Tips and tricks about financial ratios: how to anticipate unpleasant surprises

Casado Sánchez, José Luis and Ruizazcárate-martínezcañavate, Beatriz and Palacios de Liñán, José María (2014). Tips and tricks about financial ratios: how to anticipate unpleasant surprises. In: "28th International Business Research Conference", 08/09/2014 - 09/09/2014, Barcelona. ISBN 978-1-922069-60-3. pp. 1-8.

Description

Title: Tips and tricks about financial ratios: how to anticipate unpleasant surprises
Author/s:
  • Casado Sánchez, José Luis
  • Ruizazcárate-martínezcañavate, Beatriz
  • Palacios de Liñán, José María
Item Type: Presentation at Congress or Conference (Article)
Event Title: 28th International Business Research Conference
Event Dates: 08/09/2014 - 09/09/2014
Event Location: Barcelona
Title of Book: Proceedings of 28th International Business Research Conference
Date: 2014
ISBN: 978-1-922069-60-3
Subjects:
Faculty: E.T.S.I. de Minas y Energía (UPM)
Department: Sistemas Energéticos [hasta 2014]
Creative Commons Licenses: Recognition - No derivative works - Non commercial

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Abstract

Following recent accounting and ethical scandals within the Telecom Industry like Gowex case, old cards are laid on the table: what kind of management and control are we doing on our businesses and what use do we give to the specific tools we have at our disposition? There are indicators, that on a very specific, concise and accurate manner, aside from brief, allow us to analyze and capture the complexity of a business and also they constitute an important support when making optimal decisions. These instruments or indicators show, a priori, all relevant data from a purely economic perspective, while there also exist, the possibility of including factors that are not of this nature strictly. For instance, there are indicators that take into account the customer?s satisfaction, the corporate reputation among others. Both kind of performance indicators form, together, an integral dashboard while the pure economic side of it could be considered as a basic dashboard. Based on DuPont?s methodology, we will be able to calculate the ROI (Return on Investment) of a company from the disaggregation of very useful and much needed indicators like the ROE (Return on Equity) or the ROA (Return on Assets); thereby, we will be able to get to know, to control and, hence, to optimize the company?s leverage level, its liquidity ratio or its solvency ratio, among others; as well as the yield we will be able to obtain if our decisions and management are optimal related to the bodies of assets. Bear in mind and make the most of the abovementioned management tools and indicators that we have at our disposition, allow us to act knowing our path and taking full responsibility, as well as, to obtain the maximum planned benefits, instead of leaving them to be casual. We will be able to avoid errors that can lead the company to an unfortunate and non-desirable situation and, of course, we will detect, way in advance, the actual needs of the business in terms of accounting and financial sanitation before irreversible situations are reached.

More information

Item ID: 30930
DC Identifier: http://oa.upm.es/30930/
OAI Identifier: oai:oa.upm.es:30930
Deposited by: Memoria Investigacion
Deposited on: 17 Sep 2014 07:55
Last Modified: 22 Sep 2014 11:52
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