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Advanced Financial Statement Analysis  

Gain Financial and Strategic Insight from In-Depth Understanding

11-13 June 2024 in Doha

For professionals familiar with the basics of financial analysis, this practice-oriented course will elevate their knowledge, enabling them to refine their interpretation of financial information. We teach a structured approach enabling broader understanding of financial statements from the strategic, accounting, financial and shareholder perspectives.

Participants customarily working as:

  • CFOs, Controllers and Treasurers
  • Finance managers and Financial Analysts
  • Controllers and Treasurers
  • Equity Research professionals
  • Investment professionals
  • Bankers and Credit Analysts
  • Build shareholder perspective when evaluating financial statements.
  • Adopt a structured approach to financial analysis combining strategic, accounting, financial and prospective analyses.
  • Relate financial ratios to a company's business model and strategy.
  • Understand the drivers of shareholder value in your business.
  • Determine financial consequences of operating and strategic decisions.
  • Adjust accounting data for distortions.
  • Analyze performance deficiencies through ratio analysis.
  • Interpret financial results and relate them to company operations. 
  • Build financial statements based valuation models.
  • Apply financial statements analysis to support performance improvement initiatives.
Assessing the financial health of a company is a complex task. A narrow, overly simplistic approach to financial analysis can lead to misleading and often costly decisions. This course presents a systematic approach to this important task. Beginning by first establishing the economic, strategic, and industry context necessary to evaluate financial information.

We will then address three main themes: 1) How information is compiled and how it must be made relevant before commencing any analysis; 2) How financial statements reflect success and risks in light of a company''s industry dynamics and strategy; and 3) How a financial statement-based framework can be employed to better value companies, using discounted cash flows, economic profit, and multiples-based techniques. 

In this practice-oriented program, we'll employ a number of case studies, and participants will be expected to work through individually and in groups. We'll also introduce the principles of economic profitability to make financial statements more relevant from multiple views; the strategic, accounting, financial, as well as the shareholder value perspective. 

1. Analysis Framework

Business and strategic analysis.
Accounting analysis.
Financial analysis.
Prospective analysis.

2. Building the Context

Building the value context for financial analysis.
Quantifying value and relating it to accounting information.
The opportunity cost of capital as an analysis benchmark.
How financial statements capture the economic consequences of decisions.
Industry structure and strategy in the context of accounting.
Industry and strategic analysis.

3. Analysis of Accounting Statements

Calculating and using ratios to assess profitability, liquidity, leverage and risk.
Limits of financial ratio application in managerial decision-making.
Disaggregating return on investment for insight into sources of value.
Financial leverage as a source of distortion in financial analysis.
Eliminating financial leverage from ratio analysis for greater clarity.
Understanding statement of cash flows
Cash flow patterns over the life cycle of a company.

4. Caveats in Analysis

Identifying distortions in underlying information.
Accounting adjustments for better comparisons.
Revenue, expense and inventory accounting.
Quality analysis.

5. Analysis using Economic Value Added

Components of economic profit (Economic Value Added).
Economic profit as a comprehensive measure of value creation.
Application in performance measurement.
Reducing impact of earnings manipulation with economic profitability.

6. Investment Analysis

Making multiples more robust.
Enterprise versus equity multiples.
Financial statement-based valuation modeling.
Using financial ratios to depict future performance.
Projecting forecasted company performance into financial statements.
Extracting the performance improvement expectations from the valuation.
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