The Art Of Reading Financial Statements - Practitioner Level

by a real investor & independent board director, MBA, INSEAD with private equity experience

What you'll learn

Establish information source & download the latest financial report & identify accounting standard used IFRS, US GAAP or Local GAAP

Understand & identify main corporate governance elements : Determine corporate governance 1- or 2-tier model and external regulation

Understand role of statutory auditor, if audited identify statutory auditor, tenure of statutory auditor and audit opinion

Understand the scope of consolidation (& unconsolidation) of the company

Be able to do a vertical analysis of the balance sheet and understanding material assets & liabilities in balance sheet

Identify sources of capital including long-term debt, related schedule, cost to service long-term debt including interest coverage ratio, equity capital source

Deepen understanding of value creation for shareholders by understanding ROIC & WACC

Understand profitability of company by analysing revenue segments & cash generating assets, understand operating cash flow & working capital vs other cash flows

Be able to read earnings information including EPS, NOPAT, EBITDA, EBIT & net income

Requirements

Being interested in companies

Have a minimal knowledge how companies & business in general works

Wanting to learn how to read financial statements

Description

Financial statements appear complex and long, their reading requires judgment and practice, people do not know where to start reading and what to look for or people read financial statements in a linear/sequential way without being able to grasp the main elements even red flags related to the company. This course intends to teach you the main reading keys to read, understand & digest financial statements & financial reports. As Warren Buffett stated, if you want to become a better investor you have to understand the language of business which is accounting : “You have to understand accounting and you have to understand the nuances of accounting. It’s the language of business and it’s an imperfect language, but unless you are willing to put in the effort to learn accounting – how to read and interpret financial statements – you really shouldn’t select stocks yourself”I took the approach writing this course by looking back myself on what I was missing from my teachers & professors in my accounting & corporate finance classes. This course uses a different approach in reading financial statements and being able to quickly grasp the essence of the company being analysed.After taking the course you will be able to :Identify & understand accounting standard used IFRS, US GAAP or Local GAAPDifferentiate between 3 main types of financial statements (balance sheet, cash flow & income statement) Understand the fundamental accounting principles like going concern, fair valuation, principle of prudence, accrual vs cash accounting, etc.Understand & identify main corporate governance elements including corporate governance 1- or 2-tier models, role of shareholders & board of directorsUnderstand role of statutory auditor, being able to identify if a report is audited or unaudited; if audited identify who the statutory auditor is, tenure of statutory auditor, comments about statutory auditor’s independence/conflict of interest / related fees and audit opinionUnderstand the scope of consolidation (& unconsolidation) of the reporting company and the 4 methods how subsidiaries can be (or not) consolidated into financial statementsBe able to do a vertical analysis of the balance sheet and understand main profit generating assets and also the sourcers of capital in the balance sheetIdentify sources of capital including long-term debt and its related schedule, cost to service long-term debt including interest coverage ratio, equity capital source including potential retained earningsDeepen understanding of value creation for shareholders by understanding ROIC & WACCUnderstand profitability of company by analysing revenue segments (if available) & cash generating assets, understand operating cash flow & working capital vs financing & investing cash flowsBe able to read earnings information including EPS, NOPAT, EBITDA, EBIT & net incomeThe course also contains many practical examples as in all of my courses. We will practice & discussion financials of companies like Kelloggs, Mercedes, Telefonica, 3M, Evergrande, Alphabet, Meta, Microsoft, Unilever, Wells Fargo, Wirecard, CostCo and many more.At the end of the training I will show you the complete process on how I read the financial statements for 3 companies (Vonovia, Qurate, Skywest Airlines) so that you can exactly see and hopefully replicate how I grasp the essence of companies that are not known to me at the beginning.Last but not least, adult education without practice, knowledge checks and assignments is only entertainment. For that specific reason the course contains 10+ assignments to practice yourself as homework and share after completion with me for review if you wish.Wishing you a lot of success taking this training and hoping it will make you grow as an investor, analyst or corporate professional. Thanking you as well again for selecting my courseWith thanksCandi

Overview

Section 1: Introduction

Lecture 1 Introduction

Lecture 2 History & purpose

Lecture 3 Reporting standards

Lecture 4 Financial statement types

Lecture 5 Reporting & accounting principles

Section 2: Main elements of Corporate Governance

Lecture 6 Corporate law & company consolidation

Lecture 7 Shareholders

Lecture 8 Board of Directors

Lecture 9 Auditors

Section 3: Inventory of company resources & capital

Lecture 10 Balance sheet structure & value creation cycle

Lecture 11 Vertical & horizontal analysis - How to capture essence of balance sheet

Lecture 12 Primary sources of capital - equity

Lecture 13 Secondary source of capital – Introduction to debt & financial debt

Lecture 14 Other types of debt & liabilities

Lecture 15 Introduction to assets in balance sheet

Lecture 16 Main current assets in balance sheet

Lecture 17 Main non-current / long-term assets in balance sheet

Section 4: Understanding value creation & profitability

Lecture 18 Revenues & net income

Lecture 19 Net income & cash flows

Lecture 20 Realized vs unrealized earnings

Lecture 21 Value creation & ROIC

Section 5: Conclusion

Lecture 22 Example 1 : Analysis of Vonovia

Lecture 23 Example 2 : Analysis of Qurate

Lecture 24 Example 3 : Analysis of Skywest Airlines

Lecture 25 Final thoughts

Students in accounting & corporate finance,Value investors,People interested in corporate finance & financial statements,Financial analysts,Business appraisers,Accountants,Corporate Officers,Anybody interested in analysing and investing into companies