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The Power of Analyzing Financial Statements


Available as a custom program.
To be added on wait list for future dates,
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Los Angeles, CA


The course will introduce the participants to the main financial statements and disclosures produced by public and private companies, the principles underlying the content, format and measurement of these statements and the major tools employed by users of these statements for assessing their business performance, liquidity, prospects and risk.

Key Topics

  • The three main financial statements: the balance sheet, income statement, and statement of cash flows.
  • Basic accounting principles such as revenue recognition and matching of revenues and expenses.
  • Analytical tools: Financial ratio analysis; forecasting and pro-forma statements.
  • Earning manipulations and other pitfalls in analyzing the financial statements.
  • How to determine the value of the business based on the financial statements.
  • Current developments in financial reporting: The controversy surrounding mark-to-market accounting; The status of international accounting standards.

Practical Application/Exercises

  • Transaction analysis: demonstration of how different transactions (owners' investment, loans, sale, leasing activity, etc.) affect the financial statements.
  • Determining the credit worthiness of the business.
  • How leverage affects profitability and risk.
  • Predicting future profitability.
  • Predicting financial distress.
  • The relationship between cash flow and profitability.
  • Business valuation based on the financial statements.
  • Analyze your own company.

Learning Objectives/Benefits

  • Good understanding of the financial reporting of business entities.
  • Acquiring basic analytical tools for the determination of the business profitability, risk and equity valuation.
  • Ability to effectively use financial statement information for stock valuation.


Carla Hayn

Who Should Attend?

  • Executives and managers who often rely in their work and decisions on financial information and communication or otherwise need ot be more familiar with their firm's financial reporting.
  • Investors who would like to use the powerful information in the financial statements to identify potential stocks to invest in and faltering companies to avoid.
  • Loan officers who need to assess the credit worthiness of loan applicants.
  • Suppliers and customers who would like to learn more about the financial viability of the businesses they are dealing with.