Training on Financial Statement Analysis

Module 1: Introduction to Financial Statements

• Overview of Financial Statements
• Key Components: Income Statement, Balance Sheet, Cash Flow Statement
• Understanding the Accounting Cycle
• Introduction to GAAP and IFRS
• Case Study: Review a company’s set of financial statements and identify the key components.
• Practical Exercise: Map transactions through the accounting cycle to understand their effect on financial statements.

Module 2: Income Statement Analysis

• Detailed Breakdown of Revenue, Expenses, and Profits
• Gross Profit, Operating Profit, and Net Profit
• Analyzing Revenue Streams and Cost Structures
• Profitability Ratios: Gross Margin, Operating Margin, Net Margin
• Case Study: Analyze an income statement of a real company to identify key profit drivers.
• Practical Exercise: Calculate profitability ratios and interpret the results to assess performance.

Module 3: Balance Sheet Analysis

• Assets, Liabilities, and Equity Overview
• Liquidity and Solvency Analysis
• Working Capital Management
• Financial Ratios: Current Ratio, Quick Ratio, Debt to Equity Ratio
• Case Study: Examine a balance sheet to evaluate a company’s financial health and solvency.
• Practical Exercise: Compute liquidity and leverage ratios and prepare a short assessment report.

Module 4: Cash Flow Statement Analysis

• Understanding Cash Flow from Operating, Investing, and Financing Activities
• Free Cash Flow Analysis
• Cash Flow Ratios
• Cash Flow Forecasting and Budgeting
• Case Study: Review a company’s cash flow statement to detect potential cash management issues.
• Practical Exercise: Prepare a simple cash flow forecast and calculate key cash flow ratios.

Module 5: Advanced Financial Analysis Techniques

• Ratio Analysis and Interpretation
• Trend Analysis and Comparative Financial Statements
• DuPont Analysis
• Communicating Financial Analysis to Stakeholders
• Case Study: Analyze a company’s financial trends over three years and present insights.
• Practical Exercise: Perform DuPont analysis and prepare a summary report for management or investors.