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 Cross-sectional analysis is the comparison of different companies in an industry at a given point in time. 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. The analysis of financial statements, respectively the analysis of the financial reports are used by managers, shareholders, investors and all other interested parties regarding the company's state. Time series analysis, Cross-sectional analysis, and Benchmark comparison. 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. The course includes a list of red flags you can use in your financial statement analysis. Don't show me this again. This sort of document adds balance sheets, cash flow, net income, and other asset capital details. Course’Outline’ ’!"6"!" 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 In this video, we will introduce the idea of financial statement analysis. This course presents an introduction to the basics of financial accounting and finance for IT professionals. Similarly, all balance sheet items could be reported as a percentage of total assets. ACCT!581:!Financial!Statement!Analysis! To learn how to perform this analysis step-by-step please check out our Financial Analysis Fundamentals Course. We saw that Amazon had a net income of $0.60 billion at the end of 2015. In this course, we will mostly focus only on time-series analysis. Course description. h�bbd```b``V ��@$�ɩ"Y��eK��z�l%XDD��u�$�ɇ �Q�N�Y Common size financial statements are an important tool in financial statement analysis. 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. Org, [MUSIC] How do we determine if the company is doing well, financially or not? %PDF-1.6 %���� 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. What makes this the best financial statement analysis course out there? This course is designed to be different from other financial statement analysis courses. 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. Selected ratios of the industry average are also supplemented: Taqiu Sdn Bhd Income Statement For the year ended December 31, 2017 and 2016 2017 RM 2016 RM Sales revenue Cost of goods sold Gross profit Administrative expenses Selling expenses 3143,980 1960,700 1183,280 … 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 give me lots of key point for accounting and finance management. Sections 5 through 8 explain the use of ratios and other analytical data in equity financial statement analysis plays the same role in the decision-making process. Solvency ratios measure if a company has sufficient cash to meet its long term financial commitments. . 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. Financial statement reporting and analysis are two different things but of the same background. 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 Statement Analysis /Accounting Training The Street’s accounting seminars are designed to prepare individuals for the challenges of corporate valuation and financial modeling by providing the building blocks that are employed in these forecasting techniques. This course explores in greater depth financial reporting from the perspective of financial statement users. This is one of over 2,200 courses on OCW. The approaches used with each of these tools are as follows. Don't show me this again. Activity ratios measure a company's ability to convert various assets and liabilities into cash or sales. supports HTML5 video. An activity ratio relates information on a company's ability to manage its resources (that is, its assets) efficiently. This sort of document adds balance sheets, cash flow, net income, and other asset capital details. and Reading The Balance Sheet.) We will wrap up this video by defining the five most common categories of financial ratios. 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. © 2020 Coursera Inc. All rights reserved. The course is a video format utilizing PowerPoint slides. 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 financial position that may lead to false conclusions. 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. For this, prior accounting analysis is important, and interpretation is very important. Now it’s time to look at a different way to evaluate the income statement. Get help with your Financial statement analysis homework. work for financial statements and the place of financial analysis techniques within the framework. The second part of the course will focus on the basics of finance. This is especially useful when you compare two companies that are widely different revenues. We will also talk about the different tools used in financial statement analysis as well as the approaches use with each tool. This basic flow of cash through the business introduces two financial statements: the balance sheet and the statement of cash flows. We will focus mostly on ratio analysis. Want a review of financial statements and financial ratios? historical, current, and potential profitability of a company. Common size analysis is the evaluation of the internal make-up of financial statements and or financial statements items across companies. HORIZONTAL ANALYSIS OF RETAINED EARNINGS STATEMENT QUALITY DEPARTMENT STORE INC. In this course, we will focus only on financial performance and fundamental evaluation relative to stock price. Access the answers to hundreds of Financial statement analysis questions that are explained in a way that's easy for you to understand. 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. 213 0 obj <>stream Vertical and horizontal income statement analysis %%EOF MIT OpenCourseWare is a free & open publication of material from thousands of MIT courses, covering the entire MIT curriculum.. No enrollment or registration. The first part of the course will focus on understanding the most important financial statements, namely, the balance sheet, the income statement, and the statement of cash flows. [MUSIC]. Next time, we will start looking at the various types of ratios within each category of financial ratios. Statement of Cash Flows The typical tools used in financial statement analysis are comparative analysis, common size analysis, and ratio analysis. 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. Finally, valuation ratios compare the current market price of a company stock to certain items from the financial statements. Liquidity ratios, on the other hand, measure if a company has enough cash to meet its shutdown financial obligations. endstream endobj startxref The preparation of financial statement is required in order to achieve the objectives of the firm as a whole. 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 Course’Outline’ ’!"6"!" Find materials for this course in the pages linked along the left. 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. This is one of over 2,200 courses on OCW. Support!Systems$ Student Counseling Services (SCS) - (213) 740-7711 – 24/7 on call Financial ratios, a reading prepared by Pamela Peterson Drake 3 3. 192 0 obj <>/Filter/FlateDecode/ID[<88C4CB1B5452FF4D989428B3448428CD>]/Index[166 48]/Info 165 0 R/Length 123/Prev 195341/Root 167 0 R/Size 214/Type/XRef/W[1 3 1]>>stream Course description. To view this video please enable JavaScript, and consider upgrading to a web browser that. 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. 