Financial Statement Analysis

The main aim of this course is to develop financial skills among participants to enable them assess the financial position and performance of their companies and related organizations over a period.  All companies report financial position and performance using financial statements. Financial Statement Analysis involves computing various ratios and assessing whether the ratios indicate a weakness or strength in the company affairs. The ability to compute and interpret key ratios from the financial statements is a necessary skill.  Shareholders’ and other stakeholders can assess the performance of their companies using ratio analysis. Directors’ performance can also be assessed using ratios.

Learning contents:

  • Review of the annual report and accounts
  • Preparation simple income statements and statements of comprehensive income
  • Preparation of statement of financial position
  • Review of the notes to the accounts
  • Calculation of key profitability ratios including Return on Capital Employed, Assets turnover, Profit margin, Gross margin, Net margin and Return on share capital
  • Calculation of key liquidity ratios like current ratios, quick ratios
  • Calculation of working capital ratios like Inventory days, Trade receivable days, Trade payable days
  • Calculation of Long term solvency ratios like Gearing, Debt/Equity ratio, interest cover
  • Calculation of Shareholders investment ratios like Earnings per share, Dividend per share, Price earnings ratio, Earnings yield, Dividend yield.
  • Interpretation of all ratios
  • Limitations to the use of ratios
  • Case study using real life companies

For whom:  Directors, Company secretaries, Legal advisers, Human resources officers Heads of departments etc

Fee:              One hundred thousand naira only

Duration:    One day