COMPONENTS OF FINANCIAL STATEMENT ANALYSIS
- Role of financial reporting and analysis
- Core financial statements and the importance of the annual report
- The important role of notes and supplementary information
- Objectives of financial statements audit
- Types of audits
- Financial statement analysis framework
- The accounting cycle
- Financial reporting mechanics
- Relationship, elements and classification of financial statements
FINANCIAL ACCOUNTING & REPORTING STANDARDS
- Importance of reporting standards in equity analysis and valuation
- International Financial Reporting Standards (IFRS) versus Generally Accepted Accounting Principles (GAAP)
- Rules comparisons affecting analysis
APPLICATIONS & PRESENTATIONS OF FINANCIAL STATEMENT ANALYSIS
- Evaluating a company’s past performance
- Comprehensive real life analysis of publicly traded companies
- Comparing and contrasting different industries
FINANCIAL MARKETS
- Gross margin vs. operating profit vs. net income
- Revenues are earned and expenses are incurred
- Balance sheet elements
- The main six (6) parts of the balance sheet
- Definitions and examples
- Statement of changes in owners’ equity
- Cash flow statement:
- Operating, investing, and financing activities
- Two (2) methods of preparing cash flow statement
- Reading and interpreting cash flow
- The cash rich standard
FINANCIAL ANALYSIS TECHNIQUES
- Strategic analysis is vertical analysis: balance sheet and income statement approaches
- Growth analysis is horizontal and trend analysis
- Importance of Liquidity analysis
- Current, quick, and cash ratios, defensive interval and cash conversion cycle
- Why perform asset management and activity ratios?
- Total and fixed assets turnover
- Gearing and Solvency analysis
- Debt, equity, and times interest earned ratios
- Business and Profitability analysis
- Profit margin, gross margin, return on assets, return on equity
- How good are Market ratios?
- Price earnings and earnings-per-share ratios
- DuPont analysis: the three-step and five-step models
- Limitation of ratio analysis
