Concept
Horizontal vs. Vertical
Horizontal: same item across periods (trends). Vertical: each item as % of base (common-size). Income statement base = revenue. Balance sheet base = total assets.
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BARLesson 1 of 3
Financial Analysis Techniques
Key Point
DuPont Analysis
ROE = Profit Margin × Asset Turnover × Equity Multiplier. Reveals whether ROE comes from profitability, efficiency, or leverage.
Concept
Ratio Categories
Liquidity (current ratio), Solvency (D/E), Profitability (ROE, margins), Efficiency (turnover), Valuation (P/E, EV/EBITDA).
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