Financial Statement Analysis

3 days 9-11 Oct 2017, Singapore Singapore $4,490.00 Download brochure Add to basket

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Are you financially literate?
Whether assessing current performance, developing Key Performance Indicators (KPIs) or simply developing a forecast budget, do you understand the story behind your company’s financials? Can you read the warning signs or identify when and where numbers don’t make sense? How does your business compare to its competitors, shareholders, employees and other stakeholders? Is there an expectation gap? Increase your financial literacy: become an effective manager as you understand how your business is viewed and learn how to sway perception rather than react to perceived shortfalls.

This programme reviews the content and purpose of the three fundamental financial statements, the Income Statement, the Balance Sheet and the Cash Flow Statement. Through various hands-on class exercises and discussions, the interplay between each is demonstrated and highlights why good financial statement analysis takes time. Attendees are also encouraged to use Excel to undertake analytical exercises, such as capex smoothing, ratio analysis and breakeven analysis.

Key benefits

  • Understand the intent of the Income Statement, Balance Sheet and Cash Flow Statement and how the statements link together through the concept of control accounts
  • Recognise alternative layouts for financial statements
  • Learn some of the key differences between the two main accounting regimes, namely International Financial Reporting Standards (IFRS) and US Generally Accepted Accounting Principles (US GAAP)
  • Understand the importance of ratio analysis for assessing profitability, liquidity and gearing
  • Develop an analytical toolkit to assist financial statement interpretation
  • Understand how analysis may affect valuations

Who should attend

Aimed at both new and experienced analysts, accountants and managers, this course provides attendees with analytical tools required to support more informed corporate finance, operational and strategic decisions in a timely, quantitative manner.


We work with a series of expert instructors, please select the course location of interest to review the credentials of who will be delivering the programme.

Dr. Liam Bastick

The Course Director has over 25 years’ experience in financial model development/auditing, valuations, M&A, strategy, training and consultancy. He has considerable experience in many different sectors (e.g. banking, energy, financial services, media, mining, oil and gas, transport and utilities).

He has headed Ernst & Young’s modelling team in Melbourne and was an Assistant Director in their strategy team in London. He was also a senior member of the UK Post Office’s M&A and strategy teams.

He has worked in the UK, Australia, Denmark, France, Belgium, Germany, Hong Kong, Indonesia, Malaysia, the Netherlands, New Zealand, Pakistan and Switzerland, with many internationally recognised clients, constructing and reviewing strategic and operational models for many high profile IPOs, LBOs and strategic assignments.

He is a regular contributor to the Institute of Chartered Accountants in Australia (ICAA), Certified Practising Accountants Australia (CPAA), the Chartered Institute of Management Accountants (CIMA), Finance 3.0 and various LinkedIn specialist discussion groups. He regularly presents at various accounting and finance conferences and writes a monthly Excel article for CIMA’s Insight magazine with a circulation of c.170,000.

He is a Fellow of the Institute of Chartered Accountants in England and Wales (ICAEW), a Fellow of the Institute of Chartered Management Accountants (CIMA) and is a professional mathematician specialising in probability, simulations and real options based problems.

Furthermore, he has recently been recognised by Microsoft as a Most Valuable Professional (MVP) for MS Excel for his expertise, experience and training in this area.




4-5 Star Hotel in Singapore

All of our courses are held in 4 – 5 star hotels, chosen for their location, facilities and level of service. You can be assured of a comfortable, convenient learning environment throughout the duration of the course.

Due to the variation in delegate numbers, we will send confirmation of the venue to you approximately 2 weeks before the start of the course. Course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.

Related Courses



Do you have five or more people interested in attending this course? Do you want to tailor it to meet your company's exact requirements? If you'd like to do either of these, we can bring this course to your company's office. You could even save up to 50% on the cost of sending delegates to a public course.

To find out more about running this course in-house:

Our Tailored Learning Offering

If you want to run this course at a location convenient to you or if you want a completely customised learning solution, we can help.

We produce learning solutions that are completely unique to your business. We'll guide you through the whole process, from the initial consultancy to evaluating the success of the full learning experience. Our learning specialists ensure you get the maximum return on your training investment.


We can offer any of our public courses delivered at your office or we can devise completely tailored solutions:

Read more about our offering or complete a call back request to speak to a learning specialist.



Day 1

Getting the Basics Right

  • Cash versus accrual: Understanding the rationales and reasons behind the two approaches
  • Purpose of financial reporting / financial statements
  • Key stakeholder expectations: Who are the stakeholders? Who are key? What do they require?

Three key financial statements:

  • Income Statement: reporting net operating profit for a period
  • Balance Sheet: statement of financial position at a point in time; understanding the key why cumulative summary and historical cost approaches cause problems for preparers and users of financial statements alike
  • Cash Flow Statement: why what was originally called Note 1 to the accounts became more important and how it is split for reporting purposes, i.e. operating, investing and financing

Discussion: What goes where and why?

  • Using control accounts properly

Exercise: Working with common control accounts

  • What three-way integration means
  • Correct linking: why only two links are required and the two different ways then may be applied

Exercise: Understanding how linking financial statements causes modelling to be undertaken in a certain way

How US GAAP differs from IFRS

  • Prescriptive Pronouncements vs. Conceptual Framework
  • Consolidations
  • Intangible assets
  • Inventory
  • Write-downs, etc.

