This course is ideal for anyone in your financial institution who must be able to understand and assess accrual-based financial statements-explores fundamental accounting and cash flow concepts from a lender’s perspective.
Learning Objectives
At the end of this session, participants..
Start Date:
12 March, 2025.
End Date:
14 March, 2025.
This course is ideal for anyone in your financial institution who must be able to understand and assess accrual-based financial statements-explores fundamental accounting and cash flow concepts from a lender’s perspective.
Learning Objectives
- At the end of this session, participants will be able to
- Analyze a firm’s financial statements when undertaking corporate valuations, including how to derive underlying earnings and cashflow
- Prepare Ratio analysis, including profitability, performance, leverage, liquidity, returns to firm and equity
- Conduct valuation of debt, financial assets, quasi-debt, provisions, deferred taxes, off balance sheet liabilities and other factors
Day 1
- Dealing with the fundamentals
- Introduction to financial analysis
- Identifying the relationship between cash flow and profit
- Development of an integrated cash flow model
- Recognizing it’s all about cash
- Understanding the relationships between the three main accounting statements
- Fundamentals of accounting statements-the profit and loss account
- How the PandL has changed over the last 25 years
- Detailed review of the Profit and Loss account including explanation of all significant accounting terminology
- Profit types - trading, asset and business
- Inventory, depreciation, capitalized interest
- Minority interests and consolidation
- Exceptional and material items
- Fundamentals of accounting statements-the balance sheet
- Detailed review of the balance sheet including explanation of all significant accounting terminology
- Understanding the fixed assets note
- Accounting goodwill -what is it?
- Liabilities, pension fund accounting
- Debt and other liabilities like debt
- Deferred tax, contingent liabilities
- Financial analysis techniques-ratio analysis
- Objectives of ratio analysis
- Developing ratio analysis skills
- Different types of ratios
- How much information is there in ratios?
- Ratio rules - avoiding errors of principle
- Uses of ratios
Day 2
- Cash flow analysis and accounting issues
- Understanding cash flows
- Detailed review of the cash flow statement
- Analyzing and interpreting cash flows
- Summarizing cash flows for analysis
- Cash flow analysis
- The four phases in the life of a business
- Cash flow analysis-taking it further
- Dealing with the consequences of growth and no-growth
- Accounting abuses and update
- Abuses of Fair Accounting
- Basic abuses relevant to all businesses
- More complex abuses relevant to larger groups
- Global accounting in the new century
- Overview of the International Accounting Standards Board
- The implications of the IFRS
Day 3
- Financial mathematics and project analysis
- The time value of money
- Present and future values
- Defining the discount factor
- Net present value -developing the concept
- NPV’s and varying future cash flows
- Perpetuities and annuities
- Project analysis
- Introduction to project analysis
- Developing a forecast of the project cash flows
- Identifying the key risk areas
- Evaluating capital investment projects
- Discounted cash flow techniques
- Calculating the internal rate of return
- The responsibilities of management
- The essential aspects of the management task
- Costing and break-even analysis
- Fixed and variable costs
- Marginal, absorption and standard costing
