utilizing financial ratios can tell much about that industry. Second, there is no single correct value for a financial ratio. The observation that the value of a particular financial ratio is too high, too low, or just right depends on the perspective of the analyst. Third, financial ratios are meaningful only when they are compared with some standard, such as another industry trend, financial ratio trend, a financial ratio trend for the specific sector being analyzed.
In industry analysis, using trends, industry ratios are compared over time, typically years. Year-to-year comparisons can highlight trends and point up the need for action. Trend ratio analysis works best with five years of ratios.
The second type of ratio analysis, cross-sectional analysis, compares a company’s financial ratios to industry ratios averages. Another popular form of cross-sectional analysis compares the financial ratios of two or more companies in similar lines of business.
VentureLine’s industry analysis report is broken down into the various financial ratios categories:
- Predictor Ratios indicate the potential for growth or failure.
- Profitability Ratios which use margin analysis and show the return on sales and capital employed.
- Asset Management Ratios which use turnover measures to show how efficient the companies within the sector perform in operations and use of assets.
- Liquidity Ratios which give a picture of an industry’s short term financial situation or solvency.
- Debt Management Ratios which show the extent that debt is used in the sector’s capital structure.
The bottom-line value of VentureLine is their ability to provide instantly available very low-cost fundamental ratio analysis of any company or industry. VentureLine is the premiere online provider of accounting ratios and industry ratios comparisons for the business, investor and student communities.