Certificate Course In Financial Statement Analysis

First section is designed to let the candidate understand the very basics of accountancy. This will help to brush up their fundamentals of accounts and business terms.

By the completion of the first module students should be able to:

• Understanding various legal form of business. Understanding deeds, agreements and memorandum with which Proprietorship, Partnership, Joint stock companies, and Joint ventures come in existence and the impact on accounting.
• Describe the foundations of accounting and the role accounting standards play in the accounting environment
• Explain, analyze and apply transactions to the accounting equation
• Prepare general journal entries, post to the general ledger
• Prepare cash and credit journals, post to general ledger and extract trial balance
• Prepare and reconcile subsidiary ledgers
• Prepare journal entries and ledger postings for special transactions
• Construct a set of accounts to trial balance
• Identify the types of errors and their effect upon trial balance, profit figures and balance sheet values, and correct errors.
• Maintain management controls over cash
• Prepare entries for depreciation and disposal of non-current assets for an accounting period
• Match expenses and incomes to the accounting period
• Construct suitably classified statements incorporating the matching concept and accrual concept including closing and reporting overview

Second section will let the candidate understand the accounting from reporting and analytical point of view. How information is disclosed keeping GAAP’s in consideration and how accounting policy may affect financial statements. Also they will be able to critically evaluate the financial statements based on common ratios and other tools.

By the completion of second module students should be able to:

• Discuss the roles of financial reporting and financial statement analysis
• Discuss the role of key financial statements (income statement, balance sheet, statement of cash flows, and statement of changes in owners’ equity) in evaluating a company’s performance and financial position with special reference to Schedule VI of Indian Companies Act 1956
• Discuss the importance of financial statement notes and supplementary information, including disclosures of accounting methods, estimates, and assumptions, and management’s discussion and analysis
• Discuss the importance of Cash flow statements and Fund flow statements and their linking with each account in financial statements.
• Ratios
• Evaluate and compare companies using ratio analysis, common-size financial statements,
• Describe the limitations of ratio analysis;
• Calculate, classify, and interpret activity, liquidity, solvency, profitability, and valuation ratios;
• Demonstrate how ratios are related and how to evaluate a company using a combination of different ratios;
• Demonstrate the application of and interpret changes in the component parts of the DuPont analysis (the decomposition of return on equity);
• Accounting in computerized environment and importance of internal control. Bird eye view of different accounting software and  ERP packages e.g. TALLY , SAP etc
• Understanding basic cost concepts, Cost volume profit analysis, Marginal costing for decision making under various alternatives;
• Cost allocation, absorption and Activity based costing and activity based management
• Standard costing and Variance analysis for control and review

This section gives the candidate the practical aspects of working in various process of finance and accounting.

After completion of the module the candidate will be able to

• Explain the role of standard-setting bodies, such as the International Accounting Standards Board and the U.S. Financial Accounting Standards Board, and regulatory authorities such as the International Organization of Securities Commissions, the U.K. Financial Services Authority, and the U.S. Securities and Exchange Commission in establishing and enforcing financial reporting standards;
• Compare and contrast key concepts of financial reporting standards under IFRS and alternative reporting systems, and discuss the implications for financial analysis of differing financial reporting systems
• Explain the general principles of revenue recognition and accrual accounting, demonstrate specific revenue recognition applications (including accounting for long-term contracts, installment sales, barter transactions, and gross and net reporting of revenue), and discuss the implications of revenue recognition principles for financial analysis
• Discuss the general principles of expense recognition, such as the matching principle, specific expense recognition applications (including depreciation of long-term assets and inventory methods), and the implications of expense recognition principles for financial analysis
• Demonstrate the appropriate method of depreciating long-term assets, accounting for inventory, or amortizing intangibles, based on facts that might influence the decision
• Understand special type of transactions and their effects on financial statements according to  US GAAP