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LinkedIn Learning

Financial Accounting Part 2

via LinkedIn Learning

Overview

Take a deeper dive into the world of financial accounting. Learn about financial ratio analysis, forecasting financial statements, cash flow analysis, and more.

Syllabus

Introduction
  • Financial analysis, cash flow analysis, and valuation
1. Quick Review of Financial Statements
  • Who uses financial statements?
  • Review of the balance sheet
  • Review of the income statement
  • Review of the statement of cash flows
2. Analyzing Financial Statements
  • What is financial ratio analysis?
  • Comparing financial statements across time
  • Comparing financial statements across companies
  • Common-size financial statements
3. Ratio Analysis: DuPont Framework
  • Gunpowder, the French Revolution, and the DuPont framework
  • Ratio analysis
  • Return on equity
  • DuPont framework
  • Current ratio
  • Debt ratio
  • Price-earnings ratio
  • Real world: Apple vs. Google vs. Microsoft
4. Ratio Analysis: The Operating Cycle
  • Nike, McDonald’s, and the operating cycle
  • The operating cycle
  • Days sales in inventory
  • Average collection period
  • Days purchases in payable
  • Real world: Procter & Gamble
5. The Statement of Cash Flows
  • Jim Stice operating cash flow matrix and a wife named Kay
  • Analyzing cash flows
  • What does it tells us?
  • Cash flow patterns
  • One method of analysis
  • Two methods for presentation
6. Forecasting Financial Statements
  • Forecasting the financial statements of Home Depot
  • What causes financial statement amounts to change?
  • The initial assumptions
  • Forecasted income statement
  • Forecasted retained earnings
  • Forecasted assets
  • Forecasted liabilities and equity
7. Intro to Business Valuation
  • The intersection of accounting and finance
  • Value is based on expectations about the future
  • Overview of the market approach: Using multiples
  • Overview of the cost approach: Depreciated replacement cost
  • Overview of the income approach: Discounted cash flow
8. Valuation: Using Multiples
  • The Microsoft IPO
  • Simple illustration: Valuation of 69 Blaine Avenue
  • Earnings multiples
  • Equity multiples
  • Sales multiples
  • Other multiples: The case of WhatsApp
9. Valuation: Free Cash Flows
  • Buying the Hong Kong car?
  • Basic idea: Cash flows, timing, and risk
  • Risk and interest rates
  • Forecasting cash flows
  • Simple discounted cash flow valuation example
10. Valuation: Comparing Models
  • Brief McDonald's history
  • McDonald's: The numbers
  • McDonald's: Dividend-based valuation
  • McDonald's: Earnings multiple
  • McDonald's: Discounted cash flow valuation
  • McDonald's: Lessons from a comparison of the models
Conclusion
  • Next steps

Taught by

Jim Stice and Kay Stice

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