Understanding Financial Statements

 Understanding and Interpreting

Financial Statements

For Non-Financial Managers

 13^th AUG 2019 – The Lalit, Delhi

Program Description:

To many nonfinancial managers, the world of financial terminology and statements is often unclear ... confusing ... even downright frustrating. But, the truth is, buried within those numbers are often the answers you need to make smart business decisions.

Understanding and analysing financial statements and annual reports can be a daunting task for many of us, especially if we are non-finance professionals. We often find ourselves deterred from our attempts to delve into the myriad of information and unfamiliar terms presented in financial statements and their overwhelming details that are separately noted in the annual reports.

That is why we developed this workshop — to give professionals like you an “edge up” by helping you master the meaning behind the financial statements and terminology you’ve been wrestling with.

Methodology Of The Program

• The content will be delivered in an easy-to-understand way enabling the participants to understand the financial way of seeing things.
• Corporate case studies and practical applications will be an integral part of the discussions. The program will be delivered in an open and interactive manner.

Suitability and Applicability

• The course is suitable for those in both the private and public sectors from small and medium sized enterprises to multinational corporations.  It is designed for all those who are affected by the ‘finances' at work.  It will enable the participants to go back to their workplace and have a greater ability to ‘read the figures'. 

Course Outline:

Fundamental Financial Concepts and Terms

• Common finance terms
• Cash flow
• Liquidity
• Leverage
• Net present value
• Tangible assets
• And dozens more!
• The difference between cash and accrual accounting
• What every decision-maker must understand about Generally Accepted Accounting Principles
• Understanding the basic elements of a financial statement:
• Assets
• Liabilities
• Equity
• Comprehensive income
• Revenues
• Expenses
• Gains and losses
• Basics for determining an organization’s financial health based on financial statements

The Ins and Outs of a Balance Sheet

• The balance sheet: A thumbnail sketch of a business
• What a balance sheet can — and can’t — tell you about a company
• Assets explained:
• Tangible and intangible
• Fixed and liquid
• Real value
• Accounts receivable
• Inventory
• Current liabilities and current assets and equities defined
• Critical components of working capital
• Interpreting balance-sheet numbers for financial strength — and weakness

Analyzing the Profit and Loss Statement

• A P&L by any other name:
• Income statement
• Operating statement
• Statement of operations
• Profit and loss statement
• Which numbers indicate how revenue is generated
• The “cost of goods” formula and how to use it
• Understanding the role that depreciation plays
• Comparing a favorable and unfavorable P&L
• Examining a P&L statement to determine your business situation

Evaluating Financial Statements

• The purpose of the cash flow statement
• Analyzing the cash-flow statement to find out where resources are actually going
• How to recognize cash-flow problems before it’s too late
• Forecasting cash flow — and using this insight when increasing staff, purchasing and cutting costs
• Change in equity statement: What it is and how to use it
• Annual reports: Where to find the numbers that tell the real story
• Other types of financial statements you may encounter
• Compute the Financial Ratios Used by Financial Analysts to Assess:

– The Liquidity of a Business
– The Profitability of a Business
– The Risk of a Business

Critical Financial Measurement Tools and Techniques

• Tips for scanning any financial report and zeroing in on the pertinent numbers
• Calculating return on investment (ROI)
• Key financial indicators that will tell you if your organization is on the right track
• Using break-even analysis, forecasting and other financial tools to make informed decisions
• Valuable questions to ask before making any decision based on financial-statement numbers
• Important ratios that every nonfinancial manager should understand