1. Financial Accounts Introduction – an overview of the primary financial statements and how they interact. Fundamental accounting concepts with a focus on matching / accruals. WE review the 4 ‘categories’ of financial transactions – Assets, liabilities. Income, expenditure.
2. Exercises on the accounting ‘flow’ – a downloadable set of 3 exercises that guide you through the links of financial transactions into the P&L and Balance sheet
3. Focus on Cash Flows – with a review of the structure of cash flow statements and how to reconcile the information to what is shown in the P&L. Another Excel exercise gives you the opportunity to continue building the complete picture of the links between the P&L, Cash Flow and balance sheet.
4. Income Statement analysis – this module starts off with a simple ‘breakdown’ of the different layers of profit (Gross, Operating, pre-tax, Net) and some non-official definitions such as EBITDA, and then starts to go into the matching concept in more detail – for example, looking at revenue recognition, CoGS and key non-cash items.
5. Balance Sheet overview – we start off with a broad overview of the valuation concepts (Cost or Value?) and then start the treatment and review of Current Assets, and into Non-Current (including Intangibles) and Liabilities (debt). The slightly more blurred topic of Provisions is covered. Of course, there are excel exercises to work through and follow.
6. Accounting for Leases – We look at some ‘bigger’ slightly more advanced issues now – starting with Lease accounting and how accounting rules can be used to ensure companies do not hide financial obligations by keeping them ‘off balance sheet’.
7. Pension obligations – Another significant area of analysis is company obligations relating to post-retirement payments (pensions and healthcare) How are these measured and treated and how does it impact on the P&L, Cash flow and Balance sheet?
8. JVs, Associates and Subsidiaries – Section 8 turns to how inter-group ownership is defined and treated in the statements, covering treatment of investments, JVs, Associate companies and Subsidiaries. This will introduce a deeper understanding of Non-controlling Interests (NCI) and Goodwill and its treatment.
9. Cleaning up the P&L– For analysis and forecasting it is common practice to ‘clean up’ a set of financial statements to remove non-recurring / unusual items (ones that either will not recur or will be hard to forecast due to their nature). This practical session sets the scene, asks you to have a go on a set of financials and then reviews the results. It’s a good way to finish off the program, pulling together all aspects of what you have learned along the way, with a focus on the P&L.