In the previous two courses, you have learned how to value startups using the discounted cash flow method and multiple methods. However, you have not learned how to estimate cash flows or earnings of startups. In this course, you are going to learn the concepts and usage of financial ratios. Using financial ratios such as profitability, liquidity, leverage, efficiency, and growth, you can tell financial health of a startup. Profitability ratios measure how profitable a firm is by looking at ROS, ROA, and ROE. Liquidity ratios measure how quickly a firm turns assets into cash to pay-off short-term liability and they include Current Ratio, Quick Ratio, and Cash Ratio. Leverage ratios measure how much long-term debt a firm has relative to its assets or equity. Efficiency ratios measure how efficiently a firm utilizes its assets. It is like a physical exam for humans and you can tell the fiscal status of a startup using financial ratios. You can also develop pro forma financial statement using financial ratios. Using pro forma financial statement, you can tell future financial status of a startup as well as cash flows. In addition, using information from pro forma statement and valuation methods, you can do the valuation of a startup.
About this Course
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TOP REVIEWS FROM FINANCIAL ANALYSIS FOR STARTUPS
Really good course for those who are just a beginner to understand the concept of financial analysis and also for those who wants recall the topics for continues improvement.
Very interesting course. I enjoyed answering the quizzes. You'll be able to learn a lot especially with financial ratios and their application.
About the Valuation and Financial Analysis For Startups Specialization
The Startup Valuation and Financial Analysis Specialization teaches two of the most often used methods to find the value of a startup. You’ll learn how to find the value of founder’s ownership before and after additional funding, how to read financial statements and make pro-forma statements, and how to determine the financial health and status of a startup and estimate future earnings and value. You’ll then use various investment criteria, such as Net Present Value (NPV) and Individual Rate of Return (IRR), to make a decision about whether and where to invest your money.
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