Interim vs. annual reporting

Income Statement in Perspective

  • Understanding why the Income Statement order is important

Discussion: Rationalising the order, how we think, classification of costs

  • Identifying the Key Performance Indicators of a business: why the Income Statement is so important
  • Why the Income Statement is insufficient

Discussion: Understanding what is missing; identifying sustainable earnings

Key elements:

  • Revenue recognition
  • Direct vs. indirect costs
  • Cost allocation issues

Example: Using Activity Based Costing to understand profitability

  • Understanding depreciation

Exercise: Modelling / ratifying depreciation

Exercise: Why capital expenditure needs to be understood to understand the future

  • Segmental reporting (geography / operations): how this can help with forecasting
  • Foreign investments and currency considerations

Cash Flow in Perspective

  • Understanding Operating, Investing and Financing Activities

Discussion: Classifying activities correctly

  • Common errors in cashflow modelling: incorrect classifications, using an Indirect approach unnecessarily, including non-cash items
  • Importance of Cash Flow: overtrading and cash flow management
  • Difference between the audited Cash Flow Statement and the Cash Waterfall

Example: Simple reordering exercise

  • Principle of no net-off: why cash flow items in particular should be shown gross

Exercise: Smoothing out capital expenditure for normalisation purposes

  • Importance of periodicity
  • Key purpose of Cash Flow Statement: cash is cash is cash

Balance Sheet

  • How the Balance Sheet should be used: using it as a forecasting tool, assessing risks, understanding concerns of stakeholders
  • Control vs. ownership: why US GAAP makes this harder to understand

Exercise: Reordering the Balance Sheet for greater comprehension

  • Fair value considerations
  • Working capital in the financial statements

Exercise: Calculating the working capital cycle

  • Understanding assets, liabilities and equity
    - Current and non-current considerations
    - Inventory management
    - Liability recognition, e.g. pensions (deferred benefit schemes)
    - Offsetting
  • Recognising window dressing
  • Financial instruments: debt vs. equity
    - Differentiating between debt and equity: accounting guidelines
    - Recognising and understanding the consequences of off-Balance Sheet financial financing

Examples: Debt or equity? Brief examples for deliberation 

Day 2

Opportunity for attendees to raise any issues considered overnight

Other Documents

  • Other financial statements
    - Statement of Comprehensive Income
    - Changes to Equity
    - Directors’ report
    - Management accounting / budgets

Discussion: When to use which?

Analysing financials

  • Why methodology is important: experience helps, but you can generate a checklist

Exercise: Brainstorming ideas for a checklist

  • How important is history? How much history?
    - Identifying trends and disturbing factors
    - Looking out for additions, changes in ownership and discontinued operations
  • Being objective in forecasting when using historical data

Exercise: Objective forecasting using Excel

Ratio Analysis

  • Ratio analysis
    - Profitability, growth, liquidity, solvency, gearing and investor ratios
    - Debt Service Coverage Ratios and Interest Coverage Ratios

Exercise: Basic example to show importance of ratios

Further Example: Interpreting accounts using ratio analysis

Past Exam Question: Interpreting ratios

Further Analysis

  • Importance of Notes to the Accounts
  • Danger signals
    - Overtrading: when profits increase too quickly
    - Working capital cycle: out of kilter with history, industry or Net Assets
    - Business lifecycle indicators
    - SWOT and PESTLE analyses
    - Insolvency
    - Inventory considerations: asset turnover, risk of obsolescence
    - Operating and financial leverage issues
  • Variance analysis (efficiency vs. effectiveness, operational vs. planning)

Example: Detailed versus high level variance analysis

  • What financials may not tell you (e.g. cyclicality, seasonality, confidentiality)
  • Sensitivity and scenario analysis: understanding the underlying key drivers and their impact on key outputs
  • Is financing information important? (Leading into valuation discussion later)

Example: Applying theory in practice. Example to analyse some of the issues facing a company from its Report and Accounts.

Further Application

  • Understanding equity and enterprise valuations

Exercise: Creating a free cash flow from the cash flow statement

  • How statements are used for various valuation techniques:
    - Net Present Value

Exercise: Creating a discounted cash flow statement 

            - Future Sustainable Earnings vs. Maintainable Earnings revisited 
            - Earnings Multiples 
            - Economic Value Added (identifying what NOPAT is) 
            - Fair Value of Identifiable Net Assets 
            - Dividend Discount Model

Q&A session and Wrap-Up

Why us

We have a combined experience of over 60 years providing learning solutions to the world’s major organisations and are privileged to have contributed to their success. We view our clients as partners and focus on understanding the needs of each organisation we work with to tailor learning solutions to specific requirements.

We are proud of our record of customer satisfaction. Here is why you should choose us to help you achieve your goals and accelerate your career:

  • Quality – our clients consistently rate our performance ‘excellent’ or ‘outstanding’. Our average overall score awarded to us by our clients is nine out of ten.
  • Track record – we have delivered training solutions for 95% of worlds’ top 100 banks and have trained over 250,000 professionals.
  • Knowledge – our 150 strong team of industry specialist trainers are world leading financial leaders and commentators, ensuring our knowledge base is second to none.
  • Reliability – if we promise it, we deliver it. We have delivered over 20,000 events both in person and online, using simultaneous translation to delegates from over 180 countries.
  • Recognition – we are accredited by the British Accreditation Council and the CPD Certification Service. In an independent review by Feefo we scored 96% on service and 95% on product