Financial Statement Analysis Workshop

In today’s world, finance professionals are challenged with providing management a detailed analysis of the impact of the organization's financial decisions. Therefore, finance professionals need to be skilled at reading through the numbers on the financial statements, analyzing the figures, interpreting the various ratios and presenting this analysis in a dynamic manner. This course takes you from the first step of understanding the relationships between the different elements of financial statements, through calculating and analyzing the financial ratios to the last step of presenting recommendations. While applying Excel tools and techniques, various real-life examples of published financial statements will be used throughout the course.

Course Methodology

This course demonstrates theoretical core topics in addition to introducing Excel’s ability to perform various types of financial analysis. The course also features the use of a number of real-life case studies and presentations by participants followed by discussions. ​

Course Objectives

• By the end of the course, participants will be able to:
• Apply the framework of financial statements analysis
• Use ratio and financial analysis
• Interpret company financials and industry position
• Appraise the process of company evaluation and analysis
• Analyze real-life financial statements from companies traded on the world and 'GCC' stock exchanges
• Prepare financial analysis template models

Target Audience

Professionals in the field of finance and accounting, financial analysts, department heads, senior management team members, financial controllers, finance managers, and chief and financial accountants who perform business analysis and provide financial recommendations.

Target Competencies

• Understanding audited financials and annual reports
• Performing vertical analysis
• Practicing horizontal analysis
• Understanding and performing liquidity analysis
• Understanding and performing activity efficiency analysis
• Understanding and performing solvency analysis
• Understanding and performing profitability analysis

Course Outline

Required components of financial statement analysis

• Role of financial reporting and analysis
• Core financial statements and the importance of the annual report
• The important role of notes and supplementary information
• Objectives of financial statements audit
• Types of audits
• Financial statement analysis framework
• The accounting cycles
• Financial reporting mechanics
• Relationship, elements and classification of financial statements

Financial reporting standards

• Importance of reporting standards in security analysis and valuation
• The standards setting bodies
• International Financial Reporting Standards (IFRS) versus Generally Accepted Accounting Principles (GAAP)

An inside look at financial statements

• Income statement components
• The three important components of income statements
• Revenue and expense recognition
• Balance sheet components
  • Measurement and classification
  • The five important components of a balance sheet
• Statement of changes in owners’ equity
• Cash flow statement:
  • Operating, investing, and financing activities
  • Direct versus indirect methods in cash flow preparation
  • Reading and interpreting cash flow
  • The cash rich standard
• Mechanisms of financial analysis techniques
  • Vertical analysis and strategy: balance sheet and income statement approaches
  • Horizontal, trend analysis and growth
  • Liquidity analysis:

• Current, quick, and cash ratios, defensive interval and cash conversion cycle

• Asset management and activity ratios:

• Total and fixed assets turnover

• Solvency analysis:

• Debt, equity, and times interest earned ratios

• Profitability analysis:

• Profit margin, gross margin, return on assets, return on equity

• Market and valuation:

• Price earnings and earnings-per-share ratios

• DuPont analysis: the three-step and five-step models
• Limitation of ratio analysis

Financial statement analysis: applications and presentations

• Evaluating a company’s past performance
• Comprehensive real-life analysis of publicly traded companies

Participants must bring their Laptops