Advanced Financial Statements Analysis Course

Course Overview:

The Advanced Financial Statements Analysis course is aimed at enabling delegates gain a broader and indepth understanding of their organizations’ financial reports as well as tools for performance evaluation.

The stance tasks the participants to formulate income statements, balance sheets, and cash flow statements in order to measure profitability, liquidity, efficiency and investment effectiveness.

The course also includes analytical skills, familiarization with tools such as ratio analysis, common-sizing, trend analysis and even statistical analysis in Excel to predict performance and the financial viability of a business.

It also provides information on business valuation methodologies such as the Weighted Average Cost of Capital, WACC, and Present Value models. In addition, the course provides skills on how to recognize abnormal or creative accounting practices and how to estimate the likelihood of events such as financial distress employing the Altman Z-score.

Intended for CFOs, accountancy professionals, managers of budgets and budget analysts, the course provides enhanced decision-making and financial management skills which are imperative in the modern organizational environment.

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

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