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 third module on Balance Sheet Analysis which aims to equip the participants with analytical tools that will support decision-making in asset management and financing strategy.

Module Objectives:

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

• Evaluate the asset mix and the capital structure of the company
• Assess the financial condition of the company by using balance sheet indicators

1. Liquidity
2. Leverage

• Use a cash flow statement
• Use additional tools for analysis

1. Differential analysis
2. Capital budgeting techniques

Program Flow

Pre-session:

Prerequisite: Attended Module 2 or have a solid background in the profitability analysis

List of Ratios and Formulas

Morning session (08:30 AM to 12:00 NN)

I. Vertical Analysis of the Balance Sheet

• Asset Distribution
• Capital Structure - Leverage Discussion

II. Working Capital Management

• Accounts Receivable and Inventory Management
• Analysis of the Cash Conversion Cycle

Session Break (12:00 NN)

Afternoon session (01:15 PM to 04:30 PM)

III. Introduction and Analysis of the Cash Flow Statement

IV. Discussion of Relevant Costs and Capital Budgeting

• Differential Analysis
• Capital Budgeting

1. Payback Period
2. Net Present Value
3. Internal Rate of Return

Method: Lectures, 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.