Financial Analysis And Forecasting

This workshop familiarizes participants with the principles of financial reporting and analysis enshrined in the financial statements with a view to enabling them to make informed decisions using financial statements.

The workshop covers tools and techniques of financial analysis and how financial ratios can be incorporated in predictive models of forecasting company failure.

Participants will be empowered with the knowledge and skills to ask the right questions when faced with financial statements for enhanced and value-adding economic decision making.

Content:

• Day 1
  • Workshop Overview
    • Objectives of Financial Statements
    • Role of Financial Reporting
    • Key Financial Statements
    • Statement of Comprehensive Income (Profit/Loss)
    • Statement of Financial Position (Balance Sheet)
    • Statement of Cash flows (Cash flow Statement)
    • Statement of Changes in Equity
  • Profit and Loss Statements
    • Elements (components), Principles (Revenue Recognition and Accrual Accounting)
    • Principles (Expense Recognition and implications)
    • Profitability Ratios (EPS and dilutive and non-dilutive securities)
    • Common Size financial Statements
    • Interpretation of comprehensive income statements
  • Balance Sheets
    • Elements and accounting equation
    • Common Size Balance Sheet
    • Interpretation of Balance Sheets
    • Balance Sheet Ratios
    • Liquidity and Solvency Ratios
  • Cash flow Statements
    • Elements of Cash flow Statements
    • Relationship between Cash flow, Profit and Loss and Balance Sheet
    • Interpretation of cash flows and common size cash flow statements
    • Free Cash flow to the firm
    • Free Cash flow to equity
    • Interpretation of cash flow performance and coverage ratios
    • Tools and techniques of financial analysis
• Day 2
  • Financial Analysis and Forecasting
    • Classification of Ratio Analysis (activity,  liquidity, solvency, profitability, valuation)
    • Inter-relationships among ratios
    • Du Pont Ratio  Analysis and tailor made analysis (equity, credit analysis etc)
    • Use of ratios in the forecast of earnings
    • Are accounting ratios reliable predictors of company failure?
    • Do market-driven variables play a role in predicting company failure?
    • Altman Z-Score Model and other models
    • Predictive Value of Ratio of Working Capital To Assets
    • Predictive Value of Ratio of Retained Earnings To Assets
    • Predictive Value of Ratio of Earnings before Interest and Taxes To Assets
    • Predictive Value of Ratio of Market Value of Equity to Book Value of Total Liabilities
    • Predictive Value of Ratio of Revenues to Assets
    • Empirical Validity of Predictive Models – Altman Z-Score (Z = 0.012X1 + 0.014X2 + 0.033X3 + 0.006X4 + 0.999X5)