Advanced Financial Statements Analysis
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Advanced Financial Statements Analysis Course
Introduction:
This engaging course aims to enhance your ability to analyze business activities effectively. It will provide step-by-step guidance on analyzing financial statements, evaluating new investments, and assessing performance at all levels of your organization. By participating in this course, you will develop the skills needed to drive growth, enhance profitability, and identify areas that require corrective action. Through the five modules, delegates will gain practical skills and technical knowledge that will improve their managerial effectiveness. Furthermore, the course will emphasize the importance of managing key risks in today's uncertain economic, political, and physical landscape. Effective risk management is crucial in the current business environment, and the course will foster an understanding of risks and strategies to minimize their impact on businesses. Each session will incorporate practical case studies to ensure that delegates can apply their learning to real-world challenges.
Course Objectives:
At the end of this Advanced Financial Statements analysis course, participants will be able to:
· Read and understand their organization’s Annual Financial Report
· Evaluate their firm's financial performance
· Understand and use analytical tools and techniques in practical case-study situations.
· Use analytical techniques to project future performance.
· Make critical judgments of accounting policies when evaluating company performance
· Appreciate the importance of new investments in maintaining growth and competitiveness. Improve their management skills and increase their value to the organization
Who Should Attend?
- Professionals responsible for their firm's financial future CFOs wanting to learn the latest techniques in analysis
- Controllers and treasurers responsible for determining the company’s financial position
- Those seeking a refresher in analytical techniques-including financial analysis
- Accountants, project managers, and budget analysts Any other managers who wish to improve their ability to understand financial information, and apply it to effective decision-making
Course Outlines:
Introduction to Advanced Financial Analysis Who are the users of financial data?
- What types of financial information are available to each user group?
- The published Annual Financial Report (AFR) – what is its purpose?
- The structure and contents of an AFR – comparison of UAE, UK, and US versions the non-financial elements of the AFR – how important are these?
- Understanding the three main financial statements: Income Statement, Balance Sheet, and Cash flow Statement.
- Comparison of different formats for the financial statements.
- Identifying the important numbers from the financial statements.
- Case study to show how the Income Statement, Balance Sheet, and Cashflow Statement are inter-linked and inter-dependent.
Understanding and Analyzing the AFR Why do we need to analyze the AFR?
- Using common-size analysis to improve comparability Calculating trends and growth patterns Using Ratio Analysis to assess five key aspects of company performance:
- Profitability Liquidity Efficiency and Working Capital Management Financing Structure and Risk Investment Performance and Potential Case Study on analysis and interpretation of company performance
Analytical tools and how to analyze the Cash flow Statement Introduction to Excel tools for analyzing financial statements.
- Setting up spreadsheets for common-sizing and ratio analysis Using statistical tools mean, standard deviation, regression analysis. Using graphical representation. How to access data and analysis from Bloomberg and Yahoo! Finance.
- Why do we need the Cash flow Statement?
- Key ratios we can calculate from the Cash flow Statement.
- How to use current cash flow information to forecast future revenues and profits
- Financing the Business and Valuing the Business Analyzing the Balance Sheet to identify debt and equity, short-term and long-term finance measuring the company’s capital structure, and estimating the costs of capital: Cost of Equity (Ke), using DVM and CAPM Cost of Debt (KD) Weighted Average Cost of Capital (KO) Case study on Cost of Capital calculation
- Why do we need to value a business?
- Business valuation models: Net Asset value
- balance sheet, replacement cost, or realizable value Price/Earnings ratio value Dividend growth value Present value of future free cash flows Case study on valuing a business
Identifying creative accounting and forecasting future failure what is creative accounting?
- Who benefits from creative accounting?
- How does creative accounting work?
- Some illustrative examples. Creative accounting scandals
- Enron, WorldCom, Parma at the symptoms of financial distress
- Financial and non-financial factors Using ratio analysis to identify financial distress or predict future failure Forecasting future failure using ratio combinations
- The Altman Z-score model Case study on forecasting future failure