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Core Financial Statement Analysis Course

Aims

The course aims to teach delegates how to analyse and interpret company accounts. Beginning with fundamental accounting concepts the course explains what the entries in the accounts mean in commercial and practical terms and how the balance sheet, income statement and cash flow are linked and interact. Delegates will build accounts and understand how the operation of the business and the cash cycle in a business drives the “shape” of the accounts and the company’s ability to generate cash (or not!). Delegates will learn how to calculate key operating and performance metrics used in valuation and credit assessment. The course will also show delegates the most common accounting adjustments made to these metrics to make them comparable across companies with interesting corporate structures, involving pension deficits and leasing for example.


Objectives

At the end of the workshop, delegates will understand:

  • The core principles driving the relationship between principal financial statements
  • The components of accounts and their significance in measuring value and credit risk
  • The interaction between the three accounts
  • The most common metrics used by analysts to value businesses and assess creditworthiness and how to calculate them and adjust them

Who should attend?

  • Portfolio managers
  • Equity and fixed income analysts
  • Graduate entrants
  • Client relationship managers

Core Financial Analysis

  • Accounting overview
  • Review of published accounts
  • Balance sheet
  • Income statement
  • Cash flow statement
  • Creating robust and reconciling financials
  • Identifying key metrics

Add-on module 1: Business Combinations

  • Consolidation methods and impact on metrics
  • M&A accounting
  • Off balance sheet items: equity method investments

Add-on module 2: Accounting for Pension Obligations and Leases

  • Pension obligations
  • Lease accounting

Add-on module 3: Issue Spotting

  • Leverage
  • Off balance sheet items: leases
  • Off balance sheet items: defined benefit pension obligations
  • What value?
  • Revenue recognition
  • Working capital analysis
  • Read the small print - red flags