[Verse 1] When you open up those statements, numbers everywhere you see Activity and liquidity, they tell a company's story Inventory turnover spinning, receivables collecting fast Current ratio shows the present, quick ratio built to last [Chorus] A-L-S-P-V, ratios help you see Activity, Liquidity, Solvency Profitability, Valuation key Financial analysis sets you free Common size and DuPont too Cross-sectional, time-series view Pro-forma forecasts coming through Analysis techniques for me and you [Verse 2] Debt to equity shows the leverage, times interest earned Solvency ratios tell us if those payments can be turned ROE and ROA measure profits, margins show efficiency Valuation multiples help us see what fair price ought to be [Chorus] A-L-S-P-V, ratios help you see Activity, Liquidity, Solvency Profitability, Valuation key Financial analysis sets you free Common size and DuPont too Cross-sectional, time-series view Pro-forma forecasts coming through Analysis techniques for me and you [Bridge] DuPont breaks it down in parts Three or five to see the heart ROE equals margin times turnover times equity multiplier Common size makes percentages, vertical shows structure clear Horizontal tracks the changes year by year by year [Verse 3] Cross-sectional compares companies within the same industry Time-series shows the trends across the years historically Pro-forma statements forecast future, what the numbers might become Segment reporting breaks it down till analysis is done [Chorus] A-L-S-P-V, ratios help you see Activity, Liquidity, Solvency Profitability, Valuation key Financial analysis sets you free Common size and DuPont too Cross-sectional, time-series view Pro-forma forecasts coming through Analysis techniques for me and you [Outro] From the balance sheet to income statement Cash flow tells the tale Financial analysis techniques Will help your studies never fail
← Bond Valuation and Yield Analysis | Equity Valuation Fundamentals →