Journal Title

Advances in Financial Education

Publication Date

2014

Abstract

Financial ratio analysis is a topic covered in most business courses in accounting and finance, but the traditional methodology used suffers from what can be termed the "cookbook approach." Students are typically assigned simple exercises at the end of chapters which involve the computation of ratios measuring liquidity, leverage, turnover, and profitability. Students are then asked to compare the calculated ratios to a given industry average. These are merely sterile exercises which fail to expose students to the application of financial analysis in real world scenarios. A more effective curriculum would incorporate a complete analysis of actual firms, using sophisticated techniques which have been proven to be more effective in assessing financial strength.

Subjects

Business education; Business students; Ratio analysis

Publication Information

Advances in Financial Education, 2014, Volume 6, 1-15.

© 2014 Advances in Financial Education

Archived version is the final published version.

Peer-Reviewed

No

Document Type

Journal Article

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