Welcome to Financial Ratios
Learn how to assess financial performance through a credit analyst lens.
Financial ratios are an important tool in commercial credit assessment because they help a credit analyst translate financial statement information into meaningful measures of profitability, liquidity, leverage, efficiency and debt servicing capacity.
Ratios are most useful when interpreted in context. A single ratio rarely provides a complete view of a borrower’s financial position. A credit analyst needs to consider trends over time, compare results with historical performance and relevant benchmarks, and understand the underlying drivers of any movement.
In this module, you will learn how to calculate and interpret key financial ratios, assess changes in financial performance and identify trends or warning signs that may affect creditworthiness and repayment capacity.
You will also learn how to combine ratio analysis with broader financial information and commercial judgement to form a more complete credit assessment.
By the end of this module, you will be able to use financial ratios to assess financial performance, identify key credit risks and support well-reasoned credit recommendations.
What to Expect in This Module
You will work through practical commercial lending scenarios that demonstrate how financial ratios are used in credit assessment.
You will learn to:
- Calculate and interpret key financial ratios across profitability, liquidity, leverage, efficiency and debt servicing.
- Analyse ratio trends over time and compare results with historical performance and relevant benchmarks.
- Identify financial strengths, weaknesses and early warning indicators through ratio analysis.
- Apply ratio insights to support financial analysis and credit assessment.
How You Will Learn
Throughout this module, you will complete Review Questions and Final Questions & Exercises designed to reinforce your understanding and test your practical application.
You will:
- Calculate and interpret key financial ratios accurately.
- Analyse trends and movements to identify changes in financial performance and emerging credit risk.
- Compare ratio results with historical performance and relevant benchmarks.
- Use ratio insights to support clear and well-reasoned credit recommendations.
Current Status
Price
Get Started
Module Content
- Mentor feedback is provided only after all Review Questions for the entire module have been completed, not after individual topics. Feedback will be delivered through the Review Questions Summary.
- You may update your Review Question responses at any time. If you choose to reattempt the Review Questions for a specific topic, your previous responses will not be visible and you will be required to answer all questions for that topic again.
- If you prefer not to reattempt individual topics, you can instead update your responses via the Review Questions Summary.
- From there, you can download all of your responses, review and edit them as needed, and re upload the document for mentor review.
- Once the mentors are satisfied with your responses across all Review Questions in the module, you will be progressed and granted access to the Final Questions and Exercise(s).
Need support?
For help with modules, review questions, final questions and exercises, or assessments, please contact training@creditanalystacademy.com
For technical or IT related support, please contact support@creditanalystacademy.com
You can also visit our Resources Page for additional guidance and information.
- Mentor feedback is provided only after all Review Questions for the entire module have been completed, not after individual topics. Feedback will be delivered through the Review Questions Summary.
- You may update your Review Question responses at any time. If you choose to reattempt the Review Questions for a specific topic, your previous responses will not be visible and you will be required to answer all questions for that topic again.
- If you prefer not to reattempt individual topics, you can instead update your responses via the Review Questions Summary.
- From there, you can download all of your responses, review and edit them as needed, and re upload the document for mentor review.
- Once the mentors are satisfied with your responses across all Review Questions in the module, you will be progressed and granted access to the Final Questions and Exercise(s).
Need support?
For help with modules, review questions, final questions and exercises, or assessments, please contact training@creditanalystacademy.com
For technical or IT related support, please contact support@creditanalystacademy.com
You can also visit our Resources Page for additional guidance and information.
- Mentor feedback is provided only after all Review Questions for the entire module have been completed, not after individual topics. Feedback will be delivered through the Review Questions Summary.
- You may update your Review Question responses at any time. If you choose to reattempt the Review Questions for a specific topic, your previous responses will not be visible and you will be required to answer all questions for that topic again.
- If you prefer not to reattempt individual topics, you can instead update your responses via the Review Questions Summary.
- From there, you can download all of your responses, review and edit them as needed, and re upload the document for mentor review.
- Once the mentors are satisfied with your responses across all Review Questions in the module, you will be progressed and granted access to the Final Questions and Exercise(s).
Need support?
