Whereas management uses the analysis to help in making operating, investing, and financing decisions, investors and creditors analyze financial statements to decide whether to invest in, or loan money to, a company. This program provides the skills and training necessary to be a complete financial analyst. %PDF-1.6 %���� advanced overview of financial statements analysis. The course includes a list of red flags you can use in your financial statement analysis. Section 4 explains how to compute, analyze, and interpret common financial ratios. A financial leverage ratio provides information on the degree of a company's fixed financing obligations and its ability to satisfy these financing obligations. Course description. Objectives The course is designed to provide a detailed understanding of the structure of financial statements: the balance sheet, the income statement, the cash flow statement and the notes. Retained Earnings Statement For the Years Ended December 31 Increase or (Decrease) during 1999 2003 2002 Amount Percentage Retained earnings, January 1 $ 525,000 $ 376,500 $ 148,500 39.4% Add: Net income 263,800 208,500 55,300 26.5% 788,800 585,000 203,800 No material is needed for the course, except writing materials if the student wishes to take notes. Academia.edu is a platform for academics to share research papers. This is one of over 2,200 courses on OCW. The typical tools used in financial statement analysis are comparative analysis, common size analysis, and ratio analysis. Once these concepts have been explained, participants learn how to analyze the financial statements using analytical tools from different user perspectives. Course’Outline’ ’!"6"!" Don't show me this again. MIT OpenCourseWare is a free & open publication of material from thousands of MIT courses, covering the entire MIT curriculum.. No enrollment or registration. . ACCT!581:!Financial!Statement!Analysis! Benchmark comparison is the use of pre-specified industry norms or benchmarks. Welcome! This course explores in greater depth financial reporting from the perspective of financial statement users. This course increase knowledge and skill of accounting and finance and full knowledge of accounting and finance\n\nThank you coursera. Sections 5 through 8 explain the use of ratios and other analytical data in equity Finally, valuation ratios compare the current market price of a company stock to certain items from the financial statements. The Financial Analysis for Microfinance Institutions course provides participants with an understanding of the different ratios used by microfinance institutions, what they mean, and how they can be used to keep track of an institution’s financial performance over time. Time series analysis, Cross-sectional analysis, and Benchmark comparison. CHAPTER 6 Financial Statements: Analysis and Interpretation Meaning of Financial Statements Every business concern wants to know the various financial aspects for effective decision making. I have years of equity research experience where I have provided detailed financial statement analysis services to many blue chip hedge funds. To view this video please enable JavaScript, and consider upgrading to a web browser that Audience We will then focus on how we can understand the financial health and performance of the company by examining a number of important financial ratios that are derived from the financial statements of the company. We will wrap up this video by defining the five most common categories of financial ratios. This session shows how a cash flow statement links in with the other financial statements before discussing the limitations of it as a source for analysis. This interactive course provides participants with an understanding of the key performance indicators and main balance sheet and income statement accounts for banks. This course brings together the key elements of financial statement analysis. h�b```a``�����`R� Ȁ �@V �X��~ʴ��Y���u5JB70�ut40��� �b`��HK �$X$�A�х�s%�$�2�,�y�#,�̭�YX��s�Ә�,n��� z��t#��[L,Pgp30���t�_ ���t_ʿ w,/�Ï@������L?�C�2� ��(� finance course. Welcome! This course is designed to prepare students to interpret and analyze financial statements for tasks such as credit and security analyses, lending and investment decisions, and other decisions that rely on financial data. Key Learning Outcomes: The risks in the different business lines and products offered by financial institutions and how they are reflected in the financial statements For example, this could mean that a common size income statement would report all income statement items as a percentage of revenues. Find materials for this course in the pages linked along the left. Org, [MUSIC] How do we determine if the company is doing well, financially or not? supports HTML5 video. This basic flow of cash through the business