Course Code: 531

Duration: 1 day

Level: Basic

Fee: $795.00

Instructor: Douglas Carroll

CPE Credits: 7

Prerequisite: No Prerequisite Required.

This one-day seminar provides an intensive introduction to the tools and techniques used in financial statement analysis. The program begins with a discussion of the major financial statements (balance sheet, income statement and cash flow statement) and their relative importance and roles in assessing company operating performance and financial condition.

The presentation will then turn to a discussion of techniques used to evaluate firms' operations or financing and for identifying issues that deserve fuller investigation. Analytically recast financial statements and financial ratios will be computed from recent corporate annul reports. These tools will be used in conjunction with a dissection of the accounting numbers to gain insight into company profitability, leverage, liquidity, efficiency and more.

Emphasis will be on interpreting the financial statement numbers and financial ratios as a means to gaining insight into the state of the firms' business. This program will be beneficial to anyone whose professional endeavors require the ability to read and interpret financial statements.

This program would be especially helpful to those beginning a career in securities trading, sales or portfolio management or beginning to mid career professionals in departments supporting those activities such as clearance and settlement, compliance, financial control and information technology.

Financial Statements and Analytic Tools

•  Construction and General Considerations
•  How the Various Statements Relate to each other
•  Related Disclosures and Issues

•  Common Sized Statements
•  Trend Statements
•  Ratio Analysis

Income: Measurement and Interpretation

•  Determination of Profits - Residual of Accrued Revenues and Expenses
•  Accounting Profits Versus Economic Profits
•  Revenues - Sources and Trends over Time
•  Expenses
  • Fixed Versus Variable 
  • Product Versus Period
    

•  Other Sources of Income or Gains

Operations, Profitability and Return on Investment

•  Financial Ratios
  • Liquidity
  • Leverage
  • Efficiency
  • Profitability
  • Return

•  Profitability Analysis
  • Gross 
  • Operating 
  • Net Margins
    

•  Cash Flow Versus Profits
•  Return Calculations
  • Return on Investment (ROI)
  • Return on Assets (ROA)
  • Return on Equity (ROE)

•  Dupont Method - Disaggregating

Please bring a calculator.

After completing this program participants should be able to:

• Discuss the basics of the primary financial statements (balance sheets, income statements and cash flow statements): purpose, structure and basis of presentation
• Distinguish between cash flow and earnings, as well as explain reasons for possible divergences in the short or long run and their use in securities analysis
• Describe the various measures of profitability and the factors that contribute to their expansion or contraction
• Recognize sources of operating and financial leverage and discuss the impact risk and earnings forecasts
• Discuss revenue and earnings forecasts and their use in valuation models
• Describe the use of financial statement data and financial ratios in equity securities valuation and analysis