Financial Statement Analysis II - DrWaleKesh

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Intercorporate Investments 4 Topics

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a. describe the classification, measurement, and disclosure under International Financial Reporting Standards (IFRS) for 1) investments in financial assets, 2) investments in associates, 3) joint ventures, 4) business combinations, and 5) special purpose and variable interest entities.

b. compare and contrast IFRS and US GAAP in their classification, measurement, and disclosure of investments in financial assets, investments in associates, joint ventures, business combinations, and special purpose and variable interest entities.

c. analyze how different methods used to account for intercorporate investments affect financial statements and ratios.

End of Curriculum Chapter Questions

Employee Compensation: Post-Employment and Share-Based 5 Topics

Lesson Content

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a. contrast types of employee compensation

b. explain how share-based compensation affects the financial statements

c. explain how to forecast share-based compensation expense and shares outstanding in a financial statement model and their use in valuation

d. explain how post-employment benefits affect the financial statements

e. explain financial modeling and valuation considerations for post-employment benefits

Multinational Operations 11 Topics

Lesson Content

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a. compare and contrast presentation in (reporting) currency, functional currency, and local currency

b. describe foreign currency transaction exposure, including accounting for and disclosures about foreign currency transaction gains and losses

c. analyze how changes in exchange rates affect the translated sales of the subsidiary and parent company

d. compare the current rate method and the temporal method, evaluate how each affects the parent company’s balance sheet and income statement, and determine which method is appropriate in various scenarios

e. calculate the translation effects and evaluate the translation of a subsidiary’s balance sheet and income statement into the parent company’s presentation currency

f. analyze how the current rate method and the temporal method affect financial statements and ratios

g. analyze how alternative translation methods for subsidiaries operating in hyperinflationary economies affect financial statements and ratios

h. describe how multinational operations affect a company’s effective tax rate

i. explain how changes in the components of sales affect the sustainability of sales growth

j. analyze how currency fluctuations potentially affect financial results, given a company’s countries of operation

End of Curriculum Chapter Questions

Analysis of Financial Institutions 7 Topics

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a. describe how financial institutions differ from other companies

b. describe key aspects of financial regulations of financial institutions

c. explain the CAMELS (capital adequacy, asset quality, management, earnings, liquidity, and sensitivity) approach to analyzing a bank, including key ratios and its limitations

d. analyze a bank based on financial statements and other factors

e. describe other factors to consider in analyzing a bank

f. describe key ratios and other factors to consider in analyzing an insurance company

Curriculum End of Chapter Questions

Evaluating Quality of Financial Reports 14 Topics

Lesson Content

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a. demonstrate the use of a conceptual framework for assessing the quality of a company’s financial reports

b. explain potential problems that affect the quality of financial reports

c. describe how to evaluate the quality of a company’s financial reports

d. evaluate the quality of a company’s financial reports

e. describe indicators of earnings quality

f. describe the concept of sustainable (persistent) earnings

g. explain mean reversion in earnings and how the accruals component of earnings affects the speed of mean reversion

h. evaluate the earnings quality of a company

i. evaluate the cash flow quality of a company

j. describe indicators of balance sheet quality

k. evaluate the balance sheet quality of a company

l. describe indicators of cash flow quality

m. describe sources of information about risk

Curriculum End of Chapter Questions

Integration of Financial Statement Analysis Techniques 6 Topics

Lesson Content

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a. demonstrate the use of a framework for the analysis of financial statements, given a particular problem, question, or purpose (e.g., valuing equity based on comparables, critiquing a credit rating, obtaining a comprehensive picture of financial leverage, evaluating the perspectives given in management’s discussion of financial results)

b. identify financial reporting choices and biases that affect the quality and comparability of companies’ financial statements and explain how such biases may affect financial decisions

c. evaluate the quality of a company’s financial data and recommend appropriate adjustments to improve quality and comparability with similar companies, including adjustments for differences in accounting standards, methods, and assumptions

d. evaluate how a given change in accounting standards, methods, or assumptions affects financial statements and ratios

e. analyze and interpret how balance sheet modifications, earnings normalization, and cash flow statement related modifications affect a company’s financial statements, financial ratios, and overall financial condition

Curriculum End of Chapter Questions

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Olawale Keshinro

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Course Includes

6 Lessons
47 Topics