Financial Statement
Preparation and Analysis

The Accounting Cycle.

• Understanding the accounting cycle
• Supporting documents
• Analyzing transactions and recording in the system
• Preparing ledgers and General Ledgers (GL)
• Converting the GL to Trial Balance (TB)
• Types of adjusting entries
• The Adjusted Trial Balance (ATB)
• Mapping ATB to the financial statements
• Preparing financial statements
• Closing the books
• Preparing the Post-Closing Trial Balance (PCTB)

Chart of accounts and design techniques

• Designing the chart of accounts
• Maintenance of the chart of accounts
• Analyzing the chart of accounts
• Reconciliations and important issues
• Creating the trial balance

Accounting adjusting entries

• Understanding deferrals
• Deferred revenues and entries
• Deferred expenses entries
• Working with accruals
• Adjusting for accrued revenues
• Accrued expenses entries
• Other adjustments and corrections
• Preparing the adjusted trial balance

Preparing financial statements and notes

• Mapping the adjusted trial balance to the financial statements
• Preparing the income statements
• Preparing the balance sheets
• Preparing the cash flow statements
• Preparing the owner’s equity statements
• Objectives of external audit
• External audit versus internal audit
• Reading and interpreting the audit opinion
• Management Discussion and Analysis (MD&A)

Notes to the financial statements

• Understanding the requirements for the notes
• Organization and activities of the notes
• Basis for preparation
• Summary of significant accounting policies
• Accounting convention
• Use of estimates
• Completing the financial statements and the notes

Financial Statement Analysis: An Introduction

• Role of Financial Reporting and Analysis
• The Core Financial Statements and the Importance of the Annual Report
• The Important Role of Notes and Supplementary Information
• Objective and Types of Audits of Financial Statements
• Financial Statement Analysis Framework
• The Accounting Cycle
• Financial Reporting Mechanics
• Relationship, Elements and Classification of Financial Statements

Financial Reporting Standards

• Importance of Reporting Standards in Security Analysis and Valuation
• The Standards Setting Bodies
• International Financial Reporting Standards versus Generally Accepted Accounting Principles

Understanding Financial Statements

• Income Statement Components
• Revenue and Expense Recognition
• Balance Sheet Components:
• Measurement and Classification
• Cash Flow Statement:
• Operating, Investing, and Financing Activities
• Direct versus Indirect Methods in Cash Flow Preparation

Financial Analysis Techniques

• Ratio Analysis:
• Liquidity: Current, Quick, and Cash Ratios
• Asset Management and Activity Ratios
• Solvency: Debt, Equity, and Times Interest Earned Ratios
• Profitability: Profit Margin, Gross Margin, Return on Assets, Return on Equity
• Market and Valuation: Price-Earnings and Earnings Per Share Ratios
• Vertical Analysis and Strategy: Balance Sheet and Income Statement Approaches
• Trend Analysis and Growth
• DuPont Analysis: The Three-Step and Five-Step Models
• Time-Series and Cross-Sectional Analysis
• Limitation of Ratio Analysis

Financial Statement Analysis: Applications and Presentations

• Evaluating a Company’s Past Performance
• Comprehensive Real-Life Analysis of Publicly Traded Companies