How to Calculate Profitability

Posted on February 1, 2012 by spireframe

We just completed a series of articles about how to calculate profitability.  We explain what profitability is, why it is important, and how to measure company profitability.  We then go through an example using two companies, the data is from two competing companies and is actual data, but the names of the companies are changed.

We finalize the series by reviewing the Borders Group Inc, a bookseller that competed with Barnes and Noble and Amazon.com before going bankrupt in early 2011.

  1. How to Measure Profitability, Part 1 – An explanation of profitability.
  2. How to Measure Profitability, Part 2 – Defining profitability ratios.
  3. (coming soon) How to Measure Profitability, Part 3 – comparing profitability of two companies.
  4. How to Measure Profitability, Part 4 – Border Group Inc profitability just before bankruptcy.
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Financial Glossary and Calculators Updated

Posted on January 30, 2012 by spireframe

We just finished updating our financial glossaryAn updated version of our Financial Glossary and Calculator sections of our website. Check it out!and financial ratio calculators sections of our website.  We added an alphabet button box to the financial terms section, so you can easily see all financial terms that start with the letter S.  Each term is now tagged, so you can see all financial terms used on the income statement, for example.

These changes should help navigate though the dozens of terms, definitions, and calculators we have added, plus the many more to come.  We have many more useful changes and additions coming very soon, and will post the news here!

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Measuring Liquidity

Posted on January 16, 2011 by spireframe

We just posted part one of a series of three articles about measuring liquidity. In this first part, we explain what liquidity is and why it is important. Part two will follow shortly, discussing and explaining the various financial ratios used in liquidity analysis, followed by part three where we go through a brief example using actual company data and the liquidity ratios we discussed to arrive at a conclusion.

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New Online Financial Ratio Calculators

Posted on December 7, 2010 by spireframe

The TI-85 scientific graphing calculator

The Texas Instruments TI-85 graphing calculator.

In its day (mid-1990′s), the TI-85 was the premier graphing calculator.  It was too large to fit in your pocket, surprisingly heavy, and came in any color you like, as long it was black. Fortunately, its calculator features made up for what it lacked in aesthetics.

Those days are long gone, and we hopefully have made things a little easier by posting our new ratio calculators section on our website.  We had financial ratio explanations and financial statement terms on our website for quite some time, but thought it would help to also have small calculator examples to see the ratios in action.  These are all of the ratios Value Investor Professional uses, and it’s meant to be a quick and easy way to learn about individual financial ratios, plus try a few out by entering sample data and getting comfortable with the results. We also explain the results of each ratio, detailing how to interpret positive and negative results.

A ratio calculator example: Net Worth per Share

Sample online financial ratio calculator

We already have quite a few people checking out the calculators section.  Here are the top 5 most-visited financial calculators:

  1. Financial leverage index
  2. Earnings Per Share
  3. Fixed Asset Turnover
  4. Cash Flow Margin
  5. Times Interest Earned

Or just view them all

Let us know if you find the ratio calculators useful, and how we can improve them.
Calculator photo used under Creative Commons by Sandman
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Value Investor 2.1 Released

Posted on August 25, 2010 by spireframe

We released Value Investor Professional version 2.1.0 today, which incorporates several enhancements and fixes:

  • A new company contact edit screen.
  • Custom financial statement naming.
  • Custom financial value naming.
  • 64-bit Windows installer fix.

New Company Contact Edit Screen:
Editing a company address in Value Investor Professional

Custom Financial Statement Naming:

We had many requests from users that want to change the names of the financial statements, as names like Income Statement, Balance Sheet, and Cash Flow Statement are not used all over the world.  So, we created a couple screens that display the current financial statement settings, plus an edit screen to change the name and the description of the statement.

The Edit Financial Statement Settings screen in Value Investor Professional

Notice on the edit screen, there is an option to reset the financial statement name if needed.

Custom Financial Value Naming:

We also thought this was a good time to enable custom financial value names.  Similar to changing names of financial statements, you can now see a list of all financial names. Clicking on one and pressing the Edit button (shown below) will open an edit screen where you can change the name, description, and assign a financial statement.

Edit Financial Values Settings screen in Value Investor Professional

64-bit Windows Installer Fix

We fixed an issue with our installation package where some users reported they could not install Value Investor Professional.  This turned out to be an issue with the installer itself (the software packaging that automatically installs the various components of Value Investor Professional).  We quickly duplicated the issue and tested a fix.  The installer is now running smooth on Windows XP, Vista, and 7 64-bit machines.   We simplified the installation package as well, while making sure that future versions install over old versions seamlessly.

Go ahead and try Value Investor Professional.  It’s free to use for 2 weeks after you install it.  If you have questions or would like to see more changes, contact us.

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