ReadyRatios Software Manual
- — Data Input Process
- — Report Template
- — Enter Company Details
- — Selecting the Period to Analyze
- — Accounting Data Input
- — Load Data From File
- — Report Settings
Data Input Process
The ReadyRatios software is based on the simple concept of "enter data for analysis - get an analysis report".
All input of source data is done on the same page - using the "Input tables" button (to start inputting new data) or the "Back to input..." button (to return to already completed forms).
The following source data must be entered for the analysis
1. Select a template for the type of report you want to receive;
2. Enter the details of the organization you wish to analyze;
3. Specify the time period to be analyzed;
4. enter accounting information;
5. Enter your preferences for the reportUp
The Report Template determines the type of report that will be generated from the results of the analysis. There are standard and user-defined templates. Standard templates are provided with the program. User templates (with "*" at the beginning of the name) are created by the user by editing standard templates.
You can select a report template either before or after filling in the accounting forms below - in the latter case all the data entered in the table will be saved.
Warning! If you download data from a file or a database, do not forget to change the template to the desired one afterwards (because information about the previously selected template is saved together with the data).
The program comes with the following standard templates:
A complete financial analysis
This is a report that includes all the key indicators of the organization's financial situation and performance that can be calculated using the two basic standard forms of accounting.
Certificate of financial state
This is a certificate confirming the financial situation of the company according to the ReadyRatios rating scale. The certificate can be created in text or graphic format. In order to generate a certificate in graphic form, you should first enable the "Include images in the report" option in the "Report settings" section (see the bottom of the "Input tables" page). It is recommended to generate the certificate in graphical form:
In addition to its beautiful appearance, the certificate is designed to be difficult to alter in any graphic editing program, thus protecting its authenticity. Security features:
- Special design appropriate for securities;
- The background image shows the key accounting data of the company (which allows to verify that the rating is derived from the analysis of the actual accounting data and not from any other way);
- The ReadyRatios compliance stamp appears on the certificate if the analysis was performed using formulas in the same form in which they were originally entered into the program. If you change the formulas or the qualitative assessment of the performance, the stamp will be displayed only if the setting "Ignore user customization of formulas (use default formulas)" is enabled.
Warning: In order to obtain the best printing quality for the certificate, it is important to disable the toner save mode in your printer settings!
Enter Company Details
Details of the analyzed company include: the company name and its main activity.
The entity name is set in abbreviated form (e.g. Goldstar) and is automatically used in the report.
The International Standard Industrial Classification (ISIC) is used to classify industries. It was developed by the UN and is used mainly by EU countries. By default, the analyses in the program are carried out without taking into account the peculiarities of the industry (i.e. using average normal values). However, the user has the possibility to adjust the qualitative assessment of indicators for specific sectors.
Selecting the Period to Analyze
Before you start entering the accounting data, it is important to define the period to be analyzed. ReadyRatios allows you to analyze as a single accounting report (e.g. annual, nine-month, six-month, etc.) or as a report for a series of periods (e.g. three years on a quarterly basis, or two years in six-month increments, etc.). Selecting the period to analyze involves three steps:
1. Specify the date of the last report.
For example, if we analyze reports for the year 2011 - the date of the last report will be 31.12.2011. In other words, this is the date when the accounting report was created (or the last report, if you want to analyze a report for several periods).
If the first day of the fiscal year in your country is not January 1, you can choose another month as the beginning of your fiscal year.
2. Selection of an analysis step.
If we are analyzing a single financial report, the analysis step we choose is "single report statement" (accounting reports are always prepared from the beginning of each financial year to a certain month, quarter or the whole year).
If we analyze a report over several periods, the choice of the level of analysis is up to us, depending on the number and frequency of existing accounting reports. For example, there is a quarterly report for the 2 years 2010 and 2011 (i.e. an accounting report for the 1st quarter, 6 months, 9 months and the year 2010 and 2011). In this case, we would choose "Quarter" as the analysis step.
3. Then, using the arrows to change the period to be analyzed (in this case, by using the green arrow on the far left), we can "extend" the period up to the required number of quarters.
Using the arrow keys, we can both expand and narrow the limits of the period to be analyzed.
Note: in order to obtain a more reliable assessment of the financial situation, it is advisable to analyze the company for several periods (2-3 years in quarterly or semi-annual steps, or 4-5 years in annual steps).
Accounting Data Input
Accounting tables - forms 1 ('Statement of Financial Position') and 2 ('Statement of Comprehensive Income' or 'Income Statement') - can be completed in the following ways
- Enter the data manually;
- Uploading data from a file (i.e. data previously saved from the ReadyRatios program files with the *. vfa extension)
- Import data from an XBRL file (IFRS or US GAAP Taxonomy);
- load previously saved data from the "Database" (see chapter "Database").
The program has 4 tables for the input of the original accounting data:
- Form # 1 "Statement of financial position" (Balance sheet)
- Form # 2 "Statement of comprehensive income" (Income statement , or Profit & Loss statement)
- Additional data "on the date" (additional data - table 1)
- Additional data "for the period" (additional data - table 2)
The first two tables are essential parts of the program and represent standard accounting forms. Both forms must be filled in. Note: If you are entering data for several periods, it is advisable to enter them in descending order of periods - i.e. start with data from the most recent report, then from the previous one, and so on. This is useful because in Form #2 Statement of Comprehensive Income, all figures for the last period of the later reports are automatically transferred to the earlier reports:
For some types (templates) of reports, additional forms #1 and #2 may be available. These forms are essentially the same as the corresponding standard accounting forms #1 and #2, but they are designed for the input of data that is missing in the standard forms. Additional forms do not have to be filled in - if you do not have the data specified in these forms, the fields can be left blank.
