All organizations would like to achieve profitability, healthy cash flows and financial stability. Financial statements are used to summarize and communicate their financial performance.

As part of the Understanding Financial Reports (Finance for Non-Finance) Program, we present the second module on Profitability Analysis which aims to equip the participants with the tools of profitability analysis and use these in decision-making to maximize profits.

Module Objectives:

At the end of the course, the participants would be able to:

• Compute and interpret profitability indicators
• Relate strategies and action plans to operating performance

Program Flow

Pre-session:

Prerequisite: Attended Module 1 or have a solid background in the preparation of the balance sheet & the income statement

List of Ratios and Formulas

Module 2 (AM session: 08:30 AM to 12:00 NN)

Vertical Analysis of the Income Statement

> Revenue Analysis

• Total Asset Turnover
• Fixed Asset Turnover

> Product Cost & Gross Profit Analysis

Session Break (12:00 NN)

Module 2 (PM session: 01:15 PM to 04:30 PM)

> Operating Expense & Operating Profit Analysis

• Operating Breakeven Analysis

> Other Income & Expense

> EBIT & EBITDA

• Interest Cover
• Debt Service Cover
• Cash Breakeven Analysis

> Net Profit Margin

> Return Measures

• Return on Assets
• Return on Equity

Method: Lectures, case discussions, worksheet exercises

Duration: 08:30 AM to 12:00 NN & 1:15 PM to 4:30 PM (GMT +8)

Intended Audience: Officers and staff involved in Collections.