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Rule of 72

Now here's a simple finance trick you can use in your everyday lives.

The rule of 72 is a method of calculating how long it takes for your investment to double given a fixed interest rate.

Calculating it is easy. You just divide 72 by the interest rate and the answer is an approximate number of years it will take to double your money.

Eg. You invest in a treasury bill that gives you 20% yearly assuming the rate will be fixed forever. It will take ~3.6 (72/20) years to double your initial investment.

See, I told you it was easy.

FINANCIAL ANALYSIS
Financial analysis is the evaluation and interpretation of financial and related non financial data to assist in making investment and financial decisions. Within a firm, financial analysis enables managers to evaluate performance. Externally, financial analysis is used to evaluate potential investments and creditworthiness of borrowers.
The data for financial analysis comes from many sources:

1. Annual reports (Income statement, balance sheet, statement of cash flows and notes to financial statements)

2. Outside information such as market prices of the shares of companies traded on the stock exchange.

3. Economic data such as GDP, Inflation and Interest rates.

4. Events which may have a bearing on the future prospects of a firm. For example, if the company is introducing a new product or if the firm incurred some extraordinary losses.