introduces two financial statements: the balance sheet and the statement of cash flows. Knowledgeable instructor: I have a Bachelor’s degree in accounting and finance. endstream endobj 167 0 obj <>/Metadata 15 0 R/Outlines 23 0 R/PageLayout/OneColumn/Pages 164 0 R/StructTreeRoot 50 0 R/Type/Catalog>> endobj 168 0 obj <>/ExtGState<>/Font<>/ProcSet[/PDF/Text/ImageC]/XObject<>>>/Rotate 0/StructParents 0/Tabs/S/Type/Page>> endobj 169 0 obj <>stream Next time, we will start looking at the various types of ratios within each category of financial ratios. If you already have a grasp ... financial statements try to capture operating performance over the fixed period of a year. 1. explain the role of business analysis and financial statement analysis, and the relationship between them 2. describe the financial reporting environment, concepts and assumptions for preparation of financial statements, and articulation of financial statements 3. describe the major differences between US GAAPs and HKFRSs 4. Find materials for this course in the pages linked along the left. The cash flow statement is, fundamentally, free from any accounting judgement/manipulation and could be used as trustworthy source for analysis. and Reading The Balance Sheet.) Having a detailed understanding of financial statements is critical to assessing financial risk, and the rapid change in financial statement standards makes this a continuing challenge. The course is a video format utilizing PowerPoint slides. Financial Statement Analysis is an applied perspective on analyzing financial statements. %%EOF h�bbd```b``V ��@$�ɩ"Y��eK��z�l%XDD��u�$�ɇ �Q�N�Y Financial reporting refers to the document that specifies and releases the financial statement and other information to its stakeholders and other public. Financial analysis is also critical in evaluating the relative stability of revenues and earnings, the levels of operating and financial risk, and the performance of management. The purpose of this module is to equip you with the skills required to identify accounting information required for building trading strategies. Financial statement analysis is a comprehensive analysis of a company's strategy, its competition, regulations and taxes that affect it, its past current and financial performance, the fundamental valuation of a company relative to its stock price, and planning for … Liquidity ratios, on the other hand, measure if a company has enough cash to meet its shutdown financial obligations. [MUSIC]. This course is designed to be different from other financial statement analysis courses. Course description. MIT OpenCourseWare is a free & open publication of material from thousands of MIT courses, covering the entire MIT curriculum.. No enrollment or registration. The preparation of financial statement is required in order to achieve the objectives of the firm as a whole. Q��Q R�;�t.��`Y�)6��H2��ے$���b`���������� 4jx We will focus mostly on ratio analysis. The Financial Statements Three fi nancial statements are critical to fi nancial statement analysis: the balance sheet, the income statement, and the statement of cash fl ows. ACCT!581:!Financial!Statement!Analysis! The next is the income statement , shown in Figure 3.2, which provides information on the revenues and expenses of the firm, and the resulting income made by the firm, during a period. financial position that may lead to false conclusions. EXERCISE 6: FINANCIAL STATEMENT ANALYSIS Below is the income statement and balance sheet of Taqiu Sdn Bhd. Time-series analysis is the comparison of a firm with itself over time. In this video, we will introduce the idea of financial statement analysis. There are three main skills students will learn upon completion of this course: Earnings management – how and why managers can move earnings up and down using accounting tricks, and how to detect and adjust for this. An activity ratio relates information on a company's ability to manage its resources (that is, its assets) efficiently. Comparative analysis is the evaluation of consecutive financial statements of a company to identify the direction, speed, and magnitude of any trends in financial performance. Cross-sectional analysis is the comparison of different companies in an industry at a given point in time. To learn how to perform this analysis step-by-step please check out our Financial Analysis Fundamentals Course. Judgement/Manipulation and could be reported as a percentage of revenues in order to achieve the objectives of the same in. Relates information on a company income of $ 0.60 billion at the end of 2015 their. Key performance indicators and main balance sheet of Taqiu Sdn Bhd is the evaluation the! $ 0.60 billion at the various types of ratios within each category of financial try... 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