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Course Details

Financial Analysis: A Business Decision Guide - Second Edition (Course Id 704)

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Author : Steven Bragg, CPA
Status : Production
CPE Credits : 19.0
IRS Credits : 0
Price : $146.95
Passing Score : 70%
NASBA Technical: No
Primary Subject-Field Of Study:

Finance - Finance for Course Id 704

Description :

Financial Analysis describes how to extract meaningful information from the financial statements of a business. The course also delves into a number of analyses that can be used to improve business decisions, such as price optimization, constraint management, and credit granting. Another area addressed is financing, where the course covers financial leverage, capital structure, foreign exchange risk, and more. Other topics include financial forecasting, discounted cash flow analysis, and the valuation of acquisitions.

Usage Rank : 0
Release : 2014
Version : 1.0
Prerequisites : None.
Experience Level : Overview
Additional Contents : Complete, no additional material needed.
Additional Links :
Advance Preparation : None.
Delivery Method : Self-Study
Intended Participants : Anyone needing Continuing Professional Education (CPE).
Revision Date : 25-Feb-2015
NASBA Course Declaration : Participants must complete the final examination within one year of purchase and with a minimum passing grade of 70% or better to receive CPE credit unless otherwise noted on the Course History page (i.e. California Ethics must score 90% or better). After logging in click on the Course History links on your My Courses page for the Begin date and Expire date for the Final Exam.
Approved Audience :

NASBA QAS - NASBA Registry - 704

Keywords : Finance, Financial, Analysis, Business, Decision, Guide, Second, Edition, cpe, cpa, online course
Learning Objectives :

Course Learning Objectives

    Note the situations in which different types of financial analysis could be used.
    Identify the financial statements, their contents, and how they are formatted.
    Cite the key accounting concepts that can alter the information presented in the financial statements.
    State the methods used to interpret the information in the financial statements.
    Identify the components of the cost-volume-profit relationship, and how they are used.
    Identify the advantages of the various pricing methodologies.
    Cite the issues that can impact the cost of a cost object, and whether that cost is recognized.
    Identify the key constraint concepts and how they can be used to improve profitability.
    Note the concepts under which credit is granted to customers, as well as indicators of possible future delinquency.
    Identify the financing choices available to a company.
    Cite the impact and risks of financial leverage on a business, as well as when leverage is more likely to be used.
    State the issues impacting the capital structure of a business, as well as situations in which the capital structure should be reviewed.
    Identify the measurements used by investors to track the adequacy of dividend payments.
    Identify the risks and mitigating actions associated with foreign exchange.
    Cite the risks and mitigating actions associated with interest rates, as well as the terms of the various interest rate hedging instruments.
    State the elements of a system of forecasting and budgeting.
    Identify the issues impacting the rate of growth of a company.
    Identify the elements of the cost of capital, and note how the cost of capital is calculated.
    Cite the basis for the use of discounted cash flows, the types of annuities, and how discounted cash flows can be used.
    State the methods available for analyzing requests for capital projects, and the issues to be reviewed when examining such requests.
    Note the concepts involved in the lease or buy decision process, the information to include in or exclude from the decision, and the circumstances under which different lease types would be used.
    Identify the techniques used to place a value on a target company.
    Cite the methods used to measure and improve shareholder value, and the situations in which certain methods are more applicable.

Chapter 1
Overview of Financial Analysis

Note the situations in which different types of financial analysis could be used.

Chapter 2
The Financial Statements

Identify the financial statements, their contents, and how they are formatted.

Chapter 3
Accounting Issues Impacting the Financials

Cite the key accounting concepts that can alter the information presented in the financial statements.

Chapter 4
Interpretation of Financial Statements

State the methods used to interpret the information in the financial statements.

Chapter 5
Cost-Volume-Profit Analysis

Identify the components of the cost-volume-profit relationship, and how they are used.

Chapter 6
Pricing Decisions

Identify the advantages of the various pricing methodologies.

Chapter 7
Cost Object Analysis

Cite the issues that can impact the cost of a cost object, and whether that cost is recognized.

Chapter 8
Constraint Analysis

Identify the key constraint concepts and how they can be used to improve profitability.

Chapter 9
Credit Decisions

Note the concepts under which credit is granted to customers, as well as indicators of possible future delinquency.

Chapter 10
Financing Choices

Identify the financing choices available to a company.

Chapter 11
Financial Leverage

Cite the impact and risks of financial leverage on a business, as well as when leverage is more likely to be used.

Chapter 12
Capital Structure Analysis

State the issues impacting the capital structure of a business, as well as situations in which the capital structure should be reviewed.

Chapter 13
Dividend Analysis

Identify the measurements used by investors to track the adequacy of dividend payments.

Chapter 14
Foreign Exchange Risk Analysis

Identify the risks and mitigating actions associated with foreign exchange.

