Contents
List of Figures and Tables v
Foreword vii
Acknowledgements viii
About the Author ix
Introduction: The place of financial ratios in
business success xi
PART ONE The Role of Financial Ratios 1
1 Creating value – a model of success 3
2 Measuring value – the origin of financial
ratios 17
PART TWO Understanding Financial Ratios 33
3 Funding management – the gearing
ratio 35
4 Asset management – the asset
turnover ratio 45
5 Value add management – the profit margin 61
6 Tax management – the effective
tax rate 77
7 Growth management – the payout
and retention ratios 87
PART THREE Using Financial Ratios 99
8 The composite ratios 101
9 The place of financial ratios in strategic
management 115
10 Perspectives on financial ratios 131