Course description
Overview
It is not possible to analyse the performance and position of a company without first understanding where the numbers in the financial statements come from. Hence the trajectory of this course through the accounting rules before the financial analysis. The course uses practical Excel exercises to provide a thorough grounding in all key areas of accounting and financial analysis theory.
This three-day course is for non-accountants who need to read, understand, interpret and analyse the financial statements of companies. It starts with the basic mechanics of a set of financial statements, continues with the key accounting treatments for important events and transactions before finishing with a thorough financial analysis of the performance and position of the company using a wide variety of metrics, ratios and key performance indicators.
Who is this for?
Professionals (non-accountants) who need to read, understand and analyse the financial statements of companies. It is suitable for recruits to financial services, particularly within banking, broking, equity sales and research, corporate finance, business valuation, and fund management. Lawyers and insurance underwriters would also find this course valuable.
What will you learn?
- Accounting fundamentals
- Cash flow statement basics
- Income statement basics
- Balance sheet basics
- Links and integrations between the statements
- Dual effect of transactions
- Retained earnings
- Practical financial statement construction exercise
- Cash flow revisited (reconciliation from profit to cash flow)
- Revenue recognition
- Top of the income statement
- Cash flow vs earnings
- Accounting for current assets and liabilities
- Current assets and liabilities
- Inventory/stock
- Receivables/debtors
- Payables/creditors
- Non-current assets
- Property, plant and equipment
- Depreciation
- Revaluations
- Impairment
- Intangible assets
- Purchased intangibles
- Research and development
- Internally generated intangibles
- Goodwill
- Basic acquisition accounting for subsidiaries
- Financing
- Debt
- Effective interest rate accounting
- Provisions
- Profit shifting
- Contingent liabilities
- The financial analysis framework
- Profitability
- Efficiency
- Liquidity
- Solvency
- Profitability
- Growth
- Margins
- EPS
- Efficiency
- Working capital days
- Cash cycle
- Short term financing
- Liquidity
- Current Ratio
- Quick Ratio
- Interest cover
- Other ratios
- Solvency
- Gearing
- Leverage
- Other ratios
- Return ratios
- Assets
- Equity
- Capital employed
How will this help your career?
You will gain a thorough insight into the meaning of the financial statements of corporates through a critical analysis.
The starting point is an overview of basic accounting concepts and techniques, and the mechanics of the integration of the financial statements. Your analysis will build on these accounting basics. Microsoft Excel is used to analyse the financial statements of real companies, although an in-depth knowledge of Excel is not required.
Related courses
Introduction to Excel
Data Analysis with Excel - Intermediate
Data Analysis with Excel - Advanced
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Upcoming start dates
Suitability - Who should attend?
This course will be of benefit to those who need to read, understand and analyse financial statements of corporates on a regular basis. New or recent recruits to the financial services industry, particularly within banking, stock broking, equity sales and research, corporate finance, business valuation and fund management, will find the knowledge acquired invaluable.
Outcome / Qualification etc.
Learning outcomes include obtaining a greater understanding of:
- Accounting fundamentals
- Brief recap on the primary financial statements and fundamental accounting concepts
- Accounting equation
- Regulation
- Format of published financial statements and contents of published annual reports
- Basic financial statement mechanics
- Revenue recognition
- Top of the income statement
- Cash flow vs earnings
- Accounting for current assets and liabilities
- Current assets and liabilities
- Inventory/stock
- Receivables/debtors
- Payables/creditors
- Non-current assets
- Property, plant and equipment
- Depreciation
- Disposals
- Revaluations
- Impairment
- Intangible assets
- Patents and licences
- Goodwill (introduction to group accounts)
- Amortisation and impairment
- Research and development costs
- Reporting as an asset vs deductible expense
- Capitalisation criteria
- Provisions
- Profit smoothing
- Restrictions on use
- Contingent liabilities
- Financing
- Debt vs equity
- Types of share and share issues
- Share buy-backs
- Basic debt finance
- Analysis of financing structure
- The analysis framework
- Profitability
- Efficiency
- Liquidity
- Solvency
- Investor ratios
- Profitability
- Growth
- Margins
- EPS
- Working capital days
- Cash cycle
- Short term financing
- Return ratios
- Liquidity
- Current ratio
- Quick ratio
- Interest cover
- Other ratios
- Solvency
- Gearing
- Leverage
- Other ratios
- Investor ratios
- Dividend yield
- Total shareholder return
- Valuation metrics