ReadyRatios Software Manual
- — Data Input Process
- — Report Template
- — Enter Company Details
- — Choice of Period to be Analyzed
- — Accounting Data Input
- — Load Data From File
- — Report Settings
Data Input Process
The program ReadyRatios is built around a simple concept, "enter data for analysis – receive an analytical report".
All source data input takes place on the same page – using the "Input tables" button (start entering new data) or the "Back to input..." button (return to already completed forms).
For analysis, the following source data must be entered:
1. choose a template for the type of report you would like to receive;
2. Input the details of the organization you wish to analyze;
3. specify the period to be analyzed ;
4. enter accounting data;
5. enter your settings for the report.Up
The Report template determines the type of report that will be generated by the results of the analysis. There are standard and custom Templates. Standard templates come with the program. User templates (with "*" at the beginning of the name) are created by the user, by editing standard templates.
You can choose a report template either before or after the accounting forms below have been filled – in the case of the latter, all the data entered in the table is saved.
Attention! If you download data from a file or database, then do not forget to change the template to the one you desire afterwards (because information about the previously selected template will be stored together with the data).
The program has the following standard templates:
A complete financial analysis
This is a report that includes all the key indicators of the financial situation of the organization and how well it is performing, which may be calculated by the two basic standard forms of accounting.
Certificate of financial state
This is a Certificate confirming the company’s financial state according to ReadyRatios rating scale. The certificate can be obtained in text or image format. To generate a certificate in graphic form, you must first enable the option "insert images in the report" in the "Report settings" section (see the bottom of the input tables page). Generating the certificate in graphic form is recommended:
Apart from having a beautiful appearance, the certificate has been designed in such a way as to make it difficult to change in any graphic editing programs, thus protecting its authenticity. Security features:
- special design, appropriate to the Securities;
- the background picture shows the company's key accounting data (making it possible to check whether the rating was derived from analysis of the actual accounting and not in any other way);
- ReadyRatios compliance stamp appears on the certificate if the analysis was carried out 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 performance the stamp will be displayed only if the setting "Ignore user customization of formulas (use default formulas) " is enabled.
Warning: To obtain the best quality of print for the certificate, it is important to disable toner save mode in your printer settings!
Enter Company Details
Details of the analyzed company include: the company's name and its principal activity.
The entity name is set in abbreviated form (e.g. Goldstar) and is used automatically in the report.
International Standard Industrial Classification (ISIC) is used in the classification of industries. It was developed by the UN and is used particularly by the EU countries. By default, the analyses in the program are conducted without taking industry specialties into account (i.e. using average normal values). However, the user has the ability to customize the qualitative assessment of indicators for specific sectors.
Choice of Period to be Analyzed
Before you start entering the accounting data, it is important that you specify the period that is going to be analyzed. ReadyRatios allows you to analyze as a single accounting report (e.g. annual, nine months, six months, etc.), or as a report for a series of periods (for example, for three years on a quarterly basis, or for two years in increments of six months, etc.). Choosing the period to be analyzed involves three steps:
1. Specifying the date of the last report.
For example, if we are analyzing reports for the year 20011 - the date of the last report will be 31.12.2011. In other words, this is the date on which the accounting report was compiled (or the latest report, if a report for several periods is to be analyzed).
If the first date of financial (fiscal) year in your country is not 1st January, you can select another month as the begging of your financial year.
2. Choosing a step of analysis.
If we analyze a single financial report, the step of analysis we choose is "single report statement" (accounting reports are always prepared from the beginning of each financial year up to a particular month, quarter or the whole year).
If we are analyzing a report over several periods, the choice of the step of analysis is up to us, depending on the number and frequency of existing accounting reports. For example, a quarterly report for the 2 years 2010 and 2011 is available (i.e. an accounting report for the 1st quarter, half year, 9 months and the year of 2010 and 2011). In this case we would choose "quarter" as the step of analysis.
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: to obtain more reliable ratings of the financial condition, analysis of the enterprise for several periods should be conducted (2-3 years in quarterly increments or six-monthly. or for 4-5 years choosing steps of one year).
