For carving out a career in the accounting world, the knowledge of financial statements and ratio is crucial. The same is true for becoming a successful stock market investor too. When you learn to analyze and interpret the financial statements of companies, you are more equipped to identify companies with growth potential and thus invest in them.
Importance of financial statements
Financial statements are the financial records of a company, representing its financial performance and business activity.
For successful investing, it is important to find quality companies with strong balance sheets, positive cash flows and excellent earning potential. Financial statements of companies are a powerhouse of information. The numbers in a financial statement can provide important insights into the company’s products and services, future plans, results of past decisions and much more.
Whether you invest yourself or rely on a financial advisor, having the basic knowledge of financial analysis is essential. They serve a dual purpose – helping you to identify future potential investments as well as understand which shares to sell to maintain the performance of your portfolio.
Primarily, financial statements provide insight into 4 aspects of a company – its revenue, expenses, profitability and debt.
Financial statement analysis involves the technique of evaluating the line items in financial statements and comparing them to those of previous periods and competitors to understand whether the company is worth investing in.
Importance of ratio analysis
Ratio analysis, on the other hand, is important for understanding a company’s financial position, liquidity, solvency, risk, efficiency, level of utilization of funds, operations effectiveness and much more. Ratio analysis can help us understand how a company has performed over time and compare different companies in the same sector or industry. This can help us identify the best company for making a potential investment.
There are innumerable ratios that one can look at – solvency ratio, liquidity ratio, turnover ratio, operating efficiency ratio, profitability and much more. When combined with financial analysis, ratio analysis can be a treasure trove of information, providing insights into a company’s profitability.
Financial statements and ratio analysis is not unknown to anyone with a financial management background. But, not all of us have this kind of educational background, isn’t it?
So, does that mean we will not be able to perform financial statement and ratio analysis and identify promising companies for investment?
Of course not!
By enrolling on a financial statements, ratio analysis course, you can easily learn the basics and apply them to your day to day trading activities.
One of the best financial statement analysis courses available in India in today’s date is the Understanding Financial Statement & Ratio Analysis course offered by elearnmarkets.com, the educational subsidiary of StockEdge, the renowned financial market app.
Let us take a peek into the details of the course….
Course overview
This ratio analysis in accounting programme includes 22 videos spanning over 5+ hours and several supplementary downloadable materials. It provides an introduction to financial statement analysis and covers the basic topics associated with it. The programme is delivered by Chartered Accountants and Corporate Bankers, who not only possess advanced knowledge of accounting but also have years of experience working in the field. At present, the course is being delivered by CA Kuldeep Sharma.
In the beginning, the financial statement analysis course focuses on explaining the basics of financial statements such as balance sheets, income statements and cash flow statements. Then the programme progresses to explain how to understand the financial health and performance of a company by examining the most important financial ratios. These financial ratios are derived from the financial statement of the company.
This financial ratio analysis covers concepts, calculations and analysis. It empowers you to make decisions regarding your portfolio. The programme is especially useful for beginner investors who need to learn the basics of finance for enjoying a successful stint in the market.
If you are not very confident learning in English, no problem. This programme is delivered in both English and Hindi languages.
Intended participatants of this financial statement analysis course?
Since this financial statement analysis course covers the basics of both financial statement and ratio analysis, a wide range of candidates can enrol for it. It is ideal for investors, financial enthusiasts, equity analysts, CA/CS/CMA students, MBA students and commerce graduates. Apart from this, anyone interested to learn financial modelling or interested to know more about the stock markets can also enrol for it.
Topics covered
As mentioned earlier, this programme discusses the basics of financial statements, ratio analysis and gradually moves on to discuss more advanced concepts. The topics covered in this course include understanding important financial statements such as the profit and loss statement, balance sheet and cash flow statement. You will learn about types of depreciation and how to calculate them in excel. Apart from this, you will also acquire the knowledge of working capital.
On the ratio analysis side, this programme equips you with the basic knowledge of all the important financial ratios and their analysis. You will also gain an understanding of common size analysis from this financial ratio analysis course.
This ratio analysis in accounting course is definitely a very good starting point to learn about the financial statement and ratio analysis. From students to professionals, this programme can be beneficial for all.
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