Analysing Financial Performance Using Integrated Ratio Analysis

Despite a plethora of techniques to analyse the financial performance of a business, there has been no single methodology that has been overwhelmingly preferred by users. This could be an indication that either the methods themselves are deficient or they are limited by other factors that are not easily overcome. Unlike the current offerings in the field, which focus on issues relating to business performance management or non-financial aspects (such as market efficiency, satisfaction and workforce productivity), this book offers a solution to a major gap in the literature and understanding for those seeking to measure, analyse and benchmark the financial performance of any organisation (for-profit, not-for-profit and government agencies). It clearly identifies why current techniques fail; proposes and evidences a solution that overcomes these issues by including two algorithms that can be combined, to solve this problem; and demonstrates the practical application of the technique to the benefit of users in order to pinpoint real performance levels and insights. One of the largest issues this book will help to overcome is the inability to compare the accounts of businesses/organisations from different countries that report in different currencies. This technique eliminates the need for currency translations and the issues that arise with that process. This book is an invaluable and practical guide to assist accounting and finance practitioners in measuring and comparing financial performance across firms with different business models, different accounting policies and different scales of operations.

List of figures List of tables Acknowledgements 1 Background and overview 2 Issues with currency and related financial performance measurement techniques 3 Issues with percentages, ratios and other attempts at absolute measurement scales 4 The proportional asset ratio (PAR) as a solution 5 The anchored ratio 6 Integrated ratio analysis 7 Summary and conclusion Index

Nic La Rosa, PhD (La Trobe University), CA, CPA is able to draw on over 30 years of industry experience managing complex organisational budgets and leading strategic planning, performance analysis and change management. Commencing his career with KPMG, Nic moved into a career of various executive financial and management roles across the tertiary, private and not-for-profit sectors. This includes roles as Chief Financial Officer (CFO), Manager Financial Performance Analysis, Business Analyst, Financial Accounting and Manager of Finance and Resources. With a PhD in economics and full accreditation and membership with Chartered Accountants of Australia and New Zealand (CAANZ) and CPA Australia, he has presented on his research at conferences and symposiums in Australia and the United States.