For help with modules, review questions, final questions and exercises, or assessments, please contact training@creditanalystacademy.com
For technical or IT related support, please contact support@creditanalystacademy.com
You can also visit our Resources Page for additional guidance and information.
- Mentor feedback is provided only after all Review Questions for the entire module have been completed, not after individual topics. Feedback will be delivered through the Review Questions Summary.
- You may update your Review Question responses at any time. If you choose to reattempt the Review Questions for a specific topic, your previous responses will not be visible and you will be required to answer all questions for that topic again.
- If you prefer not to reattempt individual topics, you can instead update your responses via the Review Questions Summary.
- From there, you can download all of your responses, review and edit them as needed, and re upload the document for mentor review.
- Once the mentors are satisfied with your responses across all Review Questions in the module, you will be progressed and granted access to the Final Questions and Exercise(s).
Need support?
For help with modules, review questions, final questions and exercises, or assessments, please contact training@creditanalystacademy.com
For technical or IT related support, please contact support@creditanalystacademy.com
You can also visit our Resources Page for additional guidance and information.
- Mentor feedback is provided only after all Review Questions for the entire module have been completed, not after individual topics. Feedback will be delivered through the Review Questions Summary.
- You may update your Review Question responses at any time. If you choose to reattempt the Review Questions for a specific topic, your previous responses will not be visible and you will be required to answer all questions for that topic again.
- If you prefer not to reattempt individual topics, you can instead update your responses via the Review Questions Summary.
- From there, you can download all of your responses, review and edit them as needed, and re upload the document for mentor review.
- Once the mentors are satisfied with your responses across all Review Questions in the module, you will be progressed and granted access to the Final Questions and Exercise(s).
Need support?
For help with modules, review questions, final questions and exercises, or assessments, please contact training@creditanalystacademy.com
For technical or IT related support, please contact support@creditanalystacademy.com
You can also visit our Resources Page for additional guidance and information.
- Mentor feedback is provided only after all Review Questions for the entire module have been completed, not after individual topics. Feedback will be delivered through the Review Questions Summary.
- You may update your Review Question responses at any time. If you choose to reattempt the Review Questions for a specific topic, your previous responses will not be visible and you will be required to answer all questions for that topic again.
- If you prefer not to reattempt individual topics, you can instead update your responses via the Review Questions Summary.
- From there, you can download all of your responses, review and edit them as needed, and re upload the document for mentor review.
- Once the mentors are satisfied with your responses across all Review Questions in the module, you will be progressed and granted access to the Final Questions and Exercise(s).
Need support?
For help with modules, review questions, final questions and exercises, or assessments, please contact training@creditanalystacademy.com
For technical or IT related support, please contact support@creditanalystacademy.com
You can also visit our Resources Page for additional guidance and information.
Learning Objectives
By the end of this module, you will be able to:
Understand the Purpose of Financial Ratios
Understand how financial ratios are used to assess profitability, liquidity, leverage, efficiency and debt servicing capacity.
Recognise how ratios help identify trends, strengths, weaknesses and potential credit risks.
Understand that ratios are indicators that should be interpreted alongside broader financial and qualitative information.
Accurately Calculate Key Ratios
Apply standardised formulas to calculate key financial ratios using financial statement information.
Calculate measures relating to profitability, liquidity, leverage, efficiency and debt servicing.
Apply ratio calculations accurately and consistently to support reliable financial analysis.
Interpret and Compare Ratio Results
Analyse ratio trends over time to identify improving or deteriorating financial performance.
Compare results with historical performance, relevant benchmarks and industry context where appropriate.
Identify material movements or inconsistencies that may require further investigation.
Apply Ratio Analysis to Credit Assessment
Use ratio analysis to assess financial performance, repayment capacity and overall credit risk.
Integrate ratio findings with other financial information to form a balanced financial view.
Use ratio insights to support clear and well-reasoned credit recommendations.
Recognise the Limitations of Ratio Analysis
Understand that financial ratios provide useful indicators but do not replace judgement or broader credit analysis.
Consider qualitative information, industry context and the underlying drivers of financial performance when interpreting ratio results.
Recognise how accounting treatments, seasonality, unusual transactions or one-off events may distort ratio results.