Chapter 15
Interest Rate Risk Analysis

Cite the risks and mitigating actions associated with interest rates, as well as the terms of the various interest rate hedging instruments.

Chapter 16
Financial Forecasting

State the elements of a system of forecasting and budgeting.

Chapter 17
Managing the Rate of Growth

Identify the issues impacting the rate of growth of a company.

Chapter 18
The Cost of Capital

Identify the elements of the cost of capital, and note how the cost of capital is calculated.

Chapter 19
Discounted Cash Flow Techniques

Cite the basis for the use of discounted cash flows, the types of annuities, and how discounted cash flows can be used.

Chapter 20
Capital Budgeting

State the methods available for analyzing requests for capital projects, and the issues to be reviewed when examining such requests.

Chapter 21
The Lease or Buy Decision

Note the concepts involved in the lease or buy decision process, the information to include in or exclude from the decision, and the circumstances under which different lease types would be used.

Chapter 22
Acquisition Valuation

Identify the techniques used to place a value on a target company.

Chapter 23
The Enhancement of Shareholder Value

Cite the methods used to measure and improve shareholder value, and the situations in which certain methods are more applicable.
Course Contents :

Chapter 1 - Overview of Financial Analysis

The Purpose of Financial Analysis

Key Financial Analysis Concepts

Judgment in Financial Analysis

Precision of Financial Analysis

Death by a Thousand Cuts

Monitoring Analysis

Role of the Financial Analyst

A Conservative Bias

Chapter 2 - The Financial Statements

The Income Statement

Income Statement Overview

The Single-Step Income Statement

The Multi-Step Income Statement

The Contribution Margin Income Statement

The Multi-Period Income Statement

The Balance Sheet

Overview of the Balance Sheet

The Common Size Balance Sheet

The Comparative Balance Sheet

The Statement of Cash Flows

Overview of the Statement of Cash Flows

The Direct Method

The Indirect Method

The Statement of Retained Earnings

Overview of the Statement of Retained Earnings

Financial Statement Disclosures

Chapter 3 - Accounting Issues Impacting the Financials

The Basis of Accounting

Accrual Basis of Accounting

Cash Basis of Accounting

Modified Cash Basis of Accounting

Effect of the Fiscal Year

Recordation of Revenue at Gross or Net

Bill and Hold Revenue

Negative Cash

Inventory Costing Methods

Depreciation Methods

Current Value Accounting

Financial Statement Reporting Issues

Headline Earnings

Pro Forma Earnings

Window Dressing

Auditor Certification

Chapter 4 - Interpretation of Financial Statements

Interpretation of Financial Statements

Horizontal Analysis

Vertical Analysis

Cash Coverage Ratio

Current Ratio

Quick Ratio

Liquidity Index

Accounts Payable Turnover Ratio

Accounts Receivable Turnover Ratio

Inventory Turnover Ratio

Fixed Asset Turnover Ratio

Sales to Working Capital Ratio

Debt to Equity Ratio

Fixed Charge Coverage

Breakeven Point

Gross Profit Ratio

Net Profit Ratio

Return on Net Assets

EBITDA

NOPAT

Limitations of Ratio Analysis

Chapter 5 - Cost-Volume-Profit Analysis

Contribution Margin

Breakeven Point

Margin of Safety

Cost-Volume-Profit Analysis

Sales Mix

Chapter 6 - Pricing Decisions

Psychological Pricing

Cost Plus Pricing

Dynamic Pricing

Freemium Pricing

High-Low Pricing

Premium Pricing

Time and Materials Pricing

Value Based Pricing

Other Pricing Strategies

When to Review Pricing

Price Elasticity of Demand

Cross Price Elasticity of Demand

Non-Price Determinants of Demand

Chapter 7 - Cost Object Analysis

Factors in Cost Object Analysis

The Assignability of Costs

The Customer Cost Object

Customer Acquisition Costs

Customer Lifetime Value

The Employee Cost Object

The Product Cost Object

The Product Line Cost Object

The Sales Channel Cost Object

Cost Object Termination Issues

Which Cost Objects to Track

Chapter 8 - Constraint Analysis

Overview of Constraint Analysis

The Cost of the Bottleneck

Local Optimization

Constraint Analysis Financial Terminology

Constraint Analysis from a Financial Perspective

The Constraint Analysis Model

The Decision to Sell at a Lower Price

The Decision to Outsource Production

The Capital Investment Decision

The Decision to Cancel a Product

Chapter 9 - Credit Decisions

The Credit Rating

Internal Credit Rating Systems

Third Party Credit Ratings

Evaluating Credit Scores

Use of Credit Ratings

Credit Rating Errors

