Course Outline
Introduction to Corporate Financial
Statements
Objectives
This two-day workshop is designed to explain how financial measures of corporate performance are
calculated and used to assess credit worthiness of a business. The course covers the basics of financial
statement analysis and enables participants to confidently use financial terminology. This is an introductory
level workshop designed for users of financial reports and accounts who have no prior or limited knowledge of
corporate financial information; it focuses on the numbers behind the risks rather than the risks themselves.
This is a highly interactive workshop and a case study will be used to illustrate key learning points.
Specifically participants will understand:
• How a company’s business and financing activities are reflected in its financial statements
• The components of financial statements – balance sheet, profit and loss and cash flow
• The distinction between cash flow and profits
• How to measure operating, investing and financial performance using appropriate ratios and cash flow
tools
• How to review and interpret the key impacts of ‘Notes to the Accounts’ and describe the key accounting
rules (IFRS) and their significance
Content
Overview
Introduction to financial statements and commonly used terminology
• The purpose payback model
• Relate a business to its balance sheet and profit and loss account
• Typical presentation of company financial statements
• A glossary of common financial terminology
Types and Presentation of Financial Statements
Focus on the key components of financial statements and highlight some of the variances of financial
disclosure
• IFRS presentation of company financial statements
• Key balance sheet categories
• Profit and loss account
• Cash flow statements
• Sources and quality of disclosure
• Key accounting policies
• Notes to the accounts
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Course Outline
Business and Operating Appraisal
How the presentation of financial statement is driven by the characteristics of the business
• Operating performance and the business cycle
• Accounting for sales and expenses
• Ratios to assess the quality and stability of earnings
• Key asset categories
• Return on assets and its components
• The meaning of net working capital
• Fixed asset efficiency
• Deriving a cash flow statement
• Operating, investment and financing cash flows
• Illustration case study
Liability and Capital Structure
Understand how and why difference companies fund their businesses
• Spontaneous finance from suppliers
• Debt and equity: short term versus long term
• Liquidity and solvency
• Accounting for liabilities
• Funding ratios
• Debt service obligations
• Dividend policy on earnings and cash flow
• Off balance sheet liabilities
• Using the cash flow to analyse a company’s ability to service its financial obligations
• Illustration case study
Ratio Analysis
Measure of performance using financial ratio analysis and their limitations
• Dupont analysis – return on equity and its components
• Evaluate performance using peer analysis
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H:\CSMT\Clientspec\FITCHLEARNING\Introduction to Corporate Financial Statements\outline\Introduction to Corporate Financial Statement COURSE OUTLINE 131212.docx 5-Feb-14