Course description - This course is designed to help Strategic Sourcing and Supply Management professionals understand and apply concepts of supplier financial ratio analysis.

ISM-ADR School of Supply Management credit of Continuing Education Hours – 2 hours.
This course should take approximately 120 minutes to complete.

Intended audience - Supply Management professionals seeking a better understanding of how ratio analysis is used in supplier financial analysis.

Learning objectives - After completing this module, you will be able to:

• Explain financial statement basics
• Describe how to use financial ratios
• List relevant financial ratios
• Demonstrate how to calculate key financial ratios and explain the meaning of each

Course outline:

• Financial statement basics
• Defining supplier financial analysis
• Planning and performing a supplier financial analysis

• Using financial ratios
• Relevant financial ratios

• Key financial ratios – Descriptions, calculations and meaning
• Efficiency ratios
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• Inventory turnover ratios
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• Days receivable ratios
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• Days payable ratio
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• Now it’s your turn – exercise
• Liquidity ratios
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• Current ratio
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• Quick ratio
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• Interest coverage ratio
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• Now it’s your turn – exercise
• Profitability ratios
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• Gross profit margin percentage
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• Operating profit margin percentage
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• Net profit margin percentage
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• Return on equity
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• Now it’s your turn - exercise
• Leverage ratios
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• Debt-to-equity ratio
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• Now it’s your turn – exercise
• Cash flow analysis
• Red flags to watch for

• 20 Question Quiz