For example, for the reports Complete financial analysis, in the table Additional data – table 2 is available and contains the indicator Depreciation and amortisation expense. If you enter this data, you will get the EBITDA indicator. If you do not enter this data, the report is generated without this indicator.
Tables with additional data can be customized (so you can add your own figures to a report) - see "Settings - Input tables customization".
For your convenience, when working with data entry forms, you can temporarily hide the columns (the four arrows icon), or clear their contents (the pencil with a minus sign icon).
Entering data as a cumulative total
Data is entered into Form #2 "Statement of Comprehensive Income" (Profit and Loss) in the same way as it is required by accounting rules - as a running total (cumulative total) from the beginning of each fiscal year. However, if for some reason your data is not cumulative, but for individual quarters or months, uncheck the "Input as cumulative total" option before the "Statement of Comprehensive Income" table.Up
Load Data From File
If you don't want to enter the accounting form data manually, you can use the buttons at the top of the forms page to download the data from a file.
Load from file
Load data from a file with a vfa extension (ReadyRatios data storage format) or XBRL data import. IFRS or US GAAP financial statements can be downloaded from the xml file in the format IFRS (US GAAP) Taxonomy.
If for some reason you are unable to upload all the files at once, you can still upload the missing files. In this case, the data that already exists in the tables will be saved (unless you check the Clear tables before upload box).
The 'Upload and consolidate' button allows you to upload statements and summarize data row by row.
After entering the accounting data, the last step before starting the analysis is to set the parameters of the report. The program has the following settings:
Contents (sections to include in the report)
You don't have to include all sections in the report, just the ones you need. You can also choose whether or not to display the table of contents at the beginning of the report (Insert table of contents option).
Ignore user customization of formulas (use default formulas)
If this option is enabled, regardless of the selected report template, the analysis will be performed using the formulas in the forms originally distributed with the software. In this way, the analysis will be carried out according to the ReadyRatios method, even if the user modifies the formulas used to calculate the indicators and their qualitative evaluations. This option is useful in two cases:
- when you've changed the formulas for calculating the indicators or the quality ratings of the indicator values, but you want to generate a report using the original formulas;
- for obtaining a certificate with the ReadyRatios stamp (see template Certificate of financial condition).
This setting allows you to reduce the level of criticism in the report. This does not mean that the report will contain inaccurate data or conclusions. However, in some cases, the report may be silent about the deplorable state of some indicators. This setting does not affect the overall conclusions and rating.
The use of color in the derivation of numerical data makes the report more visually dynamic. Three colors are available:
- black - for indicators without quality assessment;
- green - for the values of indicators with a good or excellent quality assessment, as well as for marking all changes with the "+" sign;
- red - for the values of indicators with an unsatisfactory or critical quality assessment, as well as for marking all changes with the "-" sign.
All numbers in the report can be made bold.
Use thousands separator
To improve the readability of numbers, you can enable the option to separate groups of digits into 3 digits with a space. For example: "234,400,580". This is useful when creating reports that contain large numbers.
Include images in the report
If this option is enabled, the report will contain graphics with visual representation of the dynamics of indicators and charts. This option is especially recommended when analyzing several periods - it makes the report more informative and visually appealing. This option will also influence your decision whether to create the report in graphical or text format.
You can select one of three options for the quality of the graphs in the report:
- Medium (with this option, graphs look good on screen, but lose quality when printed);
- Good (graphics are suitable for printing);
- Excellent (recommended for high-quality printing).
Although good and excellent quality graphs may look worse on your screen than medium quality graphs, the opposite is true when printing. Also note that the higher the quality, the longer it takes to generate a report.
Maximum number of columns
When analyzing an accounting report for several periods, tables can reach excessive widths. For example, when analyzing reports for 3 years using the quarterly analysis, the table takes up more than 12 columns. When printing such tables, the report will not fit on a standard page. To avoid this, ReadyRatios has introduced an adaptive approach to building large tables. For example, if we display a table in its entirety, as in the example above, we get the following result:
The maximum number of columns setting allows you to specify the number of columns beyond which the table will be "compressed". For example, if the maximum number of columns is set to 4, and the number of columns with index values in our example is 12 (3 years x 4 quarters), the result will look like this:
Q2'06 - Q2'08
When the table is "compressed", only the first and last two indicators are present, while the rest are represented by their average arithmetic value. With this approach, the width of the table is significantly reduced, so that "dropped" data are displayed in averaged form. In this way, the width of the tables is convenient for printing without significantly affecting the clarity of the report.
Font, Font Size
This setting allows you to select the font (Arial or Times New Roman) and the font size used in the report.
There are following options for opening a report after clicking the "Make analytical report" button:
- Within the program editor - ReadyRatios includes an editor that allows you to easily edit and print reports;
- As HTML text - the report will be opened in text format. Although this format is not editable, you can simply select it and then copy and paste it into any text editor;
- MS Word (if this program is installed on your computer);
- In PDF format;
- OpenOffice format.
Additionally, you can open a report in the current program window or in a new window.
Attention! When you print from the program editor, as when you print standard web pages, Internet Explorer adds headers and footers to the page. To remove these and leave only the page numbers, follow these steps Start Internet Explorer, go to the "File" menu, then to "Page Setup" and change the text for the headers and footers (it is better to remove the header completely and leave only "& p" in the footer - i.e. only the page numbers at the bottom). If you're using a browser other than Internet Explorer to access the program, the problem can be solved in a similar way.
U.S. language style
Use this option to create your report in American English format. It includes date format MM/DD/YYYY (instead of DD.MM.YYYY) and U.S. language (for example, analyze instead of analyse).
Save statements to the database before analysis start
If this option is enabled, data from forms will be saved to the database after the "Generate Analytical Report" button is clicked. It is also possible to save source data to the database at any time by clicking Save to Database at the top of the page.