Accounting & Financial Statement Analysis: Complete Training

Explore the income statement (P&L), balance sheet, and cash flow statement to understand performance, revenue growth, assets, liabilities, equity, and cash liquidity.

Explain the main income statement items, from revenue and other revenue to total revenue, then cover cost of goods sold, selling, general and administrative expenses, depreciation, interest, and net income.

An exercise distinguishes revenue from other revenues by whether income aligns with a company's main activity, illustrated with solar projects and the effect of government subsidies and non-core energy sales.

Explore the revenue recognition principle and why recognizing revenue in the correct period matters for top-line growth, profitability, and investor confidence, guided by FASB, IASB, and SEC criteria.

Explore the main expense categories that affect profitability, including cogs, sg&a, depreciation and amortization, interest, and taxes, and learn how gross profit, ebitda, and ebit are derived from these costs.

Apply the expense recognition principle and the matching principle to record costs in the same period as related revenues. Distinguish product costs from period costs under accrual accounting.

Understand how individuals and corporations pay income taxes, with federal and state rates based on income after deductions, and how tax rules differ from IFRS and US GAAP accounting.

Explore the two main P&L formats, single-step and multi-step, and see how revenues, costs, COGS, gross profit, and operating income differ.

The balance sheet shows assets on the left and liabilities and equity on the right, highlighting cash, accounts receivable, inventory, finished goods, raw materials, depreciation, and property, plant, and equipment.

Explore how depreciation and amortization allocate asset costs over time, using straight-line and activity-based methods. Distinguish tangible assets from finite-life intangibles and understand D&A's impact on the income statement.

Explore historical cost versus fair value accounting for balance sheet assets, emphasizing consistency across asset categories and professional valuation for real estate and intangibles.

Analyze P&G's 2021 balance sheet to identify current assets like cash and accounts receivable, and non-current assets such as property, plant and equipment, goodwill, and trademarks.

Classify current and non-current liabilities—accounts payable, debt, taxes, and how notes to financial statements reveal other liabilities—using P&G’s $6 billion deferred tax liability as an illustrative example.

Identify shareholders' equity as ownership claims on a firm's capital, including paid in capital, retained earnings, and net income, linking the P&L and the balance sheet and signaling dividend implications.

Discover how the statement of shareholder's equity breaks down total equity into common stock, par value, additional paid-in capital, retained earnings, treasury stock, preferred stock, and non-controlling interest.

Explore the main accounting equation and how balance sheets stay in balance by equating assets with liabilities plus equity, using double-entry principles across businesses.

Explore the general ledger and subsidiary ledgers to organize balance sheet and income statement items, with examples like cash, accounts receivable, inventory, and property, plant and equipment.

Master how t-accounts visualize transactions with debits on the left and credits on the right, and see how assets, liabilities, and equity create the balance sheet.

Explore how income statement items use t-accounts, linking revenues and expenses to equity through retained earnings, with debits on the left and credits on the right.

Master the double-entry bookkeeping principle by seeing how every transaction affects at least two accounts, preserving the accounting equation through debits and credits.

Practice bookkeeping by recording journal entries and constructing a balance sheet and income statement for a lemonade stand, using daybook entries and t-accounts in Excel.

Register bookkeeping entries for a lemonade stand to build a p and l and a balance sheet, recording raw materials, cost of goods sold, revenues, cash, and expenses.

Register two months of transactions with a single entry, recording raw materials, cash, revenue, cost of goods sold, utilities, depreciation, and T accounts toward an income statement and balance sheet.

Use t-accounts to build the balance sheet and income statement, calculate totals, balance the accounting equation, and add net income to equity, including revenues and costs.

Practice building a profit and loss and balance sheet for 2015 from accounting transactions, using debits, credits, and T accounts, then calculate 2014-2015 financial ratios.

Explore how revenue and expense recognition can occur at different times than cash and why income and cash are not the same.

Explain why revenue is recognized when earned, not when cash is received, and show how cash flow can occur before, at, or after product delivery using simple t-accounts.

Explore how expenses are recognized when incurred rather than when cash is paid. See how timing affects cash flow under scenarios of paying now, delaying payment, and using prepaid expenses.

Explore accrual accounting's timing for revenue and costs. Learn the four accruals: unearned revenue, accrued revenue, prepaid expenses, and accrued expenses—and their effects on liabilities and assets.

Learn how cash flow and liquidity differ from profit, and how the cash flow statement reveals if a profitable business faces cash squeezes from debt payments and late client payments.

Examine the three parts of the cash flow statement, operating, investing, and financing, and how they derive from income statement and balance sheet changes.

Explore the direct method of cash flow statements, showing cash from customers and cash paid to suppliers. Contrast the direct method with the indirect method, which most companies use.

Learn to compute cash flow using the indirect method by adjusting net income for non-cash items and working capital changes, then classify cash flows into operating, investing, and financing activities.

Learn to calculate net cash flow with the indirect method in Excel, starting from EBITDA and adjusting for taxes, interest, depreciation, and working capital changes in operating activities.

Explore how credits and debits drive income statements and balance sheets, analyze T-accounts and the double-entry principle, and study cash flows, notes, and the Form 10-K in annual reports.

Explore P&G's 2021 annual report and 10-K to understand the income statement, balance sheet, cash flows, and notes that reveal the company's business, risks, and financial health.

Explain how annual reports are prepared and verified by independent external auditors, who provide assurance that statements present a true and fair view, boosting confidence for shareholders and other stakeholders.

Analyze financial statements to assess operating efficiency, profitability, liquidity, solvency, and intrinsic value using actual numbers; leverage the balance sheet, income statement, and cash flow statement.

Learn how subtotals and totals organize financial statements, calculate year-on-year growth with the formula current year's value divided by previous year's value minus one, and forecast future sales.

Analyze income statements and balance sheets by understanding the underlying business and its transactions, then compare performance over time and against peers to assess growth, profitability, working capital, and leverage.

Learn to format balance sheets and income statements with consistent names and definitions. Apply horizontal (trend) and vertical analyses to assess year-on-year growth and profitability.

Explore the days methodology for analyzing balance sheet items and measuring working capital efficiency. Learn how DSO, DPO, and DIO reveal cash conversion and inventory dynamics.

Explore liquidity, solvency, profitability, efficiency, and valuation ratios to analyze financial performance, including current and quick ratios, debt and interest coverage, ROA and ROE, asset turnover, and cash conversion cycle.

analyze P&G's 2021 annual report by extracting income statement and balance sheet data, computing liquidity and solvency ratios, and interpreting a negative net trading cycle and strong bargaining power.

Calculate ROA, ROE, and margin ratios for P&G, compare to the industry average, and explain how revenue growth and a one-off impairment shape profitability and overall performance.

Analyze historical financials to understand a company's business, evolution, current outlook, major line items, profitability, liquidity, solvency, the operating income to interest expense ratio, and future performance.

Download Tesla's historical financials from the company's website, identify 10-Q quarterly reports and 10-K annual reports, and save PDFs or Excel copies for analysis.

Analyze year-on-year revenue growth and key margins across Tesla’s business lines. Assess profitability using gross profit, EBIT margin, net loss margin, ROA, and ROE.

Analyze liquidity by examining Tesla's quick and current ratios and compute DSO, DIO, and DPO to reveal the net trading cycle and liquidity management.

Examine solvency by calculating the debt ratio and interest coverage using Tesla's total liabilities and assets, noting the 0.8 ratio and negative EBIT.

Leverage your accounting and finance knowledge to unlock opportunities and impress interviewers for roles such as accountant, financial analyst, controller, finance manager, or CFO.