Analyzing Financial Statements in Python
Learn to analyze financial statements using Python. Compute ratios, assess financial health, handle missing values, and present your analysis.
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Course Description
Use Python to Analyze Financial Statements
Balance sheets, income statements, and cash flow statements are financial statements nearly every major company uses. These statements contain a plethora of information about a company's financial position. This four-hour course will lay the groundwork to analyze financial statements in Python and understand a company's financial position in-depth.Compute Essential Ratios from Financial Statements
You’ll begin by learning how to read financial statements—the first step in learning how to analyze them. Next, you'll practice computing some of the most common financial ratios from the statements using pandas - a powerful Python data manipulation and analysis tool. You'll also learn how to use different functionalities of pandas to compare the financial ratios of companies and assess their financial health.Learn How to Deal With Real-World Financial Data
'Data in the wild' is riddled with missing values. In this course, you'll practice dealing with missing financial information through interactive exercises. You’ll also learn how to present your analysis using data visualization—another essential skill in financial analysis.Reduce Repetitive Work with User-Defined Functions
One of the great things about using Python for analyzing financial statements compared to standard spreadsheets is that you can reduce repetitive work. By writing your own functions in Python, you’ll learn to make your analysis faster and more efficient by reducing repetition.For Business
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The Balance Sheet
FreeIn this chapter, you will learn how to read and interpret a balance sheet and compute and use financial ratios to evaluate a company's performance using information from the balance sheet. Additionally, you'll gain hands-on experience using the powerful pandas data manipulation package to analyze a company's financial ratios and compare them to its peers in the industry.
Introduction to the balance sheet50 xpMatch balance sheet items to their class100 xpRelation of assets, liabilities, and shareholders' equity100 xpPractice using the main equation of accounting100 xpFinancial ratios from the balance sheet50 xpMatch the ratio to its family100 xpCompute the current ratio100 xpLeverage ratios100 xpComputing financial ratios using pandas50 xpCompute current and debt-to-equity ratios100 xpCompute relative difference by industry100 xpCompute ratios by industry100 xp - 2
The Income Statement
In this chapter, you'll learn how to read and interpret an income statement, calculate key financial ratios, and even create your own functions in Python to automate repetitive tasks. You'll also gain experience using seaborn, a powerful data visualization library, to produce figures to help you understand a company's financial performance.
Introduction to the income statement50 xpCompute net income100 xpComputing ratios from the income statement100 xpRatios from the income statement and balance sheet50 xpUpdating the user-defined function100 xpUpdating user-defined function to do subtraction50 xpComputing ratios with user-defined function100 xpComputing multiple ratios with the user-defined function100 xpVisualizing ratios for within-company analysis50 xpPlotting ratios100 xpPlotting ratios in one figure100 xp - 3
The Cash Flow Statement
In this chapter, you’ll analyze the cash flow statement and use its information to compute and interpret financial ratios. Using Seaborn to create informative plots that compare financial ratios across different companies, you'll build on your existing knowledge of Python and data visualization. By the end of this chapter, you'll have the skills to extract insights from cash flow statements using Python and handle messy, real-world data sets with missing data.
Cash flow statement50 xpAssign cash flow entries to the correct part100 xpCompute net cash flow100 xpFinancial ratios from the cash flow statement50 xpMerging financial statements100 xpCompute cash flow statement ratios100 xpImputing and filling in missing values using averages100 xpImputing missing values with percentiles100 xpMerging financial statements and filling missing values100 xpVisualizing financial ratios for comparison50 xpPlotting cash flow ratios100 xp - 4
Profitability metrics
In this chapter, you'll learn about the different financial ratios that measure a company's profitability, how to compute them, and how to compare them across other companies. You'll build upon your knowledge of the Seaborn library to create visualizations that help you analyze profitability ratios and identify trends.
A glimpse into the financial ratios of some industries50 xpUsing margins in pivot tables and making a bar plot100 xpPreparing data for a facet grid plot100 xpMaking a facet grid plot100 xpUser-defined function to make plots100 xpProfitability metrics50 xpRelationship between operating margin and debt-to-equity for real estate companies100 xpPractice with sns.regplot()100 xpUpdating the user-defined function for plotting100 xpMore on analyzing profitability50 xpPractice making heat maps100 xpBroad analysis100 xpWell done!50 xp
Collaborators
Prerequisites
Data Manipulation with pandasRohan Chatterjee
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Risk Modeler
Rohan is a risk modeler at Rabobank in the Netherlands. He has a passion for teaching and has taught as a student assistant at Tilburg University for almost three years. He is very interested in finance and likes to stay updated with the latest developments in the financial world! In his free time, he likes to play the guitar, go to the gym and spend time with his friends and family.
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