Financial Statement Analysis

Financial Statement Analysis in short lessons, starting with the parts candidates find hardest: worked examples with real-looking numbers, the IFRS vs US GAAP differences and the exam traps.

How this topic is tested, its exam weight and study tips: Financial Statement Analysis exam guide.

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Financial Statement Analysis formula sheet

All 193 formulas of the topic, each explained. Every module page ends with its own formulas; the key formulas are here. Downloads come with a subscription or a pass; the free trial does not include them.

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  1. 01

    Introduction to Financial Statement Analysis

    6 lessons · ~79 min 40 cards

    What financial statement analysis is for, the six-phase framework analysts follow, the regulators and filings that produce company information, how to use the notes, segment data, management commentary and the audit report, why IFRS and US GAAP differences and changing standards matter, and which other sources analysts rely on.

  2. 02

    Analyzing Income Statements

    9 lessons · ~120 min5 videos 45 cards

    How revenue and expenses are recognised (the five-step revenue model, principal versus agent, long-term contracts, capitalising versus expensing), how non-recurring items, discontinued operations and accounting changes are reported, how basic and diluted EPS are calculated, and how common-size income statements and margins reveal a company's performance.

  3. 03

    Analyzing Balance Sheets

    7 lessons · ~94 min2 videos 42 cards

    How the balance sheet mixes historical cost, amortised cost and fair value; how intangible assets and goodwill are recognised, amortised and tested for impairment; how financial assets are classified and where their gains land; how long-term debt and deferred tax liabilities are reported; and how common-size balance sheets and liquidity and solvency ratios turn all of it into analysis.

  4. 04

    Analyzing Statements of Cash Flows I

    6 lessons · ~78 min3 videos 42 cards

    How the cash flow statement ties the income statement to two balance sheets, how operating cash flow is built with the direct and the indirect method, how investing and financing cash flows are recovered from balance sheet changes, how to convert an indirect statement to a direct one, and where IFRS and US GAAP classify cash flows differently.

  5. 05

    Analyzing Statements of Cash Flows II

    5 lessons · ~67 min2 videos 37 cards

    How to read a finished cash flow statement: where the cash comes from and goes, what drives operating cash flow, how to common-size the statement, how to get free cash flow to the firm and to equity from CFO, and how to compute and interpret cash flow performance and coverage ratios.

  6. 06

    Analysis of Inventories

    8 lessons · ~109 min4 videos 44 cards

    How the choice of cost formula (FIFO, weighted average, specific identification, LIFO) splits the cost of goods between the income statement and the balance sheet, how rising and falling prices change profits and ratios, how to convert LIFO figures to FIFO, how inventory is measured at the lower of cost and net realisable value under IFRS and US GAAP, and what inventory disclosures and ratios tell an analyst.

  7. 07

    Analysis of Long-Term Assets

    8 lessons · ~111 min4 videos 45 cards

    How intangible assets are recorded depending on whether they are bought, built in-house or acquired with a whole business, what capitalising rather than expensing does to the statements and ratios, how impairments, reversals and disposals hit profit and the balance sheet under IFRS and US GAAP, and how to read long-lived asset disclosures to estimate asset age and reinvestment needs.

  8. 08

    Topics in Long-Term Liabilities and Equity

    8 lessons · ~108 min5 videos 45 cards

    How leases are classified and reported by lessees and lessors under IFRS and US GAAP, how defined contribution, defined benefit and share-based compensation plans reach the financial statements, and what the notes on leases, pensions and share-based pay disclose.

  9. 09

    Analysis of Income Taxes

    7 lessons · ~95 min4 videos 41 cards

    Why accounting profit and taxable income differ, how temporary differences create deferred tax assets and liabilities, how income tax expense is built from taxes payable and deferred tax changes, and how to read effective, statutory and cash tax rates and the tax note.

  10. 10

    Financial Reporting Quality

    8 lessons · ~114 min1 video 45 cards

    How to judge whether financial reports can be trusted: the difference between reporting quality and earnings quality, the quality spectrum from decision-useful reports down to fabrication, conservative versus aggressive choices, why managers misreport and what stops them, how non-GAAP measures, accounting choices and estimates can steer earnings, cash flow and the balance sheet, and the warning signs that should make an analyst dig deeper.

  11. 11

    Financial Analysis Techniques

    9 lessons · ~122 min5 videos 49 cards

    The analyst's toolkit: the financial analysis process, common-size and trend analysis, the four ratio families (activity, liquidity, solvency, profitability), how ratios fit together through DuPont analysis of ROE, industry-specific ratios, and how ratio analysis feeds forecasting.

  12. 12

    Introduction to Financial Statement Modeling

    8 lessons · ~113 min1 video 45 cards

    How analysts turn a revenue forecast into a linked set of pro forma income statements, cash flow statements and balance sheets, and how behavioural biases, competition, inflation or deflation, and the choice of forecast horizon and terminal value assumptions shape that model.