All business professionals need a good working knowledge of financial statements to include how they are created and how they can be used to make key business decisions.
Business and financial transactions are transformed into financial statements through an accounting process. Three required statements are produced:
- Income Statement
- Balance Sheet
- Cash Flow Statement
The statements provide the “results” of business activity and not the “reasons”. To sufficiently understand the reasons, you must look at relevant ratios. These ratios are standard indications of business reasons and serve as the basis for key business decisions. They are derived from a combination of calculations of components of the financial statements to indicate a unique and universally accepted metric or measurement. You can glean relevant indications of the company’s success from these metrics. They become the “language” through which we can understand business activity and use them to analyze financial statements. You can also compare one company to another or one financial period to another.
In this practical webinar, you will learn how to convert the results indicated on financial statements to the reasons needed to improve profits and productivity, providing a lens into the company to drive profitable change.
Upon course completion, you will be able to:
- Determine how business and financial transactions are transformed into financial statements
- Identify key components of financial statements
- Describe blocks and key concepts used in creating statements
- Define the meaning and relevance of accrual basis accounting
- Define the meaning and relevance of finance and accounting
- Identify key components of ratios used in financial statement analysis, including:
- Cash impact in all analysis
- Identify the five major categories of relevant rations:
- Profitability to measure gross and net profit
- Efficiency to measure productivity and utilization of resources
- Liquidity to measure ow well financial obligation are being met
- Solvency to measure debt encumbrances
- Cash- the key business success measurement
- Define ratio results and determine how to use them in making business decisions to improve profits and productivity
Program Level: Intermediate
Field of Study: Accounting, Finance