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� ��(� Knowledgeable instructor: I have a Bachelor’s degree in accounting and finance. No material is needed for the course, except writing materials if the student wishes to take notes. advanced overview of financial statements analysis. The financial statement in which accountants summarize and report asset value is the balance sheet. This course is designed to provide this vital understanding. Financial analysis nuides the companies about their future course of acton and the directon that any partcular company should move on.Financial Analysis and reportnn is an intenral part of overall fnancial analysis carried out by various business ornanizatons in India and all around the world. Audience Once these concepts have been explained, participants learn how to analyze the financial statements using analytical tools from different user perspectives. Profitability ratios measure a company's ability to generate profits from its various resources. Financial reporting refers to the document that specifies and releases the financial statement and other information to its stakeholders and other public. MIT OpenCourseWare is a free & open publication of material from thousands of MIT courses, covering the entire MIT curriculum.. No enrollment or registration. Financial analysis guides the companies about their future course of action and the direction that any particular company should move on.Financial Analysis and reporting is an integral part of overall financial analysis carried out by various business organizations in India and all around the world. This course brings together the key elements of financial statement analysis. finance course. Horizontal Analysis. Financial ratios largely fall into five different categories namely, profitability ratios, activity ratios, solvency ratios, liquidity ratios and valuation ratios. Financial reporting refers to the document that specifies and releases the financial statement and other information to its stakeholders and other public. If you already have a grasp ... financial statements try to capture operating performance over the fixed period of a year. . The period can be a quarter (if it is a quarterly income statement) or a year (if it is an annual report). Is that good or bad? This course increase knowledge and skill of accounting and finance and full knowledge of accounting and finance\n\nThank you coursera. Find materials for this course in the pages linked along the left. Academia.edu is a platform for academics to share research papers. To answer this question, we will look at a number of financial ratios. HORIZONTAL ANALYSIS OF RETAINED EARNINGS STATEMENT QUALITY DEPARTMENT STORE INC. Welcome! Academia.edu is a platform for academics to share research papers. Q��Q R�;�t.��`Y�)6��H2��ے$���b`���������� 4jx For example, this could mean that a common size income statement would report all income statement items as a percentage of revenues. It is often said that the balance sheet is a static financial snapshot taken at the end of the year (To read more, see What is a Cash Flow Statement? 0 This program provides the skills and training necessary to be a complete financial analyst. Instructors were give their best to teach each point very deeply. To view this video please enable JavaScript, and consider upgrading to a web browser that Time-series analysis is the comparison of a firm with itself over time. hެXkO[I�+�1�*{���FH�À&Q`'3su?8pC�56�������j��^!�C����ouU�SU6�)�L���1(cƨ��_I�z�1+K�RT�ZY���.����{. This includes the concept of time value of money, discounting cash flows, and capital budgeting. Financial Statement Analysis is an applied perspective on analyzing financial statements. The cash flow statement is, fundamentally, free from any accounting judgement/manipulation and could be used as trustworthy source for analysis. If you have not covered this material – or do not remember much about it – you may want to go back and read about financial 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. 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 the company's future operations, investments and finances. 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 … Ratio analysis evaluates the relationship between two or more economically important items. Accounting and Finance for IT professionals, Business Technology Management Specialization, Construction Engineering and Management Certificate, Machine Learning for Analytics Certificate, Innovation Management & Entrepreneurship Certificate, Sustainabaility and Development Certificate, Spatial Data Analysis and Visualization Certificate, Master's of Innovation & Entrepreneurship. This four-module financial analysis course demonstrates how you can perform a comprehensive financial analysis of any organization using a variety of ratios derived from its financial statements. I have years of equity research experience where I have provided detailed financial statement analysis services to many blue chip hedge funds. A financial leverage ratio provides information on the degree of a company's fixed financing obligations and its ability to satisfy these financing obligations. After completing this module you will be able to calculate the key financial ratios. Welcome! ACCT!581:!Financial!Statement!Analysis! 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. 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. The purpose of this module is to equip you with the skills required to identify accounting information required for building trading strategies. Financial analysis of a company may be performed for a variety of reasons, such as valuing equity securities, assessing credit risk, conducting due diligence related to an acquisition, or assessing a subsidiary’s performance. EXERCISE 6: FINANCIAL STATEMENT ANALYSIS Below is the income statement and balance sheet of Taqiu Sdn Bhd. Benchmark comparison is the use of pre-specified industry norms or benchmarks. 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. Financial statement reporting and analysis are two different things but of the same background. The course will also introduce the idea of real options, how they affect a project’s NPV, and their impact of the decision to accept/reject a project. 4. This course explores in greater depth financial reporting from the perspective of financial statement users. Support!Systems$ Student Counseling Services (SCS) - (213) 740-7711 – 24/7 on call First, there are the fixed assets , which include the long-term assets of the firm, such as plant, equipment, land and buildings. Section 3 provides a description of analytical tools and techniques. Section 4 explains how to compute, analyze, and interpret common financial ratios. 166 0 obj <> endobj To examine how asset value is measured, let us begin with the way assets are categorized in the balance sheet. Lectures on concepts will be supplemented with numerical examples. 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. Are as follows different tools used in financial statement analysis the current market price of a company depth reporting... Questions that are explained in a way that 's easy for you understand. Capital budgeting for financial statements using analytical tools from different user perspectives its! Are explained in a way that 's easy for you to understand specifies and releases the financial is. Profitability ratios, a reading prepared by Pamela Peterson Drake 3 3 and its ability to its... 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