Financial statement analysis and interpretation

Do you want to be introduced to various techniques of financial statement analysis including ratio analysis, horizontal analysis, segmental analysis and the analysis of historical data as key tools in the analysis of financial statements? This course explains the information needs of various stakeholder groups and how differences in these needs serve as the primary determining factor for the type of analysis to be performed. Later, you will learn about the significance of ratio analysis and how to use various ratios for the analysis of financial data. Ratio analysis helps to unravel the meaning behind the figures and reveals ways of understanding an organisation’s value-creation activities, even when access to detailed information is limited. Ratios can help in analysing whether an organisation is run efficiently and in a profitable manner and whether it is financially sound. In this course you will learn about a large number of ratios, in particular:

• why they are calculated
• how they are calculated
• how different stakeholder groups might be interested in different ratios

You will learn how to interpret different ratios such as profitability ratios, liquidity ratios, solvency ratios and efficiency ratios. You will develop the skill to carry out an in-depth analysis of a set of financial statements and to interpret and outline your findings and recommendations. It is important to note that this short course does not expand on investor ratios. Furthermore, other techniques of financial analysis (such as horizontal analysis, vertical analysis, analysis of historical data or segmental analyses) do not come under the scope of this course.