Analyzing Financial Statements and Accounting With GFMI
A fundamental understanding of financial statements, including balance sheets, income statements, and cash flow statements, as well as the relevant ratios to calculate and analyze, are crucial factors in determining the future health of an organization. The topic of financial statement analysis and accounting covers the fundamentals, including finance for the non-financial manager, introduction to financial statements, ratio analysis, and financial modeling.
The GFMI Financial Statement Analysis Course
At GFMI, we offer a full suite of financial statement analysis and accounting courses. The following is an example from our current financial statement analysis course curriculum.
Our interactive Financial Statement Analysis Course was designed to introduce participants to key financial statement analysis terminology and the uses of financial ratios by different stakeholders. This course is comprised of a lecture, an exercise in analyzing credit and equity reports, and case studies.
By the end of this course, students will be able to:
- Explain who uses financial statements and why
- Compare financial statements of different companies and the same company across different time periods
- Appreciate the qualitative and quantitative approaches to analyzing financial statements
- Discuss the role of the auditor and the various opinions available
- Describe the purpose and framework for analyzing financial statements:
- Balance Sheet
- Income Statement
- Cash Flow Statement
- Recognize the importance and pitfalls of ratio analysis
- Explain the importance of the Management Discussion & Analysis (MD&A) and financial statement footnotes
Program Level: Foundational
Advance Preparation: Equity and credit reports on select companies
Recommended CPE Credits: 14
This course is broken down into six separate sessions with a coordinating exercise or case study for each session.
- Session 1: The Users of Financial Statements will describe different market participants who analyze companies’ financials, examine general and business risks and identify where we are in the credit cycle, recognize the goal of analyzing financial statements and identify the roles of internal auditors and outside regulatory bodies.
- Session 2: The Income Statement examines the key components of the income statement and what they are designed to measure. This session will define the income statement, interpret revenue, explain various expenses, discuss revenue projections and highlight their merits and pitfalls.
- Session 3: The Balance Sheet covers the key components of the balance sheet and what they were designed to measure. In addition to defining the balance sheet, this session will identify assets as resources, liabilities as IOUs, as well as owners’/shareholders’ equity as net worth, and recognize the importance of working capital and liquidity.
- Session 4: The Statement of Cash Flows examines the key components of the statement of cash flows and what they are designed to measure. The three sections of the statement of cash flows are defined and its relationship to other financial statements will also be discussed.
- Session 5: Ratio Analysis will define the purpose and pitfalls of financial ratios, as well as the calculations for key ratios. A demonstration of how financial statements and ratios are used to assess a company’s performance will be given.
- In the final course session, Session 6: The Importance of Creative Accounting and the MD&A, participants will learn how to distinguish between accounting manipulation and fraud, and identify possible sources of financial statement manipulation. Risk assessment using a company’s 10K will be reviewed with particular emphasis on potential red flags.