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4The 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