FSA-Ratios

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brokeryates

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Did anybody else have as difficult time as I did getting through this stuff? I thought it was pretty painful.
 
What I tell you can be maybe more painful, but it is just an idea...if FSA ratios seem to be that hard, maybe it is good idea to go back to basics: revisit once more income statement, balance sheet, casf flows statement...at more relaxed pace, and then these ratios will be easy and lovely ;)
 
if an person cant interpret ratios tht is analyse Balance sheet and Income statement he shuld quit pursuing CFA then and there (wats the use of wasting money and time??)
 
It's overwhelming at first... but be patient and focused and you'll get trough it. Ratios aren't meant to be understood after a first glance.

Go back to statement definitions and see rationale behind the ratios
 
I disagree with archer_from_jupiter.
Anyone can learn anything, as long as he is interested doing it.

As Da_Real stated, ratios are very difficult to digest at a first glance. But I'm pretty much sure if you try to link balance sheet items and income statement items and also try to understand them all, then it would be much easier for you to grasp the formulae.
 
It's not about just memorizing ratios, know how to interpret them, know the relationships, how the increase in one effects the other, as well as effects on income areas on the balnce sheet. Several ROE questions and interpretation on level 1 exam in June.
 
I think the names of the ratios make them much easier, when compared to debt, derivative, or quantitative formulas. With practice they will become more familiar. Remember as a financial analyst, you must be extremely familiar with balance sheets, income statements and statements of cash flows.
 
"if an person cant interpret ratios tht is analyse Balance sheet and Income statement he shuld quit pursuing CFA then and there (wats the use of wasting money and time??)"

I was not referring to the difficulty in "understanding" the ratios....I was commenting on how absolutely boring the section was. Anything boring is hard to sift through. Not that the rest of the FSA isn't boring, I just thought this section was worse than the others.
 
Income taxes are not too difficult if you can get around the concept, but the concept can seem rather convoluted, based upon the different perspectives involved.

My advice know ratios cold, they are absolutely important. Don't stress over them. Review them gradually. After my initial read, when I was reviewing, I would look over them for a few minutes everyday and recite them from a list. It really doesn't take much to memorize them.
 
storko Wrote:
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> The worst part of FSA is income tax analysis


Wait til you get to Pension Benefits. HAHAHA!
 
You know what I've been reading.....Graham and Dodd's Security Analysis....I bought it for about $20 used around three years ago. When I first got it I remember completely skipping the entire Financial Statement section, which of course is a pretty big section in the book. I would recommend picking it up if you haven't read it (try to get it used like I did). It helps to get some supplemental background from a different source and it's a relatively quick read once you have some knowledge from studying for the CFA. Not something to read cover to cover, but the Financial Statement info helps to fill in some of the gaps in the "standard" CFA materials
 
koz Wrote:
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> storko Wrote:
> --------------------------------------------------
> -----
> > The worst part of FSA is income tax analysis
>
>
> Wait til you get to Pension Benefits. HAHAHA!


Ya, just finsihed reading it for level 2. Both income tax analysis and PBO, ABO and Pension Expense determination are a bit hairy on first read.
 
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