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DataCamp

Analyzing Financial Statements in Python

via DataCamp

Overview

Learn to analyze financial statements using Python. Compute ratios, assess financial health, handle missing values, and present your analysis.

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 you need to start analyzing financial statements in Python to understand a company's financial position in-depth.

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.

'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.

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.

Syllabus

  • The Balance Sheet
    • In 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.
  • 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.
  • 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.
  • 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.

Taught by

Rohan Chatterjee

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