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Company Accounts

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De-mystifying Corporate Accounts and Understanding Financial Ratios, (One Day)

This one day workshop is an introduction to the key aspects of understanding company accounts. The course is designed for between four and ten people and covers the following:

  • The income statement
  • The balance sheet
  • The cash flow statement
  • How financial statements are influenced by a company's business
  • Key ratios

Full details are below.

Morning

An introduction to the financial statements of UK/European companies

  • Covering accounting policies
  • Period of time versus specific date
  • Valuations of assets and liabilities, subjectivity, consolidation, audit function.

The Income Statement

  • What it contains
  • What accrual means and its affect on the balance sheet
  • Interactive Q&A of key lines and what items drive them

The Balance Sheet

  • Defining assets and liabilities
  • Working capital
  • The meaning of current and non-current
  • How does the balance sheet balance?
  • The accounting components of Shareholders Funds and what they mean

The Cash Flow Statement

  • What is its purpose?
  • How it differs from the Income Statement
  • How it affects the balance sheet
  • Interactive Q&A of the key sections and what goes into them

Afternoon

How the nature & condition of the business influences the financial statements

  • Comparing and contrasting sets of standardised data for “typical” quoted companies in different sectors
  • Balance sheet structure, measures of profitability, return on investment and book value versus market value
  • Consideration will also be given to the geographic spread (currency exposure), fixed capital intensity, working capital requirements, labour intensity, use of debt, intangible assets and the impact of acquisition strategy.

What financial statements tell us

  • Using three sets of anonymous corporate financial statements participants will undertake a workshop exercise to put into practice what has been learnt

An introduction to financial ratios

  • Who uses them and why they are used

Ratios for equity analysis

  • Defining, calculating and understanding EPS, P/E, Dividend cover, Dividend yield, book value versus market value.

Ratios for lenders and credit analysis

  • Key profitability, gearing and debt service ratios. EBITDA explained.
  • Using the same companies participants will calculate and appraise key ratios

End of workshop & review