Financial Analysis Fundamentals

Recommended prep courses

These preparatory courses are optional, but we recommend you to complete the stated prep course(s) or possess the equivalent knowledge prior to enrolling in this course:

1. Accounting Fundamentals
2. Reading Financial Statements
3. Excel Crash Course

Financial analysis course overview

This four-module financial analysis course demonstrates how you can perform a comprehensive financial analysis of any organization using a variety of ratios derived from its financial statements. This program provides the skills and training necessary to be a complete financial analyst.

Vertical and horizontal income statement analysis

In this module of this financial analyst course, we work through the various components of the income statement and explain how to analyze it. Using real-life case studies, you will learn how to perform robust vertical and horizontal income statement analysis using various performance ratios. You will also learn how to benchmark income statement performance against an appropriate peer group.

By the end of this module, you will be able to undertake a comprehensive financial analysis of any income statement.

• Review the various components of the income statement
• Conduct a comprehensive vertical and horizontal analysis of the income statement
• Benchmark income statement performance against an appropriate peer group

Balance sheet and leverage ratio analysis

In this second module, you will analyze the balance sheet to determine the operational efficiency of a company. Key ratios taken from the balance sheet and its implications on a company’s cash flow are thoroughly explained in this segment. 

Illustrated using a technology firm and a retail firm, we will show you how to conduct a comprehensive analysis using efficiency ratios to determine how well a company is generating revenue. Exercises are provided to help apply proper benchmarking techniques and determine how a company is performing compared to its 5-year history and the industry as a whole.

By the end of this course, you will be able to examine the overall financial condition and performance of a company more effectively using the ratios and research methods demonstrated in this module.

• Breakdown and define each component of the balance sheet
• Explain overall efficiency ratios: Total asset turnover and net asset turnover ratio
• Explain working capital efficiency ratios: inventory efficiency, accounts receivable efficiency, and accounts payable efficiency ratios
• Determine how to reduce the working capital funding gap to improve operational efficiencies
• Undertake trend analysis to determine the overall financial performance of a company and forecast future performance.

Cash flow statement and ratio analysis

In this third module of this financial analyst course, you will analyze the cash flow statement to better understand the inflows and outflows of cash throughout the year. Additionally, using different financial ratios taken from the balance sheet, we will help you assess the solvency and leverage of a business. Finally, we will examine different funding options for an organization looking to both operate efficiently and grow. 

The cash flow statement and the different components that make it up will be explained thoroughly to help you assess the financial situation of an organization. By using examples drawn from a technology and retail company, you will understand how different ratios can be used to properly assess the operation of an organization from a cash management standpoint.

By the end of this course, you will be able to analyze how management is raising and using funds by reviewing the cash flow statement of the business. More importantly, you will be able to understand how debt and equity interact with leverage, and how different levels of leverage can affect a company.

• Breakdown and understand each component of the cash flow statement
• Understand different types of debt financing tools (e.g. bonds, syndicated loans, and leasing), equity (e.g. common shares and preferred shares), and leverage ratios (e.g. debt to tangible net worth, and total assets to equity)
• Use real-life cash flow statements to assess the operations of a company

Rates of return and profitability analysis

In the last module of this financial analyst course, you will combine everything you learned in previous modules to unlock the drivers of financial performance. This module guides you through the pyramid of ratios. You can use the pyramid to uncover the profitability, efficiency, and leverage drivers for any organization.

By the end of this course, you will understand how to effectively use the pyramid of ratios to analyze any organization. This module includes a hands-on case study and an Excel spreadsheet template that can be used to generate individual ratios and a pyramid of ratios from any set of financial statements.

• Unlock the drivers of the return on equity ratio
• Analyze the profitability, efficiency, and leverage ratios that make up the pyramid of ratios
• Understand the links between the pyramid’s primary, secondary, and tertiary ratios
• Construct a pyramid of ratios using a set of published financial statements and perform a complete financial analysis.
• Return on Equity (ROE) and Dupont analysis

Who should take this financial analysis course?

This financial analysis course is perfect for any aspiring financial analysts working in investment banking, financial planning and analysis (FP&A), equity research, corporate development, and other areas of finance and accounting.

This class counts as continuing professional education (CPE) credits for CPAs. 

For further CPE information, please read before purchasing:

https://corporatefinanceinstitute.com/about/cpe-information/

CFI financial analyst certification program

From beginner to advanced, CFI’s financial analyst training program will give you the skill you need to become a complete financial analyst.

This course is one of the 9 required “Core” courses to complete CFI’s financial analyst training program and earn the Financial Modeling and Valuation Analyst (FMVA) designation.