Developing modern financial analysis skills
Introduction to financial analysis
- Identifying the relationship between cash flow and profit
- Development of an integrated cash flow model
- Understanding the relationships between the three main accounting statements
Exercises - Accounting terminology exercise.
Fundamentals of accounting statements
The profit & loss account
- Stocks, depreciation, capitalised interest
- Material items and layout abuse
- Detailed review of the profit and loss account including explanation of all significant accounting terminology
Case study - Example of layout abuse.
Fundamentals of accounting statements
The balance sheet
- The fixed assets note, liabilities
- Deferred tax, contingent liabilities and goodwill
- Detailed review of the balance sheet including explanation of all significant accounting terminology
Financial analysis techniques - ratio analysis
- Objectives of ratio analysis
- Developing ratio analysis skills
- Defining the twelve key ratios
Case study - Ratio calculation - delegates calculate ratios for a leading UK retail group.
Overview of global accounting in the new century
- The history of international accounting
- Current international accounting approaches
- The major issues in international accounting
- The implications of the IAS Initiative
- Currently contentious accounting issues
Mini case - Consequences of different GAAPs on reporting.
Cash flow analysis, accounting issues, and project analysis
Understanding cash flows
- Detailed review of the cash flow statement
- Analysing and interpreting cash flows
- Summarising cash flows for analysis
Case study - Summarising cash flows - delegates summarise cash flows for analysis purposes.
Cash flow analysis
Case study - Examining patterns of cash flows - delegates match cash flows to sectors.
Case study - Growth & no-growth cash flows - delegates restate cash flows to improve their understanding of performance.
Case study - Delegates summarise and evaluate the cash flows of this high-tech company.
Accounting abuses and updates
- Abuses of fair accounting
- Basic abuses relevant to all businesses
- More complex abuses relevant to larger groups
- An update on recent developments in accounting
Case study - Delegates identify numerous accounting abuses in a set of conglomerate accounts.
Evaluating capital investment project
- Introduction to capital budgeting
- Discounted cash flow techniques
- Calculating the internal rate of return
Case study - Speculative housing project - delegates perform investment appraisals to decide whether to proceed with a capital investment.
Case study - Eight projects - delegates evaluate a number of projects and decide which projects should be pursued and which rejected.
Credit analysis and strategy analysis
- The relationship between business risk and financial risk
- The four phases of the corporate life-cycle
- Identifying appropriate funding structures
- Recognising the drivers of funding strategies
Credit analysis - the basic concept
- Introducing credit analysis frameworks
- Financial analysis - review of the issues
- Non-financial analysis developing a framework
Economic and country risk
- Understanding the indicators and signals
- Implications of macro-economic change for investors, banks and businesses
Overview of non-financial analysis
- Strategy analysis
- What is strategy?
- Overview of strategy terminology and concepts
Exercises - Strategy concepts multiple choice.
Techniques for corporate assessment
- A pyramid model for strategy evaluation
- SWOT/Environmental analysis
- Porters five forces
- Boston portfolio matrix
- Environments matrix
Exercises - Strategy evaluation techniques multiple choice.
Mini case studies - strategy analysis
Mini case studies - Major airline strategy change.