Financial statement analysis

This course is designed for Grade XII CBSE students.

This course is very simple and easy to understand. This is a potential mark fetching course.

Contents for the discussion are given below.

1. Objectives of Financial Statement Analysis

2. Tools for Financial Statement Analysis

 Comparative statements, common size statements, cash flow analysis and ratio analysis

3. Accounting Ratios

  Liquidity ratios - current ratio and quick ratio

  Solvent ratios - Debt equity ratio, Total Assets to debt ratio, proprietary ratio and interest coverage ratio

  Activity ratios- Inventory turnover ratio, trade receivables turnover ratio, trade payables turnover ratio and working capital turnover ratio

 Profitability ratios- Gross profit ratio, Operating ratio, Operating profit ratio, Net profit ratio and return on investment

Cash flow statements:

Meaning, objectives and preparation of cash flow statements as per AS 3(revised)- Indirect method

Adjustments relating to depreciation and amortization, profit or loss on sale of assets including investments, dividend(both final and interim) and tax

Course objectives:

To focus conceptual clarity of different tools of financial statement analysis.

To learn and practice complex board questions and its solutions

To master the underlying accounting terms used in corporate financial statements

To encourage open forum questions and brainstorm solutions with board exam perspective

All the best.