Accounting Data Input
Accounting tables - forms 1 (Statement of financial position) and 2 (Statement of comprehensive income, or Income statement) - can be filled in the following ways:
- enter data manually;
- upload the data from a file (this is data previously saved from the ReadyRatios program files with the extension *. vfa)
- import data from an XBRL (IFRS Taxonomy) file;
- 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 components of the program and represent standard accounting forms. Both of these forms must be filled. Note: If you are entering data for several periods it is advisable to enter it in descending order of the periods – i.e. start with data from the latest report, then 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 previous reports:
For some types (templates) of reports there may be additional forms # 1 and 2 available. These forms are essentially the same as corresponding standard accounting forms # 1 and 2, but they are designed for input of data which is absent from the standard forms. Additional do not have to be filled - 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 receive EBITDA indicator. If you do not enter this data, the report will be created without this indicator.
Tables with additional data can be adjusted (enabling you to 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).Up
Load Data From File
If you don't want to enter the data of the accounting forms manually, you can use the buttons at the top of the forms page to download data from a file.
Load from file
Loading data from a file with the extension vfa (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 2011.
If for some reason you are unable to upload all files at once, you can still upload the missing files. In this case, data already available in the tables will be stored (unless you check the Clear tables before upload box).
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:
Sections to be included in the report
You don't have to include all the sections in the report, only those you need. Furthermore, the table of contents can be displayed at the beginning of the report or not (Insert table of contents option).
Ignore user customization of formulas (use default formulas)
If this option is enabled, then the analysis, regardless of the selected report template, will be executed by formulas in the forms originally supplied with the software. Thus, the analysis will be performed by the ReadyRatios method, despite changes made by the user in the formulas for calculating the indicators and their qualitative assessments. This option is useful in two cases:if you've changed the formulas for calculating indicators, or the quality assessments of the indicator values, but 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. But in some cases it may remain silent about the lamentable state of some indicators. This setting does not affect the general conclusions and rating.
The use of color in the derivation of numeric data makes the report more visually dynamic. There are three colors available:
- black - for indicators without quality assessment;
- green - for the values of indicators, which have good or excellent quality assessment, as well as for marking all changes with the "+" sign;
- red - for the values of indicators with unsatisfactory or critical quality evaluation, as well as for marking all changes with the negative sign.
All figures 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. Example: "234,400,580". This comes in handy when creating reports containing large numbers.
Insert images in the report
If this option is enabled, the report will contain graphics with a visual representation of the dynamics of the indicators and diagrams. This option is especially recommended when several periods are being analyzed - the report will appear more informative and visually compelling. This option will also affect your decision as to whether you should build the report Certificate of financial condition in graphic or text format.
You can choose one of three options for the quality of graphs in the report:
- Medium (with this option graphics look good on screen but lose quality in print);
- Good (with this option graphics are suitable for printing);
- Excellent (recommended for high quality printing).
Although graphs of good and excellent quality may appear worse on your screen than medium quality graphics, in print the opposite will be the case. It should also be noted that the higher the quality, the longer it takes to generate a report.
Maximum number of columns
During the analysis of an accounting report for several periods, tables can reach a width of excessive dimensions. For example, when analyzing reports spanning 3 years using the quarterly analysis the table takes up more than 12 columns. When printing tables like this the report will not fit on a standard sheet. To avoid this, ReadyRatios has introduced an adaptive approach to building large tables. For example if, as in the above example, we display a table completely, we get the following result:
Setting Maximum number of columns allows you to specify the number of columns beyond which the table will be "compressed". For example, in the setting the maximum number of columns is limited to four and since the number of columns with index values in our example is 12 (3 years x 4 quarters), the result will appear as follows:
Q2'06 - Q2'08
With "compression" of the table, only the first and last two indicators are present, while the rest are represented by their mean arithmetical value. Using this approach, the width of the table is significantly reduced, thus "dropped" data is displayed in averaged form. In this way the width of the tables is convenient for printing without significantly damaging the clarity of the report.
Font. Font Size
This setting allows you to choose font (Arial or Times New Roman) and the size of font used in the report.
There are following options for opening a report after clicking the "Make analytical report" button:
- Inside of program editor - ReadyRatios includes an editor which allows you to perform simple editing and printing of reports;
- As HTML text - the report is opened in text form. Although this format is not editable, you can simply select it then copy and paste it into any text editor;
- In MS Word (if this program is installed on your computer);
- In PDF format;
- In 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, do the following: Launch Internet Explorer, go to File menu , then "Page Setup" and change the text for headers and footers (it is better to completely remove the header and in the footer keep only "& p" – 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 build 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, then after clicking "Generate analytical report" data from forms will be saved in the Database. In addition, it is possible to save source data into the database at any time by clicking Save to database at the top of the page.