Financial Accounting and Financial Statements analysis

Explore the five core financial accounting principles—objectivity, accrual basis, matching, conservatism, and reasonableness—and see how they shape an objective financial picture, with materiality considerations.

Record small business transactions in financial ledgers, apply the accrual principle and the accounting equation of assets equal to debt plus equity, and prepare your first financial statements.

learn to convert ledgers into the income statement, balance sheet, and cash flow statement, revealing revenue, costs, gross and net profit, and cash flow relationships.

Explore how debits and credits work in t-accounts within double-entry bookkeeping. Use the balance sheet equation to understand transactions like inventory purchases and loans.

Explore the basic principles of revenue recognition, including the matching principle, and booking under IFRS 15 and ASC 606, when contracts form, obligations are fulfilled, and payment is expected.

Explore how Circuit City used extended warranties to fuel low appliance prices and examine the three revenue recognition approaches - full, deferred, and partial - highlighting accounting judgment.

Apply the five-step revenue recognition framework to real contracts: identify contracts and obligations, determine and allocate the price, and recognize revenue when obligations are satisfied, including bundles and variable considerations.

Explore how to recognize revenue in special cases: returns and refunds, sales commissions, loyalty programs, long-term projects, consignment arrangements, and bill-and-hold arrangements, with practical examples.

Explain how to account for accounts receivable and doubtful accounts, recognizing bad debt expense and building allowances via percent of sales, periodic reviews, and aging, while upholding the matching principle.

Explore the accounting view of inventory and its major categories—raw materials, work in process, and finished goods—and how they appear in financial statements, illustrated by steelmaking examples.

Learn to compute raw materials, work in process, and finished goods costs, including discounts, taxes, duties, transport, and overheads, plus stage-by-stage costing with normal and abnormal costs.

Explore FIFO, LIFO, and weighted average inventory methods, their impact on COGS and ending inventory during inflation, and how GAAP and IFRS treat them.

Learn to measure inventories at the lower of cost and net realizable value under IAS 2 and US GAAP, including impairment, obsolescence, and IFRS reversals.

Explore fixed assets, or property, plant and equipment, and learn when to capitalize versus expense; identify current and non-current assets and how construction in progress becomes fixed assets.

Learn how depreciation measures asset aging and affects profit and equity using straight-line, reducing balance, and units of production methods with mining and financial statement notes.

Explore depreciation decisions through a Harvard Business School case comparing Delta and Singapore Airlines. Analyze how fleet age, capacity utilization, and policy changes affect financial statements and performance.

Explore selling, modernization, and revaluation of fixed assets, impairment testing under IFRS and US GAAP, and the impacts on depreciation, revaluation reserves, and the P&L.

Explore how intangible assets are recognized, amortized, and impaired under IFRS and US GAAP, with examples like licenses, patents, brands, and customer lists.

Analyze the WorldCom accounting scandal, examining accruals and capitalization of line costs, the role of the CFO, and the consequences of fraudulent profit management on investors and the market.

Learn how the cash flow statement reveals how money moves through a company, its three sections (operating, investing, financing), direct and indirect formats, and how to analyze cash flows.

Learn to prepare cash flow statements using indirect and direct methods by translating the balance sheet and P&L into cash flows, detailing operating, investing, and financing activities.

Explore debt basics, including bank loans and bonds, revolvers, secured vs unsecured, seniority, fixed and floating rates, and covenants, illustrated by Huawei and Teva case analyses.

Learn to account for debt in financial statements, including loans and bonds, and determine bond prices using the market rate and yield to maturity.

Explore the components of equity, including shares, retained earnings, and reserves, and learn how common and preferred shares, treasury stock, and stock buybacks affect a company's financial statements.

Learn the basics of financial statements analysis, including profitability, margins, and debt management, and apply EBITDA, market value, and enterprise value concepts with comparables.

Analyze a company's debt position from a lender's view by evaluating liquidity, solvency, and ratios such as quick ratios. Consider liquidation analysis, seniority of debt, and covenants before buying bonds.

Compare two traditional brick-and-mortar players, Air Products and Air Liquide, using EBITDA margin and DuPont return on equity analysis to assess profitability, asset efficiency, leverage, and relative shares valuation.

Explore how working capital management uses accounts receivable, inventory, and accounts payable to compute the cash cycle with receivable, inventory, and payable days across Carrefour, Target, and Walmart.

Analyze new economy firms like Udemy and Coursera by balancing profitability and growth, using forward-looking nonfinancial metrics and financial models to test sustainability and cost control.