8 July 2016
Financial Statements: How to Prepare and How to Analyse
Are you already studying business, or planning to study business soon? Are you planning to open a business of your own? Then you definitely need to know how to prepare financial statements and how to read the information in those statements for decision making.
This course has three objectives: (a) how to prepare financial statements: Income Statement, Balance Sheet, and Cash Flow Statement; (b) how to read the financial statements; and (c) how to record transactions in accounting software to get things done electronically.
Under (a) we will follow basic accounting principles and book-keeping techniques to prepare financial statements. Under (b) we will analyze the statements to learn how to look at the numbers from owners’, managers’, or creditors’ points of view. We will perform comparative analysis between firms using liquidity, efficiency, profitability, and leverage ratios. We will also learn how to use the DuPont Analytical techniques in analyzing a firm’s financial statement. Under (c) we will be familiar with accounting software (www.twinfield.com).
Target group are those:
• Who are planning to study business soon
• Who are in business or planning to open a business
• Who studied accounting before but things are not clear yet
We will follow problem based learning (PBL) to make sessions interesting and enjoyable. We will emphasize on “learning by doing“ and work on various problems and exercises.
After completing the course you should be able to:
1. Record transactions in General Ledgers, prepare Trial Balance and Financial Statements
2. Analyze the financial statements to see the company’s strengths and weaknesses.
3. Perform DuPont Analysis to see the situation of a firm from different perspectives
4. Realize how to use software to perform accounting function in real world.
Day one: Accounting: Principles and Procedures
1. Forms of Business Organization: sole proprietorship, partnership, limited company and corporations
2. Basic Accounting Equation
3. Recording transactions following double entry system
4. Preparing Trial Balance
5. Rigorous practice (individual and groups)
Day two: Preparing Income Statement and Balance Sheet
1. What is and how to record Adjusting Entries
2. Preparing Income Statement
3. Preparing Balance Sheet
4. Rigorous practice (individual and groups)
Day three: Financial Statement Analysis: Basics
1. Preparing Cash Flow Statement
2. Rigorous practice (Group work with practical problems)
3. Mini-test to test progress
4. Review of mini-test questions
Day four: Financial Statement Analysis I
5. Preparation of Common-sized Statement
6. Perform liquidity, profitability, efficiency, leverage ratios
7. Introduction of DuPont Analysis (Group work with practical problems)
Day five: How Accounting is done in practice using Accounting Software
1. Introduction of Twinfield Accounting Software (www.twinfield.com)
2. Demonstration of how to post entries in the system
3. Demonstration of how to extract financial report from the software
4. Analyzed relevant facts and figures
5. Course evaluation and final assessment (multiple choice questions)
Dr. Golam Robbani
EUR 400: Course fee