INTRODUCTION

This interactive Advanced Financial Statements Analysis training course will update and develop your skills of analysing financial information, business activities, and the key risks faced in today’s uncertain economic, political, and physical global business environment. It will guide you through the key steps of analysing financial statements, evaluating new investments, and measuring the performance of your organisation. Throughout this course, the participants will be able to relate their learning to real-world issues and problems and develop their ability to generate growth and improve profitability, as well as pinpointing problem areas for remedial action and will have the opportunity to acquire financial skills and technical knowledge that will enable them to manage more effectively.

Objectives

Analyse and interpret an organisation’s annual report and accounts

Use ratio analysis to evaluate financial position and financial performance

Use analytical techniques to forecast future performance

Critically evaluate the impact on financial position

Performance of the subjective nature of accounting policies

Identify the impact of profit, cash flow and risk on capital investment projects and business valuations.

Course Outline

DAY 1

Introduction to Advanced Financial Analysis

Why analyse financial data?

Who are the users of Financial Information?

Sources of Financial Information

Published Annual Reports and Accounts – What is their purpose?

The Structure and Contents of an Annual Report and Accounts

Creative Accounting, Financial Scandals, and the Agency Problem

Corporate Governance, Sustainability, Ethics and Corporate and Social Responsibility (CSR) Reporting

The Three Main Financial Statements

Income Statement

Balance Sheet

Statement of Cash Flows

DAY 2

Analysing the Annual Report and Accounts

Using Ratio and Other Analyses of the Annual Report and Accounts to Assess Financial Position and Financial Performance

Profitability and Cost-Volume-Profit (CVP) Analysis

Efficiency and Working Capital

Liquidity and the Short-term Solvency

Investment and Growth

Financial Structure and Long-term Solvency

Ratio Analysis using Excel

Excel Trend Analysis using Common-size Horizontal Analysis and Vertical Analysis for Comparability

DAY 3

Analytical Tools, Cash vs. Profit and the Cash Forecast

The Dupont System of Ratio Analysis and Pyramids of Ratios

Segmental Analysis and Value Added Analysis of the Annual Report and Accounts

The Fundamental Statistical Tools and Graphical Representations

Using Statistical Techniques to Analyse and Forecast Financial Data

The Impact of Alternative Asset Valuation Methods on the Balance Sheet and Profitability

Cash flow vs. Profit – The Best Measure of Financial Performance

Working Capital and the Cash Flow Operating Cycle

Direct and Indirect Cash Flow Analysis and the Cash Flow Forecast

DAY 4

Financing the Business, Capital Investment Project and Business Valuation

Analysis of the Balance Sheet to Identify Long-term Debt and Equity, and Short-term Financing

Capital Cost Models: Cost of Equity using Dividend Growth and Capital Asset Pricing Model (CAPM); Cost of Debt

Weighted Average Cost of Capital (WACC)

Optimal Capital Structure Models to Minimise WACC

Future Values, Present Values, and Discounted Cash Flow (DCF)

Using Net Present Value (NPV), Internal Rate of Return (IRR), Modified Internal Rate of Return (MIRR) and Equivalent Annual Cost (EAC) to Analyse and Evaluate Capital Projects

The Reasons for Business Valuations

Business Valuation Models

DAY 5

Analysing and Predicting Corporate Failure, Business and Financial Risk

Predicting Financial Distress and Corporate Railure – The Altman Z-score Model

Risk and Uncertainty

Risk Analysis using Expected Values, Standard Deviation and Coefficient of Variation

Sensitivity, Simulation, Scenario and Break-even Analysis Techniques

The Analytical Tools to Manage Risk

Systematic Risk, Unsystematic Risk, Business Risk and Financial Risk

Financial Risk– Interest Rate and Foreign Currency Exchange Rate Exposures

Using Insurance, Hedging and Derivatives to Mitigate and Minimise risk