Advanced Financial Statement Analysis

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  • Fees : 2600 $
  • Date 09 Sep 2018
  • Location Abu Dhabi, English

Advanced Financial Statement Analysis

 

This interactive seminar will develop your skills in analyzing business activities. It will guide you through the key steps of analyzing financial statements, appraising new investments and measuring performance at all levels of your organization. It will develop your ability to generate growth and improve profitability, as well as pinpointing problem areas for remedial action. Over the five modules delegates will acquire skills and technical knowledge which will enable them to manage more effectively.

This seminar will also focus on the key risks that businesses face in today’s uncertain economic, political, and physical environment. Effective risk management is of vital importance in today’s business environment and the seminar will promote the understanding of risks and how to minimize the business exposure to them. Practical case studies will be used in each session, to ensure that delegates can relate their learning to real-world problems.

Course outline

The highlights of this course will be:

 

  • The value of financial reports produced by your organization to managers, and other stakeholders.
  • Where to locate key items of financial information that are important to your management role.
  • How to use a range of tools and techniques to evaluate business performance at all levels.
  • How to ensure that your company is using finance effectively
  • How to value your business.

Objectives

 At the end of this seminar participants will be able to:

  • Read and understand their organization’s Annual Financial Report
  • Evaluate their firm's financial performance
  • Understand and use analytical tools and techniques in practical case-study situations.
  • Use analytical techniques to project future performance.
  • Make critical judgments of accounting policies when evaluating company performance
  • Appreciate the importance of new investments in maintaining growth and competitiveness.
  • Improve their management skills and increase their value to the organization

 

Teaching Method

The seminar will be conducted along workshop principles with formal lectures, case studies and interactive worked examples. Relevant case studies will be provided to illustrate the application of each tool in an operations environment. Each learning point will be reinforced with practical exercises. Discussion in groups will promote exchange of concepts and ideas. Delegates will be provided with a scientific calculator, and a notebook computer, and the tutor will clearly explain and demonstrate how these can be used for a range of calculations and presentations.

Daily Outline

Day 1

Introduction to Advanced Financial Analysis

 

  • Who are the users of financial data?
  • What types of financial information are available to each user group?
  • The published Annual Financial Report (AFR) – what is its purpose?
  • The structure and contents of an AFR – comparison of UAE, UK, and US versions
  • The non-financial elements of the AFR – how important are these?
  • Understanding the three main financial statements: Income Statement, Balance Sheet, Cash flow Statement.
  • Comparison of different formats for the financial statements.
  • Identifying the important numbers from the financial statements.
  • Case study to show how the Income Statement, Balance Sheet, and Cash flow Statement are inter-linked and inter-dependent.

Day 2

 Understanding and Analyzing the AFR

  • Why do we need to analyses the AFR?
  • Using common-size analysis to improve comparability
  • Calculating trends and growth patterns
  • Using Ratio Analysis to assess five key aspects of company performance:

     

     

     

    • Profitability
    • Liquidity
    • Efficiency and Working Capital Management
    • Financing Structure and Risk
    • Investment Performance and Potential
  • Case Study on analysis and interpretation of company performance

 

 

Day 3

 

Analytical tools and how to analyses the Cash flow Statement

  • Introduction to Excel tools for analyzing financial statements.
  • Setting up spreadsheets for common-sizing and ratio analysis
  • Using statistical tools mean, standard deviation, regression analysis.
  • Using graphical representation.
  • How to access data and analysis from Bloomberg and Yahoo! Finance.
  • Why do we need the Cash flow Statement?
  • Key ratios we can calculate from the Cash flow Statement.
  • How to use current cash flow information to forecast future revenues and profits

 

Day 4

 Financing the Business and Valuing the Business

  • Analyzing the Balance Sheet to identify debt and equity, short-term and long-term finance
  • Measuring the company’s capital structure, and estimating the costs of capital:

     

     

     

    • Cost of Equity, using DVM and CAPM
    • Cost of Debt
    • Weighted Average Cost of Capital
  • Case study on Cost of Capital calculation
  • Why do we need to value a business?
  • Business valuation models:

     

     

     

    • Net Asset value – balance sheet, replacement cost, or realizable value
    • Price/Earnings ratio value
    • Dividend growth value
    • Present value of future free cash flows
  • Case study on valuing a business

Day 5

 Identifying creative accounting and forecasting future failure

  • What is creative accounting?
  • Who benefits from creative accounting?
  • How does creative accounting work? – some illustrative examples.
  • Creative accounting scandals – Enron, Worldcom, Parmalat
  • The symptoms of financial distress – financial and non-financial factors
  • Using ratio analysis to identify financial distress or predict future failure
  • Forecasting future failure using ratio combinations – the Altman Z-score model
  • Case study on forecasting future failure

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