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 Objective

The program consists of the following three integrated parts

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

 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.

 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

 The framework and hierarchy of financial analysis; operating , financial , and investment analysis

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

 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

 Evidence on the impact of earnings on stock prices, EPS with Stock prices

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

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

 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

 Financial statement ratios; liquidity, Solvency, activity, Debt, profitability, market ratios

 The statement of cash flows and cash flow analysis tools; the concept of cash flow adequacy ratios

 Using key financial ratios as ROI, ROCE, EBIT MARGINS,EBITDA

 Developing forecasts and building financial statement forecasts

 Case study

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

 Communicating with the capital markets

 Introduction to the concept of required return and cost of capital

 What earnings numbers are the right ones, are we talking about the accounting profits or the economic profits

 The EVA indicator in measuring corporate efficiency in maximising shareholders wealth.

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

 Business analysis and valuation: implementing the tools

 Case study