Financial Statement Analysis

This two day workshop provides a real-world practical context by incorporating worked examples and case studies that delegates will see how theory applies in practice and can discuss the various issues raised

This workshop will feature:

  • Read and understand their organisation’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

Description

This two day workshop provides a real-world practical context by incorporating worked examples and case studies that delegates will see how theory applies in practice and can discuss the various issues raised

This workshop will feature:

  • Read and understand their organisation’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

How will this Workshop be Presented?

This workshop combines theory and practice. We use company examples to illustrate how the techniques presented have been applied in real case studies. The purpose is to use a mix of proven learning techniques to ensure maximum understanding, comprehension and retention of the information presented.

The Course Content

DAY ONE

Introduction to Financial Statement Analysis

  • Why do we need to analyse 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

Excel skills for Financial Statement Analysis

  • Introduction to Excel tools for analysing financial statements
  • Case Study on analysis and interpretation of company performance

DAY TWO –

Financing the Business and Valuing the Business

  • Measuring the company’s capital structure, and estimating the costs of capital:
  • Cost of Equity (Ke) and Cost of Debt (Kd)
  • Weighted Average Cost of Capital (Ko)
  • Case study on Cost of Capital calculation

Business Valuation Models

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

Financial distress and forecasting company failure

  • 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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