How to Analyse Financial Statements

The ability to read and interpret financial information is a key skill for any aspiring business professional. The workshop will take delegates through the key ratios that will help to read and interpret financial information. From examining the profitability in the income statement, to assessing the strength of a balance sheet and on to the ability of a company to generate cash - this workshop will provide delegates with a the tools and the confidence to be able to assess the financial strength of a company in a short period of time. Packed with helpful tips and using well-known companies, this workshop is a practical hands-on course, which clearly shows how to apply the theory to a wide variety of financial statements.

Reed courses certificate of completion

Digital certificate - Included

• Introduction 17:46

  • 1: Overview Preview 06:32
  • 2: Where to Look for Financial Statements 10:14
  • 3: Resources - Links to Financial Statements for analysis 01:00

• The Financial Statements 2:26:54

  • 4: Introduction 01:43
  • 5: Income Statement 44:20
  • 6: Statement of Comprehensive Income 04:41
  • 7: Balance Sheet 25:29
  • 8: Capital 15:48
  • 9: Movement in Equity 27:09
  • 10: Cash Flow Statement 27:44

• Profitability Margin Analysis 51:56

  • 11: Introduction 00:16
  • 12: Profit Margins - Gross, Operating & Net 21:43
  • 13: EDIT & EBITDA 18:47
  • 14: Operational Gearing Ratio 11:10

• Return on Investment Analysis 32:32

  • 15: Introduction 00:36
  • 16: Return on Investment (ROI) 01:00
  • 17: Return on Capital Employed (ROCE) 07:25
  • 18: Return on Assets (ROA) 05:29
  • 19: Weighted Average Cost of Capital (WACC) 12:28
  • 20: Economic Value Added (EVA) 05:34

• Efficiency Ratio Analysis 11:49

  • 21: Introduction 00:20
  • 22: Asset Turnover Ratio 05:32
  • 23: Du Pont Analysis (1) - ROCE 05:57

• Solvency Ratio Analysis 1:01:10

  • 24: Introduction 00:53
  • 25: Debt to Equity Ratio 19:25
  • 26: Leverage Ratio 05:18
  • 27: Interest Cover Ratio 17:40
  • 28: Net Debt to EBITDA Ratio 09:10
  • 29: Du Pont Analysis (2) - ROE 08:44

• Liquidity Ratio Analysis 1:31:48

  • 30: Introduction 00:25
  • 31: Current Ratio 30:59
  • 32: Quick Ratio / Acid Test 16:44
  • 33: Working Capital Requirement 43:40

• Cash Flow Analysis 54:58

  • 34: Introduction 00:23
  • 35: Operating Cash Flow (OCF) 36:20
  • 36: Net Cash Flow (NCF) 06:39
  • 37: Free Cash Flow (FCF) 11:36

• Asset Valuation 1:05:04

  • 38: Introduction 00:46
  • 39: Relative & Absolute Valuation 09:45
  • 40: Dividend Cover Ratio 08:26
  • 41: Dividend Yield 09:13
  • 42: Price to Earnings (PE) Ratio 12:02
  • 43: Market Capitalisation to Net Asset Value (Goodwill) Ratio 24:52

• Other Considerations 1:17:36

  • 44: introduction 00:31
  • 45: The Auditor's Report 15:44
  • 46: Resources - Kop Football 2009 47:00
  • 47: Commitments & Contingent Liabilities 04:10
  • 48: Earnings Per Share (EPS) 02:38
  • 49: The Notes to the Accounts 03:14
  • 50: The Business Model 00:55
  • 51: Economic Moat 03:24

• Review 03:55

  • 52: Review 03:55

We start with the basics of the key financial statements - what they are (income statement / balance sheet / cash flow statement) and how they interact. We then look at reading and interpreting this financial information including:

- Profitability analysis: Gross, Operation & Net Profit Margins; EBIT and EBITDA; Operational Gearing

- Return on Investment: Return on Capital Employed (ROCE); Return on Assets (ROA); the Weighted Average Cost of Capital (WACC); the ability to generate value measured though the Economic Value Added (EVA)

- Efficiency: Asset Turnover; Du Pont Analysis (examining how the ratios interact)

- Solvency: Debt to equity; Leverage; Interest Cover; Net Debt to EBITDA; Du Pont Analysis revisited; Return on Equity (ROE)

- Working Capital: Current Ratio; Acid Test / Quick Ratio; Working Capital Requirement

- Cash Flow: Operating Cash Flow (OCF); Net Cash Flow (NCF); Free Cash Flow (FCF)

- Asset Valuation: fundamental v relative valuation; Dividend Cover & Yield; PE Ratios; Goodwill

Finally we will consider other considerations to bear in mind when assessing the financial health of an organisation.

This course is for aspiring finance professionals who want to hone their skills in reading a set of financial statements. It will also appeal to any aspiring business professional who has a grasp of the fundamentals of business finance and is looking to improve their financial fluency.

We recommend that a basic understanding of finance for this workshop including:

- How a company is financially structured

- How a company trades

- How a company is funded

A good introduction to this workshop is "How to Talk Finance"

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