Financial Statement Analysis

Price: $995   Register now

Recommended that you register at least two weeks in advance.

Course Features

  • Course date:01/24/2020
  • Course Duration: 1 Day
  • Level: Beginner-intermediate
  • Prerequisites: None
  • Method: Live & Virtual
  • Venue: MicroTek
  • Time: 9:00 am – 5:00 pm
  • Dress Code: Business Casual

Financial Statement Analysis

This one-day course demonstrates how key financial terminology is used in financial statement analysis. The major analysis includes valuation, corporate performance measurement, and evaluating the creditworthiness of a business. Some key methods will be discussed and demonstrated with calculation examples. These methods will also be applied to major investment themes in today’s financial world. While terminology can be specific, practice and interpretation can lead to controversial decisions among users.

Target Audience

This course is particularly appropriate for professionals who wish to broaden their knowledge of financial markets, wish to have a concise refresher course, and may seek further financial training. It is also useful for those who may deal with business and financial activities, such as, consulting, business media, investment relation departments, wealth management, regulatory activities, political organizations

Objectives

By the end of the program, participants will learn to:

  • Understand how a company’s business and financing activities are reflected in its financial statements
  • Utilize key components of financial statements (balance sheet, profit and loss, and cash flow) in their analyses
  • Appreciate the distinction between cash flow and profits
  • Measure operating, investing and financial performance using appropriate ratios and cash flow tools
  • Interpret the key impacts of financial statement footnotes
  • Understand the influence of non-financial statements on traditional financials
  • Understand the role of corporate governance and regulations in financial reporting

Part 1 – Foundations

  • The interrelation of the balance sheet, income statement, and cash flow statement
  • Role of audited statements, objectivity, independence
  • Financial and non-financial statements
  • Acronyms and definitions
  • IFRS/GAAP vs non-IFRS/GAAP
  • Typical categories on statements
  • Key accounting policies

Exercise: Exploring the key parts of the financial statement

Part 2 – Financial Statement Interpretations

  • Operating performance and the business cycle
  • Income statement formulation
  • Accounting and true earnings
  • Ratios to assess the quality and stability of earnings
  • Key asset categories
  • Return on assets and equity and growth implications
  • The meaning of net working capital
  • Fixed asset efficiency
  • Deriving a cash flow statement
  • Operating, investment and financing cash flows
  • Major tricky analytical interpretations of key accounting items
  • Clues of financial fraud

Exercise: Calculate a cash flow statement

Part 3 – Capital Structure and Funding Implications

  • Funding strategies
  • Debt vs. equity: the pecking order theory, tradeoffs on capital structure
  • Liquidity, solvency, leverage
  • Debt service obligations including leases, pension obligations
  • Off-balance sheet liabilities including legal, environmental, derivatives
  • Coverage ratios: a company’s ability to service its financial obligations

Exercise: credit risk exercise

Session 4 – Measuring of Performance and Valuation Using Financial Ratios

  • Commonly used ratios
  • Ratios for specific industries
  • Limitations of ratios
  • Dupont analysis – return on equity and its components
  • Evaluate performance using peer analysis.
  • Relative value vs discounted cash flow approaches

Exercise: Applying valuation ratios for selected industries

Instructor

  • V. John Palicka CFA CMT  has over 30 years of experience in researching and managing money in global, emerging, and US small-cap stocks.  He is currently in his 27th year as President and Chief Portfolio Manager at Global Emerging Growth Capital (GEGC). GEGC provides three major financial services: asset management, corporate finance, and knowledge consulting …
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