Financial Statement and Analysis training course
Financial Statement and Analysis training course

Course Objectives

By the end of the course, participants will be able to:

  • Apply the framework of financial statements analysis
  • Use ratio and financial analysis
  • Interpret company financials and industry position
  • Appraise the process of company evaluation and analysis
  • Analyze real-life financial statements from companies traded on the world and ‘GCC’ stock exchanges
  • Prepare financial analysis template models

Course Outline

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 cycle
  • Financial reporting mechanics
  • Relationship, elements and classification of financial statements

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)

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
    • The five important components of a balance sheet
  • Statement of changes in owners equity
  • Cash flow statement:
    • Operating, investing, and financing activities
    • Direct versus indirect methods in cash flow preparation
    • Reading and interpreting cash flow
    • The cash rich standard

Mechanisms of financial analysis techniques

  • Vertical analysis and strategy: balance sheet and income statement approaches
  • Horizontal, trend analysis and growth
  • Liquidity analysis:
    • Current, quick, and cash ratios, defensive interval and cash conversion cycle
  • Asset management and activity ratios:
    • Total and fixed assets turnover
  • Solvency analysis:
    • Debt, equity, and times interest earned ratios
  • Profitability analysis:
    • Profit margin, gross margin, return on assets, return on equity
  • Market and valuation:
    • Price earnings and earnings-per-share ratios
  • DuPont analysis: the three-step and five-step models
  • Limitation of ratio analysis

Financial statement analysis: applications and presentations

  • Evaluating a company’s past performance
  • Comprehensive real life analysis of publicly traded companies