Corporate Finance 101: Financial Statement Analysis & Ratios
4.3 (16 ratings)
Instead of using a simple lifetime average, Udemy calculates a course's star rating by considering a number of different factors such as the number of ratings, the age of ratings, and the likelihood of fraudulent ratings.
1,190 students enrolled
Wishlisted Wishlist

Please confirm that you want to add Corporate Finance 101: Financial Statement Analysis & Ratios to your Wishlist.

Add to Wishlist

Corporate Finance 101: Financial Statement Analysis & Ratios

A zoom-in, zoom-out, connect-the-dots guide to understanding financial statements, and analysing companies
4.3 (16 ratings)
Instead of using a simple lifetime average, Udemy calculates a course's star rating by considering a number of different factors such as the number of ratings, the age of ratings, and the likelihood of fraudulent ratings.
1,190 students enrolled
Created by Loony Corn
Last updated 8/2016
English
Curiosity Sale
Current price: $10 Original price: $50 Discount: 80% off
30-Day Money-Back Guarantee
Includes:
  • 8 hours on-demand video
  • Full lifetime access
  • Access on mobile and TV
  • Certificate of Completion
What Will I Learn?
  • Interpret financial statements - the Balance Sheet, Income Statement and Statement of Cash Flows
  • Parse SEC filings such as the 10K and 10Q to understand the business model of any company entirely from its investor filings
  • Calculate ratios in all major categories: liquidity, leverage, turnover, profitability and valuation
  • Apply Dupont's Identity to see whether a company's stock returns are driven by operational efficiency, asset efficiency or leverage
  • Calculate the sustainable rate of growth at which a company can grow without external financing
View Curriculum
Requirements
  • This course assumes no prior knowledge of accounting or finance
  • The investor relations sections of Facebook, Twitter and LinkedIn will be used, but the course will discuss how to access and use these public sites
Description

This is a zoom-in, zoom-out, connect-the-dots tour of Financial Statement Analysis

Let's parse that

  • 'connect the dots': Financial Statement Analysis gets a bad rep because its hard to connect the nitty-gritty of the financial statements to the company as a whole. This course makes a serious effort to do exactly that.
  • 'zoom in': Getting the details is very important in corporate finance - a small typo, or a minor misunderstanding can cost a company big. This course gets the details right where they are important.
  • 'zoom out': Details are important, but not always. You probably don't care about the nitty gritty of accounting for contingent liabilities if you don't know what accounts payable are. This course knows when to switch to the big picture.

What's Covered:

  • Corporate Finance Introduced: partnerships, proprietorships and the corporation
  • The Agency Problem: How auditors, the board of directors and the capital markets regulator play a role
  • Financial Statements: Balance Sheet, Income Statement, Statement of Comprehensive Income and Cash Flow Statement at exactly the right level of detail
  • Ratios: Five important types of ratios: liquidity ratios, leverage ratios, turnover ratios, profitability ratios and valuation ratios
  • Dupont's Identity: Return-on-equity can be decomposed into 3 elements: profits, asset-leanness and leverage.
  • External Financing Needed (EFN) and the Sustainable Rate of Growth: How fast can a company grow if it chooses to forgo external funding? Every startup should know this, really.
  • Common Accounting Shenanigans: The playbook of financial statement cheats has been studied by auditors and regulators - learn from history so you are not condemned to repeat it.

Case Studies:

Understanding a company entirely from its investor filings

  • Facebook: Fast-growing and profitable, this is the dream stock right now.
  • LinkedIn: Versatile, but struggling to break through - the jury seems out on LinkedIn
  • Twitter: Bleeding red and slowing growth - Twitter seems to be in trouble.


Using discussion forums

Please use the discussion forums on this course to engage with other students and to help each other out. Unfortunately, much as we would like to, it is not possible for us at Loonycorn to respond to individual questions from students:-(

We're super small and self-funded with only 2 people developing technical video content. Our mission is to make high-quality courses available at super low prices.

The only way to keep our prices this low is to *NOT offer additional technical support over email or in-person*. The truth is, direct support is hugely expensive and just does not scale.

We understand that this is not ideal and that a lot of students might benefit from this additional support. Hiring resources for additional support would make our offering much more expensive, thus defeating our original purpose.

It is a hard trade-off.

Thank you for your patience and understanding!


Who is the target audience?
  • Yep! Business majors and aspiring MBAs
  • Yep! CFA Level I candidates
  • Yep! Entrepreneurs looking to understand basic corporate finance
  • Nope! Accountants - you'll find this course too basic
Students Who Viewed This Course Also Viewed
Curriculum For This Course
43 Lectures
08:01:59
+
You, Us & This Course
1 Lecture 02:08

What this course is about, and what you will get from it.

