Financial Analyst Crash Course: Beginner’s Guide to Finance

Explore financial analysis and its role in business and investing, covering quantitative and qualitative reviews of the three core financial statements to inform decisions.

Explore the income statement, balance sheet, and cash flow statement, and see how net income, assets, liabilities, and equity interrelate across schedules like depreciation and debt, with quality considerations.

Learn how debits and credits drive journal entries and balance sheets, recording asset changes, liabilities, and equity through scenarios like equipment purchases, loans, and accounts receivable.

Explore how to use the sec.gov company filings to pull TJX Companies' financial data, including 10-K, 10-Q, and consolidated statements of income, balance sheets, and cash flows.

Learn to use a financial calculator for time value of money calculations, inputting PV, PMT, FV, N, and I/Y to compute monthly payments and NPV or IRR.

Examine the income statement or profit and loss statement, how a business earns and spends money for private or public companies. Grasp fundamentals, modeling, and Excel tips to apply now.

Learn what the income statement reports, including revenues, expenses, and net income, and explore cash basis versus accrual basis and their impact on financial reporting.

Explore how a private company’s income statement tracks revenues, cost of goods sold, gross profit, operating expenses, and net income, including noncash items like amortization and depreciation, and one-time expenses.

Explore a consolidated income statement for a publicly traded retailer, illustrating February through January fiscal year and how 10-K and 10-Q reports reveal cost of sales and net sales.

Explore cash and non-cash expenses, depreciation and amortization, and straight-line and accelerated methods like double declining balance and MACRS for financial modeling.

Turn revenues minus cost of goods sold into gross profit, then use cash operating expenses, non-cash expenses, and interest to arrive at net income in the P&L format.

Define EBITDA as earnings before interest, taxes, depreciation, and amortization, a widely used operating performance metric and cash-flow proxy, while noting its nonstandard status and unadjusted versus adjusted add backs.

Explore common size income statements, where expenses are expressed as a percentage of revenue to enable cross-company and time comparisons, analyze margins, and practice in Excel.

Anchor cells in excel with dollar signs to create absolute and relative references. Build a common sized pal by expressing expenses as a percent of revenue across years.

Explore the balance sheet, a core financial statement that records resources and financing, and learn how assets, liabilities, and supplemental schedules connect to the income statement and cash flow statement.

Learn how balance sheets capture a company’s resources and financing, organized into assets, liabilities, and equity, with current and non-current categories and items like cash, receivables, inventory, depreciation, and amortization.

Analyze a private company balance sheet by examining current and non-current assets, accumulated depreciation and amortization, and equity to confirm total assets equal total liabilities and equity.

Learn to read a public company balance sheet using the 10-K, analyze current and non-current assets and liabilities, and interpret cash, leases, goodwill, and equity components.

Explore the debt schedule, detailing loans, lines of credit, and shareholder notes, including current balances, interest, maturity, collateral, term, and amortization, and reconcile totals with the balance sheet.

Analyze a public company's debt schedule using the ten K and Note J to examine term debt, lines of credit, senior unsecured notes, and maturities.

Learn how depreciation schedules break down fixed and intangible assets, compare straight line and double declining balance methods, use MACRS, and project depreciation on the income statement and balance sheet.

Define net working capital as current assets minus current liabilities to measure liquidity and short-term financial health; a positive result signals liquidity, while a negative one signals risk.

Explore financial ratio analysis by examining the operating cycle and the cash conversion cycle. Compare a business's performance over time and against industry peers using key financial ratios.

Explore the operating cycle and how it measures time to transform cash to non cash current assets and back. See how inventory, receivables, and payables drive the cash conversion cycle.

Quantify the cash conversion cycle using days inventory, days receivable, and days payable with practical ratios and a live example.

Apply Excel formulas using vlookup and match to pull inputs from income statements and balance sheets, then compute the cash conversion cycle for a public company example.

Compute the cash conversion cycle from days inventory, days receivable, and days payable using inventory turnover (COGS over average inventory) and receivables/payables turnover ratios, with 2022 vs 2021 comparison.

Analyze profitability and operating ratios that measure how well a company generates sales and profits from assets and invested capital, including gross margin, ebitda margin, net margin, roa, and roe.

Explore liquidity ratios—current, quick, and cash ratios—measuring a company's ability to pay current liabilities with liquid assets, and compare performance over time and against peers.

Explore leverage ratios, including debt-to-equity ratio, debt-to-capital, net debt to EBITDA, interest coverage ratio, and fixed charge coverage ratio, to assess solvency and lender risk.

Explore the cash flow statement, the basics of how a business makes and spends cash, and its final link between the income statement and balance sheet for public companies.

Explore the cash flow statement and how it reconciles net income with cash changes. Learn the three sections: operating, investing, and financing activities, and how they determine ending cash balance.

Clarify cash flow statements by distinguishing cash inflows and cash outflows, explaining sources and uses of cash, and applying four rules of thumb for assets and liabilities.

Analyze operating cash flows as the first section of the cash flow statement, starting with net income and adjusting for depreciation and amortization, other non-cash expenses, and working capital changes.

Examine investing and financing cash flows within the cash flow statement to understand spending on long-term assets and third party financing, including debt, equity, and dividends.