What’s the current worth of investment made in the business so far? How strong is the actual financial position of the company’s operations? Can shareholders, investors and financiers develop a confidence or still hold their confidence in the business?
The trusted answers to the above questions come from the financial analysis reports that are detailed and authentic. And for these, the financial reports will highlight the strengths, the weaknesses and communicate the financial health of the business.
This training will help the delegates to understand:
- The total process of financial analysis
- Make informed opinions on how to grow the business
- Use the financial analysis information to attract the interest of investors, when that is relevant for the business
- Value the price or worth of the company’s stock if that is desirable.
Introduction – Assembling Financial Information
- A description of the business
- Benefits of a Financial Report
- A financial fundamental – the Balance Sheet
- A financial fundamental – the Income & Expenditure Statement
- A financial fundamental – the Cash Flow Position
Analysis of Financial Statements
- State of the Balance Sheet
- Current Assets
- Non-Current Assets
- Net Worth
- Analysis of the Income Statement (P&L)
- Size of Revenue
- Cost of Goods Sold
- Operating Expenses
- Gross Profit (Operating Income)
- Cash Flow Analysis
- Cash Flow from Operations
- Cash Flow from Investments
- Cash Flow from Equity and Other Investments
- Diagnosis – Opinions on the Organization’s Performance Status.
- Profitability Ratios
- Liquidity Ratios
- Activity Ratios
- Gearing Ratios
- ROI Ratios.
Analysis of Capital Expenditure
- Capital Expenditures and Depreciation
- Capital Expenditures and Incomes.
Assessment of Control Systems
- The Internal Control System – Preventive, Detective and Directive
- Evaluating Operational Efficiency
- Cash, Cheques and Transfer payments
- State of bank reconciliation
- Stock and inventories
- Fixed Assets.
Analysis of Financial Risks
- Pervasive risk factors
- Detecting risk of misstatement
- Control risk – failure or total absence
- Information technology risks
- Risk assessment and rankings
- Conflicts of interest issues
- Contingent financial liabilities
- Legal liabilities
- Determining the controls to mitigate risks
- Documenting the Financial Risks.
Valuation of the Business
- Different approaches to Valuation
- Discounted cash flow valuation
- No-growth or Zero-growth valuation model
- Constant growth valuation model
- Expected return common stock
- One stage Dividend Discount Model
- Two stage Dividend Discount Model
- Three stage Dividend Discount Model
- Relative Value Analysis
- Key Financial Ratio Relative to Competitors.
- The Organization’s Financial Performance
- Financial Policies and Controls
- Tax Management
- Financial Strengths and Weaknesses.