Financial Statement Analysis - Master the Financial Stmts!

Explore the income statement to understand revenues, expenses, and net income. Review the balance sheet for assets and financing, and the cash flows statement for cash sources and uses.

Explore a real life balance sheet from Snap Inc., highlighting assets, liabilities, and stockholders' equity, with examples like cash, accounts receivable, and accumulated deficit.

Analyze the income statement and cash flow statement to understand revenue, expenses, and cash movements, using Snapchat as an example to see how the balance sheet complements these.

Master the accounting equation: assets equal liabilities plus equity on the balance sheet, as shown in a 'food and stuff' case study illustrating this fundamental check.

Master double entry accounting, where every transaction affects at least two accounts such as cash and notes payable, or revenue and accounts receivable, ensuring assets equal liabilities plus equity.

Explain cash versus accrual accounting, show how revenues and expenses are recognized when earned or incurred, and illustrate how accruals and accounts receivable normalize earnings for larger companies.

Explore how depreciation and amortization spread asset costs over useful life as non-cash expenses, impacting the balance sheet, income statement, and retained earnings under accrual accounting.

Calculate gross profit from revenue minus cost of sales, then evaluate SG&A and other operating expenses, including depreciation, to assess income from operations and profit margin.

Explore how interest expense and taxes appear as non operating expenses on the income statement, how depreciation is treated, and how EBITDA offers a clearer view of true earnings.

Learn how EBITDA, earnings before interest, taxes, depreciation, and amortization, isolates true profitability by excluding financing decisions, one-time items, and non-cash charges for meaningful company comparisons.

Reconcile snapchat's net loss to ebitda by adding back depreciation and amortization and stock-based compensation, revealing an adjusted ebitda of about 188 million despite a 2.2 billion net loss.

calculate ebitda by starting from net income, adding back income taxes, interest expense, depreciation, and excluding non-operating income or expenses to reveal true profitability.

Explore the balance sheet, showing assets, liabilities, and stockholders' equity at a single point in time, and assess solvency, liquidity, and the assets = liabilities plus equity equation.

Explore balance sheet structure by distinguishing current and non-current assets, liabilities, and stockholders' equity, with examples like cash, marketable securities, accounts receivable, inventory, property, plant and equipment net, and intangibles.

Explore current and long-term liabilities, including accounts payable and accrued expenses, and analyze retained earnings, stockholders' equity, and accumulated deficits to interpret balance sheets.

Calculate current assets, net PPE, and goodwill to populate the balance sheet. Then balance total assets with total liabilities and stockholders' equity using cash flow data.

Connect net income to retained earnings on the balance sheet and learn the cash flow statement’s purpose: detail cash movements and show where cash comes from and how it’s used.

Analyze cash from operating activities by starting with net income, adding back non-cash items, and adjusting for accrual effects to accounts receivable and payable to reveal the true cash position.

Analyze cash from investing and financing activities, including long-term asset outflows and debt or stock inflows, and how these affect ending cash and the income statement and the balance sheet.

Track how net income, depreciation, and changes in receivables, inventory, and payables flow into the cash flow statement, ending cash, and balancing the balance sheet across operating, investing, and financing activities.

Analyze revenue growth using top-line metrics and the simple formula new minus old divided by old. Compare growth over time and against competitors to gauge performance.

Learn cagr as the average annual growth and apply it to ebitda, revenue, and net income, using end value over start value raised to 1 over periods minus one.

Explore revenue growth and the cagr to assess performance across 2015–2017, noting 2016 acquisitions inflated revenue and considering same-store sales for a clearer picture.

Analyze EBITDA growth and net income growth with year-over-year calculations, and see how acquisitions can distort these metrics, highlighting the need to exclude acquisition costs for a true picture.

The quick ratio measures how well a company can cover current liabilities and short-term obligations by excluding inventory from current assets, with the rule that it should be above 1.

Learn how to measure leverage with debt-to-ebitda by combining long-term and short-term debt, calculating the ratio, and applying a general below 3.5x guideline while considering industry differences.

Explore the fixed charge coverage ratio, EBITDA divided by fixed charges (debt payments, income taxes, capital expenditures, lease payments), and the goal to exceed 1x, with a 100k EBITDA example.

Calculate the quick ratio by excluding inventory from current assets to cover current liabilities, then assess leverage by comparing total debt to ebitda after a major acquisition.

Calculate the fixed charge coverage ratio using cash flow and income statement data, including debt payments, taxes, capex, and rent, and compare to EBITDA to assess cash flow sufficiency.

Explore gross profit margin and EBITDA margin, calculated the same way by dividing gross profit or EBITDA by revenue, and learn how they reflect production efficiency and profitability.

Calculate gross profit margin and EBITDA margin from the income statement, compare over time, and assess profitability and efficiency relative to net revenue.

Compute AR days as receivables divided by revenue, times 365, and AP days as payables divided by cost of goods sold, times 365 for cash-flow insight.

Calculate free cash flow by subtracting capital expenditures from cash from operating activities to show cash left after maintaining assets; use it to assess a company’s health and value.

Contrast ROA and ROE as two metrics influenced by leverage; ROA = net income divided by assets, ROE = net income divided by average equity.

Compute ROA and ROE using net income excluding depreciation and amortization and divide by total assets and equity, then analyze how depreciation, leverage, and acquisitions shape profitability across years.

Analyze a company's financial statements to show how a 2016 acquisition and higher leverage boosted revenue while hurting profitability and margins, creating negative free cash flow and higher debt risk.

celebrate finishing this course and apply core financial statement analysis principles to real-world daily life, financial modelling, and valuation across linked courses, using the same case studies and financial statements.