Course Overview

The purpose of this advanced program is to provide you with an analytical framework and practical tools to analyse and exploit information in corporate financial statements. The program demonstrates and applies this analytical framework and a wide array of practical tools in order to emphasise the use of financial accounting information in equity valuation and other financial decision-making contexts. We will also examine the issues that corporate managers face as they design and implement financial reporting strategies, increasing your abilities to detect and undo the effects of earnings management. The framework and tools developed in this program are intended to enhance your analytical skills if you are interested in using financial statements in decision-making, particularly equity valuation.

Course Objectives

The program consists of the following three integrated parts

Ìø‰Û_åá Financial Statement Information: Enhance your understanding of the accounting information contained in company annual reports.

Ìø‰Û_åá Analysis: Deepen your ability to analyse how financial statement information captures and reflects the critical factors of risk and success in the competitive environment and strategy of firms.

Ìø‰Û_åá Accounting-based Valuation: Learn and apply a variety of state-of-the-art accounting-based valuation techniques.


Who Should Attend

Delegates from all sectors who have a need to understand financial analysis and International Financial reporting Standards (IFRS) in order to improve their own knowledgeand to benefit their area of responsibility within the organization.

Course Content

DAY ONE: A Framework for Business Analysis and Valuation using Financial Statement Information – Fundamental Analysis

Ìø‰Û_åá The framework and hierarchy of financial analysis; operating , financial , and investment analysis

Ìø‰Û_åá Economic consequences of accounting numbers, thorough analysis of the information content of the Income statement, balance sheet, Cash flow statement.

Ìø‰Û_åá Introduction to the use of accounting numbers in valuation and credit decisions, the effect of operating cash flow and earnings per share on company value

Ìø‰Û_åá Evidence on the impact of earnings on stock prices, EPS with Stock prices

Ìø‰Û_åá The relation between accounting and strategy, the impact of the marketing strategy on profit margin and sales growth for example

Ìø‰Û_åá Introduction to financial analysis tools, the ratio analysis using financial statements and using external non financial statement analysis as economic growth rates

Ìø‰Û_åá Application and interpretation of financial analysis tools, horizontal analysis versus vertical analysis

DAY TWO: Ratios Analysis, Cash Flows Analysis, Accounting Adjustments, and Forecasting Financial Statements

Ìø‰Û_åá Financial statement ratios; liquidity, Solvency, activity, Debt, profitability, market ratios

Ìø‰Û_åá The statement of cash flows and cash flow analysis tools; the concept of cash flow adequacy ratios

Ìø‰Û_åá Using key financial ratios as ROI, ROCE, EBIT MARGINS,EBITDA

Ìø‰Û_åá Developing forecasts and building financial statement forecasts

Ìø‰Û_åá Case study

DAY THREE: A Framework for Business Analysis and Valuation using Financial Statement

Ìø‰Û_åá Communicating with the capital markets

Ìø‰Û_åá Introduction to the concept of required return and cost of capital

Ìø‰Û_åá What earnings numbers are the right ones, are we talking about the accounting profits or the economic profits

Ìø‰Û_åá The EVA indicator in measuring corporate efficiency in maximising shareholders wealth.

Ìø‰Û_åá The use of accounting numbers in valuation – free cash flows valuation, residual income valuation, and accounting-based valuation multiples

Ìø‰Û_åá Business analysis and valuation: implementing the tools

Ìø‰Û_åá Case study