Program overview
This two-day course 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 a highly interactive workshop and a case study will be used to illustrate key learning points.
This two-day course would give opportunities to participants to practice the key learning points on various case studies.
On successful implementation of learning points of case studies would sharpen the skills of participants in evaluating the financial position and performance of a corporate/business.
Program objectives
At the end of the program the participants will learn:
- 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 and key notes to the accounts
- The distinction between cash flow and profits
- How to measure liquidity, solvency, profitability and activity performance using appropriate ratios.
- Glossary of common financial terminologies
Course Outline
Financial Statements
- Sources and quality of disclosure
- Key accounting concepts and principles
- IFRS in presentation of company financial statements focusing on the key statements needed for financial analysis:
- Statement of financial position,
- Statement of comprehensive income
- Cash flow statement
- Statement of changes in equity
- Auditors’ Notes to the accounts
- Auditors’ report – Qualified/unqualified
Cash flow analysis
- Operating activities, Investing activities and Financing activities
- Cash flow from operations before working capital changes- its importance
- What is diversion of funds
- Identifying diversion of funds
- Internal vs External diversion
- Correction steps in case of internal and external diversion.
- Relationship between financial ratios and cash flows
Financial Analysis
- Accounting for revenue and expenses
- Capitalized expenses
- Profit, EBITDA, and Funds from Operations
- The meaning of net working capital
- Fixed assets, Intangible assets
- Depreciation, amortization, depletion
- Provisions
- Equity and reserves; revaluation reserves, retained earnings, dividend payments.
- Spontaneous finance from suppliers
- Short term and long term borrowings
- Off balance sheet and contingent liabilities
Ration Analysis & Implication
- Ratios to assess the liquidity of the business
- Ratios to assess the solvency of the business
- Ratios to measure the financial performance
- Ratios and cash flow measures to assess the efficient use of existing assets
- Debt service
- Ratios to assess the capital structure and debt service capability
- Application: calculate a debt service coverage ratio
Final Case study
The case study will allow participants to apply all the tools of financial analysis to a company to make a balanced assessment of its operational performance and funding structure.
Course Materials
It is very important to analyze the need for Training along with the level of knowledge you require. This session give you a liberty to choose the modules you need, discuss it with the trainer how you want to be delivered, decide the place at your convenience and allocate number of hours to solve your problem. This does not include any development as a consulting but will include solution if you are facing a particular problem.
