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Advanced Financial Statements Analysis
Course
Accounting, Finance & Budgeting
Course Overview
This interactive Advanced Financial Statements Analysis training course is designed to enhance your ability to analyse financial information, assess business activities, and evaluate key risks in today’s dynamic global environment. Participants will gain practical skills in financial statement analysis, investment evaluation, and performance measurement, enabling them to identify growth opportunities, improve profitability, and take remedial action where necessary.
The course is tailored for both financial and non-financial managers, providing essential financial skills and technical knowledge for effective organizational management.
Key Learning Highlights
- Understanding the value of the annual report, accounts, and other key financial information sources.
- Applying tools and techniques to evaluate financial position and performance.
- Effective acquisition and utilization of financial resources.
- Capital investment and business valuation analysis.
- Identifying, analyzing, and managing business and financial risk.
Course Objectives
By the end of this programme, participants will be able to:
- Analyse and interpret an organization’s annual report and accounts.
- Use ratio analysis to evaluate financial position and performance.
- Forecast future performance using analytical techniques.
- Assess the impact of subjective accounting policies on financial statements.
- Evaluate the influence of profit, cash flow, and risk on capital investment projects and business valuations.
Course Audience
This course is suitable for personnel from corporations, governmental organizations, and other entities, including:
- Finance, Accounting, Budgeting, and Planning professionals.
- Project Managers and other professionals involved in decision-making.
- CFOs, Controllers, and Treasurers.
- Managers seeking to refresh and enhance financial analysis skills.
- Senior Accountants.
Course Methodology
The course adopts a workshop-based approach, combining formal presentations with practical examples and real-world case studies. Key features include:
- Interactive exercises and team-based case studies.
- Application of financial tools and techniques in practical scenarios.
- Group discussions to exchange ideas and experiences.
- Visual and simplified explanation of complex financial concepts.
- Guidance from an experienced instructor with extensive expertise in financial analysis.
Course Outline
Day 1: Introduction to Advanced Financial Analysis
- Importance of financial data analysis
- Users and sources of financial information
- Purpose and structure of annual reports and accounts
- Creative accounting, financial scandals, and agency problems
- Corporate governance, sustainability, ethics, and CSR reporting
- Overview of the three main financial statements: Income Statement, Balance Sheet, Cash Flow Statement
Day 2: Analysing the Annual Report and Accounts
- Ratio and analytical techniques for financial performance evaluation
- Profitability and Cost-Volume-Profit (CVP) analysis
- Efficiency, working capital, and liquidity assessment
- Investment and growth evaluation
- Long-term solvency and financial structure analysis
- Ratio and trend analysis using Excel (horizontal, vertical, and common-size)
Day 3: Analytical Tools, Cash vs. Profit, and Cash Forecast
- DuPont system of ratio analysis and pyramids of ratios
- Segmental and value-added analysis
- Statistical and graphical tools for financial analysis and forecasting
- Alternative asset valuation methods and their impact
- Cash flow vs. profit, working capital, and operating cash cycle
- Direct and indirect cash flow analysis
Day 4: Financing, Capital Investment, and Business Valuation
- Balance sheet analysis: long-term debt, equity, and short-term financing
- Capital cost models: cost of equity (Dividend Growth & CAPM), cost of debt
- Weighted Average Cost of Capital (WACC) and optimal capital structure
- Present and future value calculations, Discounted Cash Flow (DCF)
- Investment appraisal techniques: NPV, IRR, MIRR, and EAC
- Business valuation models and methodologies
Day 5: Predicting Corporate Failure, Business, and Financial Risk
- Predicting financial distress using the Altman Z-score
- Risk and uncertainty management
- Quantitative risk analysis: expected values, standard deviation, coefficient of variation
- Sensitivity, simulation, scenario, and break-even analysis
- Managing systematic and unsystematic risks, business and financial risks
- Mitigating financial risk using insurance, hedging, and derivatives