Financial Statement Analysis: An Introduction

• Role of Financial Reporting and Analysis
• The Core Financial Statements and the Importance of the Annual Report
• The Important Role of Notes and Supplementary Information
• Objective and Types of Audits of Financial Statements
• Financial Statement Analysis Framework
• 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 versus Generally Accepted Accounting Principles
• The Role of the CFA in Financial Analysis

Understanding Financial Statements

• Income Statement Components
• Revenue and Expense Recognition
• Balance Sheet Components:
  • Measurement and Classification
• Cash Flow Statement:
• Operating, Investing, and Financing Activities
• Direct versus Indirect Methods in Cash Flow Preparation

Financial Analysis Techniques

• Ratio Analysis:
  • Liquidity: Current, Quick, and Cash Ratios
  • Asset Management and Activity Ratios
  • Solvency: Debt, Equity, and Times Interest Earned Ratios
  • Profitability: Profit Margin, Gross Margin, Return on Assets, Return on Equity
  • Market and Valuation: Price-Earnings and Earnings Per Share Ratios
• Vertical Analysis and Strategy: Balance Sheet and Income Statement Approaches
• Trend Analysis and Growth
• DuPont Analysis: The Three-Step and Five-Step Models
• Segment Analysis
• Time-Series and Cross-Sectional Analysis
• Financial Reporting Quality and Red Flags
• Free Cash Flow Calculation
• Building Integrated Financial Analysis Model
• Performing What-If Analysis
• Limitation of Ratio Analysis

Financial Statement Analysis: Applications and Presentations

• Evaluating a Company’s Past Performance
• Preparing a Projection of a Company’s Future Net Income and Cash Flow
• Comprehensive Real-Life Analysis of Publicly Traded Companies