Preview 02:08
+
The Enterprise
5 Lectures 48:54

Why do people work? And why, sometimes, a lone hand is a cool one.

Preview 09:45

Partnerships - general and limited - are important to understand (especially if you encounter any private-equity folks at cocktail parties)

Partnership
06:08

Artificial legal person, that's what a corporation is.

The Corporation
13:47

Public and Private
06:37

Principal-agent conflicts of interest are as old as the hills. See how auditors and the government (capital market regulators) get involved to keep things clean.

Preview 12:37
+
The Balance Sheet
5 Lectures 47:37

A tally of assets and liabilities, and what's left over is hopefully positive - that's what a balance sheet is.

The Balance Sheet
05:33

Assets
14:54

Future obligations that will have to be met by the corporation - these are called liabilities.

Liabilities
03:50

Shareholder's equity is what is left for the owners, the shareholders. This includes both invested capital and retained earnings.

Preview 10:10

Let's immediately put our theoretical knowledge to work studying 3 comparable balance sheets.

Balance Sheet Case Studies: Facebook, Twitter, LinkedIn
13:10
+
The Income Statement
4 Lectures 45:40

Revenue - Costs = Net Income. Conceptually simple, but the devil is in the details!

Income Statement
16:18

Follow the convoluted waterfall that takes us from revenue to net income. EBITDA, operating profit, and gross profit are some of the stops along the way.

Preview 13:07

Recurring or non-recurring? This is an important distinction about net income that folks need to know about.

Statement of Comprehensive Income
09:45

Again let's immediately put our knowledge to work - see how powerful Facebook's business is, and how shaky Twitter is.

Income Statement Case Studies
06:30
+
The Statement of Cash Flows
5 Lectures 57:41

Cash is key - a firm can go bankrupt despite significant assets, and significant profits, if it runs out of cash. That's why we need a statement of cash flows distinct from the income statement and balance sheet.

Statement of Cash Flows
12:34

Cash flows from operations, from financing and from investing: see how these are computed in the indirect and direct methods.

The Direct and Indirect Methods
11:58

Facebook has a ferociously profitable business, that generates plenty of cash from operations. The firm is aggressive about re-investing this into assets for the future.

Cash Flow Statement Case Studies
03:28

Working with Cash Flows - I
15:44

Working with Cash Flows - II
13:57
+
Ratios
3 Lectures 23:00

Once we have financial statements, what do we do with them? Use them to analyse companies of course! And there are 2 important techniques for doing this: time-series and peer-group (cross-sectional) analysis.

Ratios Introduced
05:00

Liquidity ratios focus on short-term solvency, leverage ratios focus on long-term solvency and turnover ratios focus on efficiency. There is a natural tension between efficiency and solvency!

Liquidity, Leverage and Efficiency
12:47

Profits and valuations - return-on-equity and return-on-assets. We are getting to the heart of corporate finance now.

Profitability and Valuation
05:13
+
Some Advanced Topics
3 Lectures 30:33

How can a firm make money for its shareholders? Three possible ways: profitability, leanness, and leverage. That's what Dupont's identity tells us.

Dupont's Identity
09:32

How fast can a company grow if it forgoes external financing? Every startup should ask itself this.

Preview 10:55

Cheating on books is as old and as common as cheating on spouses. Auditors and the SEC are watching though, remember that.

Common Accounting Shenanigans
10:06
+
Case Studies
3 Lectures 39:00

Highly profitable, and growing like crazy: that's why everyone loves Facebook's stock.

Facebook
08:40

A diversified business that might be huge - but also might turn into an also-ran. The jury is out on LinkedIn.

LinkedIn
12:29

The jury definitely seems to be in on Twitter, and its not looking good.

Twitter
17:51
+
EPS
4 Lectures 59:41
Introducing EPS
13:30

Basic EPS
13:13

Diluted EPS
16:04

Diluted EPS (continued)
16:54
+
Inventories
2 Lectures 32:26
Inventory Valuation
15:19

Understanding Inventories
17:07
2 More Sections
About the Instructor
Loony Corn
4.3 Average rating
5,034 Reviews
39,199 Students
77 Courses
An ex-Google, Stanford and Flipkart team

Loonycorn is us, Janani Ravi and Vitthal Srinivasan. Between us, we have studied at Stanford, been admitted to IIM Ahmedabad and have spent years  working in tech, in the Bay Area, New York, Singapore and Bangalore.

Janani: 7 years at Google (New York, Singapore); Studied at Stanford; also worked at Flipkart and Microsoft

Vitthal: Also Google (Singapore) and studied at Stanford; Flipkart, Credit Suisse and INSEAD too

We think we might have hit upon a neat way of teaching complicated tech courses in a funny, practical, engaging way, which is why we are so excited to be here on Udemy!

We hope you will try our offerings, and think you'll like them :-)