Course 3 - How to Read and Analyze Financial Statements (Video) (Course Id 1902)

This course provides a thorough coverage of how to read and analyze financial statements as well as how the analysis can be organized to identify and assess a company’s value drivers.  It begins with videos covering the balance sheet, income statement, statement of cash flows and the statement of shareholders’ equity.  It then moves into the real world, focusing on Home Depot, its key performance measures, leading to a complete ratio analysis.  Home Depot’s performance is then compared to that of Lowe’s Home Improvement in terms of the basic ratios, more much more importantly using an ROE-based model that highlights the companies’ value drivers.

Course Learning Objectives

• Explain what a balance sheet measures and describe the basic balance sheet classifications and accounts.
• Explain what an income statement measures and describe the basic classifications and line items.
• Explain what the statement of cash flows measures and describe the three basic classifications, especially the operating section prepared under the indirect method.
• Explain what the statement of shareholders’ equity measures and describe the different accounts that appear on it.
• Assess Home Depot’s financial condition and performance by reviewing its financial statements.
• Describe the key areas of business performance and link them to the measures provided by the financial statements.
• List, compute and interpret a set of ratios that link to the key areas of business performance.
• Analyze the differences in the financial condition and performance of Home Depot vs. Lowe’s using a set of financial ratios.
• Explain how return on equity can be broken down into its determinants and link this model to the measures of the key areas of business performance.
• Analyze the differences in the financial condition and performance of Home Depot vs. Lowe’s using the ROE model.