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Understanding Financial Statements

Make sense of complex financial documents and discover what they really mean — no prior knowledge of finance or accounting is required

Continuing Education Credits: CEU: 0.6 CPE: 6 

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1-Day Seminar


$279 for groups of 3 or more

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If you're a business professional who could benefit from a more thorough grasp of financial statements, this course is tailor-made for you.

With this financial statement training, you'll quickly master the fundamentals and develop a comprehensive understanding of how they work, learn how to interpret them accurately and discover how to use their information to make more effective, better-informed business decisions that have a positive impact on your organization's bottom line.

Here's just a sample of what you'll learn:
  • How to decipher general accounting terminology and gain a clear understanding of the language of finance and accounting
  • Gain insights to vastly improve your working knowledge and interpretive ability for balance sheets, income statements and cash flow statements
  • How to use your enhanced knowledge of financial statements to develop better budgeting, projection and forecasting skills
  • Interpreting annual reports: how to translate their deluge of information into knowledge that can help you make informed decisions
  • How to better communicate with accountants, bankers, comptrollers and other finance professionals
  • Using financial ratios to analyze trends, conduct industry comparisons and predict financial problems before they become insurmountable

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In today’s business climate, financial disorder is a serious factor in many organizations because of downsizing, outsourcing and contracting for services. It is critical business owners, managers and employees understand how to use available data to determine the financial health of their organizations, to assess the feasibility of their shortand long-term goals and to plot the direction in which their companies are growing.

In this powerful one-day seminar, you'll take a guided tour through the complexities of the financial statement. In clear, easy-to-understand language, we'll explain how to read financial statements, interpret their data and put that information to positive use.

This course is designed to give business owners, managers and other non-financial professionals an arsenal of tools for understanding, analyzing and interpreting financial statements. As a result of this course, you'll have a better understanding of not only financial statements, but of how their information fits into the "big picture" at your organization. You'll be able to use the information gleaned from financial statements to plan ahead for your organization, ensure that cash flow is regulated and make timely, educated decisions regarding new product lines, equipment purchases, business expansion, increasing personnel, borrowing capital and much more.


First Things First — Basic Accounting Principles for Non-Financial Professionals

  • How to use general accounting terminology (GAAP) like a pro
  • Understanding the underlying assumptions accountants use when preparing financial statements: historical cost, revenue recognition, matching principles, product costs, period costs, full disclosure, conservatism, materiality and accrual accounting
  • What the FASB, SEC and AICPA are and how they govern accounting methods
  • Non-accounting considerations that affect the value of financial statements
  • Two primary groups who are users of financial information — who they are, what they need to know
  • The difference between managerial accounting and financial accounting
  • Defining the role of the financial analyst
  • The financial analysis techniques best suited to specific situations

The Income Statement

  • Identify the components of a classified income statement
  • Why tax expense on the income statement is not always the same as taxes paid during the year
  • Understand why tax expense on the income statement is not always the same as taxes paid during the year
  • Cost of Goods Sold — what this means to an analysis of expenses
  • How to determine gross profit, compare to net profit and draw conclusions about a company’s operating environment
  • The difference between operating expenses, fixed expenses and depreciating expenses
  • How to calculate net profits or losses

The Statement of Cash Flow

  • The purpose and general structure of the cash flow statement.
  • Learning to distinguish between operating, investing and financing cash flows.

The Balance Sheet

  • Discovering what a balance sheet is and what sets it apart from other financial statements
  • How accounts are classified within the balance sheet
  • Identifying cash, marketable securities, inventory and prepaid expenses on the balance sheet
  • “Current,” “fixed” and “other” assets — what they are, and how to assess their value to the company
  • How to recognize an organization’s liquid assets
  • Historical cost depreciation and amortization — what the weaknesses are
  • The difference between short- and long-term liabilities
  • When liabilities can be evaluated as assets
  • Equity: what it is, where it appears on the balance sheet, how it relates to an organization’s liabilities
  • Using comparative analysis to assess an organization’s financial picture over a specified period of time

Understanding and Analyzing Financial Statements

  • What financial statements can’t tell you — review the limitations of financial analysis
  • Using horizontal analysis to determine increases or decreases in income, profits and expenses
  • How to use vertical analysis to compare individual income and expense amounts with net sales
  • An introduction to ratio analysis
  • Applying ratios to determine profitability: proven formulas for net profit margin, net operating margin, return on assets, return on equity, earnings per share and more
  • Current and quick ratios — two ways to determine your organization’s liquidity
  • A must-know formula for revealing inventory turnover and ensuring inventory management is on track
  • Using numerous other ratios to compare, analyze and make sense of financial data, including:
    • Current liability to owners’ equity
    • Fixed assets to owners’ equity
    • Long-term debt to working capital
    • Inventory to working capital
    • Long-term debt to total capitalization
    • Fixed assets to long-term debt
    • Operating ratio
    • Owners’ equity turnover
    • Networking capital turnover
    • Return on investment
  • Exploring the use of financial ratios to analyze trends, make industry comparisons and predict financial problems
  • Evaluating capital investment proposals by calculating:
    • The present values of future cash flows and annuities
    • The net present values and internal rates of return

What you need to know about public reports and audits.

  • The difference between public and non-public quarterly statements
  • Compilation reports for non-public companies — what they are and how to read them
  • Reports to the Securities and Exchange Commission
  • Forms 10-K, 10-Q and 8-K — and what information is required for each
  • Identifying the difference between government and not-for-profit accounting and reporting
  • What an encumbrance is and how it is used
  • How fiscal responsibility plays into governmental and not-for-profit reporting
  • What fund accounting is and how to use it
  • The three types of funds — Governmental, Proprietary, Fiduciary — and the purpose of each
  • Using audit reports to accurately assess company performance
  • Should your company be audited? Learn when the situation is right to request an audit and how to prepare for one
  • The difference between internal and external auditors
  • How to read and understand the two types of audits: financial statement audits and operational audits
  • Learning about each step of the audit process
  • How to read an audit report and apply the results to address your company’s needs
  • The challenges auditors face and how you might be affected