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Financial Statement Analysis

Financial Statement Analysis is the process of reviewing and analyzing a company's financial statements to make better economic decisions to earn income in future. These statements include the income statement, balance sheet, statement of cash flows, notes to accounts and a statement of changes in equity, if applicable. Financial statement analysis is a method or process involving specific techniques for evaluating risks, performance, financial health, and future prospects of an organization.
In today’s world, finance professionals are challenged with providing management a detailed analysis of the impact of the organization's financial decisions. Therefore, finance professionals need to be skilled at reading through the numbers on the financial statements, analyzing the figures, interpreting the various ratios and presenting this analysis in a dynamic manner. This training takes you from the first step of understanding the relationships between the different elements of financial statements, through calculating and analyzing the financial ratios to the last step of presenting recommendations.

Learning Objectives
Upon completion of the course, participants will be able to:

• Demonstrate skills in calculating financial ratios & using financial analysis techniques
• Analyze & interpret financial statements effectively
• Use FS to evaluate a firm’s business operations and to predict its future condition

Program Outline

  1. Required 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 cycles
    • Financial reporting mechanics
    • Relationship, elements and classification of financial statements
  2. Financial Reporting Standards
    • Importance of reporting standards in security analysis and valuation
    • The standards setting bodies
    • International Financial Reporting Standards (IFRS) versus Generally Accepted Accounting Principles (GAAP)
  3. An Inside look at Financial Statements
    • Income statement components
    • The three important components of income statements
    • Revenue and expense recognition
    • Balance sheet components
    • Measurement and classification
    • Cash flow statement
  4. Cash Flow Analysis: Interpreting the Cash Flow Statement
  5. Financial Accounting: GAAP and Asset Recognition
  6. Financial Accounting: GAAP, Liabilities and Stockholder’s Equity