Indicators of Future Payment Delinquency

Ongoing Credit Monitoring Actions

Requests for Credit Increases

The Riskiest Customers

The Demanding Customer

Effects of Industry Credit Practices

Chapter 10 - Financing Choices

Overview of Debt Funding

The Line of Credit

The Borrowing Base

Early Payment Discounting

Invoice Discounting

Factoring

Inventory Financing

Purchase Order Financing

Leases

The Long-Term Loan

Bonds

Agency Financing

Deleveraging

Overview of Equity Funding

Restricted Stock

Unrestricted Stock

Warrants

Angel Investors and Venture Capital

Private Investment in Public Equity

Debt for Equity Swaps

Chapter 11 - Financial Leverage

The Financial Leverage Concept

Issues Impacting Leverage

Leverage Risk

Impact of Compensation on Leverage

Chapter 12 - Capital Structure Analysis

Optimal Capital Structure

Capital Structure Analysis

Line of Credit Issues

Tax Shield Effects

Future Financing Flexibility

Loan Covenant Issues

Maturity Structure of Debt

Creditor Position Considerations

Debt Paydown

Cost of Capital Reduction

Planning for a Bond Rating

Capital Structure Measurements

Interest Coverage Ratio

Debt Service Coverage Ratio

Timing of Changes to the Capital Structure

Chapter 13 - Dividend Analysis

The Investor Viewpoint

The Company Viewpoint

The Stock Buyback Option

The Stock Dividend

Chapter 14 - Foreign Exchange Risk Analysis

Foreign Exchange Risk Overview

Foreign Exchange Risk Management

Take No Action

Avoid Risk

Shift Risk

Time Compression

Payment Leading and Lagging

Build Reserves

Maintain Local Reserves

Hedging

Types of Foreign Exchange Hedges

Loan Denominated in a Foreign Currency

The Forward Contract

The Futures Contract

The Currency Option

The Cylinder Option

Swaps

Netting

Chapter 15 - Interest Rate Risk Analysis

Interest Risk Overview

Interest Rate Risk Management

Take No Action

Avoid Risk

Asset and Liability Matching

Hedging

Types of Interest Rate Hedges

The Forward Rate Agreement

The Futures Contract

The Interest Rate Swap

Interest Rate Options

Interest Rate Swaptions

Chapter 16 - Financial Forecasting

The Differences between a Budget and a Forecast

The Run Rate Concept

Revenue Forecasting

The System of Budgets

The Number of Budget Scenarios

The Rolling Forecast

The Cash Forecast

The Short-Term Cash Forecast

The Medium-Term Cash Forecast

The Long-Term Cash Forecast

The Use of Averages

The Use of Clearing Dates in a Forecast

Chapter 17 - Managing the Rate of Growth

The Funding of Growth

Contribution Margins and Sustainable Growth

Organic Growth

Step Costs and Sales Growth

Other Constraints on Growth

Negative Effects of Excessive Growth

The Ideal Rate of Growth

Chapter 18 - The Cost of Capital

Cost of Capital Derivation

Cost of Debt

Cost of Preferred Stock

Cost of Common Stock

Weighted Average Cost of Capital

Variations in the Cost of Capital

Adjustments to the Cost of Capital

Cost of Capital as a Threshold Value

Chapter 19 - Discounted Cash Flow Techniques

Time Value of Money

Present and Future Value Tables

Net Present Value

Internal Rate of Return

Incremental Internal Rate of Return

Terminal Value

Inclusions in Cash Flow Analysis

Chapter 20 - Capital Budgeting

Overview of Capital Budgeting

The Capital Request Form

The Payback Method

Real Options

Capital Budget Proposal Analysis

Complex Systems Analysis

Research and Development Funding Analysis

The Outsourcing Decision

The Post Installation Review

Chapter 21 - The Lease or Buy Decision

The Lease Arrangement

The Lease or Buy Decision

Leasing Concerns

Leasing Advantages

Chapter 22 - Acquisition Valuation

Liquidation Value

Real Estate Value

Relief-from-Royalty Method

Book Value

Enterprise Value

Multiples Analysis

Discounted Cash Flows

Post Five-Year Cash Flows

Negotiation of DCF Contents

Replication Value

Comparison Analysis

The Comparison of Sales Multiples

The Comparison of Cash Flows

The Comparison of Contract Revenues

52-Week High

Influencer Price Point

The Initial Public Offering Valuation

The Strategic Purchase

Extraneous Valuation Factors

The Control Premium

The Earnout

Synergy Analysis

The Valuation Floor and Ceiling

Chapter 23 - The Enhancement of Shareholder Value

Return on Equity

Economic Value Added

Cash Flow Analysis

Key Success Factors

Stock Price Enhancement

Long-Term and Short-Term Value Considerations

The Industry Setting

Glossary

Finance Course 704 Home: https://www.cpethink.com/cpe-for-cpas
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