Financial Statement Analysis
Previous Courses: Internal Rate of Return
Next Lesson: Types of Financial Analysis
Financial Statement Analysis course will introduce you to the informational content of the financial statements and use the basic analysis tools. You will be able to understand a statement of financial position, a statement of comprehensive income, a statement of changes in equity, and a statement of cash flows. You will also be able to understand the information contained in the notes to the financial statements. You will also be able to analyze the financial position, performance and cash flow of an organization by identifying key performance indicators.
The first step in an enterprise financial statement analysis is to understand the activity that takes place there and especially the sales made. The second step is to study the costs that have been incurred to carry out this activity. The point of view widens and therefore appears questions that affect the assessment of the operational efficiency of the company and in particular the evolution of operating margins. The analysis continues with the study with the mechanism of formation of the profitability of a company. At this stage, there is a key concept of EBIT or Earnings Before Interest and Taxes or earnings before taxes and financial charges. It is one of the most followed indicators. It contains all the recurrent sources of profit: exploitation, financial activities and other participations. Then, other elements of a more exceptional character or at least more difficult to relate to the current activity of the company are treated.
Course Outlines
| Selected Topics for Financial Statement Analysis |
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| Types of Financial Analysis |
| Common Size Analysis |
| Ratio Analysis |
| Liquidity Ratios |
| Activity Ratios |
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You actually make it seem so easy with your presentation but I find this matter to be really something that I think I would never understand. It seems too complex and extremely broad for me. I am looking forward for your next post, I’ll try to get the hang of it!