Financial Statement & Decision Analysis

Recognize revenues when earned and expenses when incurred through the matching principle, allocating income over the delivery period and contrasting cash flow recognition with realization of income and expenses.

Explore the going concern concept, where a corporate entity is assumed to continue operations and depreciate long‑lived assets under standards like IFRS, US GAAP, or IND AS.

Master the basics of double entry bookkeeping, including debit and credit, the five accounts (assets, liabilities, revenue, expense, equity), and the path from T accounts to the general ledger.

Explore how transactions flow from T accounts and journals into the general ledger to generate income statements, balance sheets, cash flow statements, changes in equity, and notes to financial statements.

Learn vertical (common size) and horizontal (trend) analysis for financial statements, enabling cross-company comparisons using key ratios and bases, with an Infosys versus Alphabet case study.

Analyze profitability using PAT, operating profit, EBIT, and EBITDA, and compare these figures as a percentage of total revenue through common size analysis and year-over-year trends.

Compare liquidity and solvency by examining current versus non-current assets and liabilities within 12 months, highlighting liquidity's focus on day-to-day cash flows and solvency's long-term debt service.

Analyze cash flow from operations, investing, and financing to gauge profitability and liquidity. Relate asset efficiency to inventories, receivables, and payables, with industry contexts like FMCG, retail, and manufacturing.

Explore Infosys as a case study in analyzing annual reports, ratios, capital structure, and cross-sector comparisons, with IFRS and US GAAP considerations.

Analyze the annual report’s management commentary and shareholders letter, noting fiduciary duties and consolidated financial statements—balance sheet, profit and loss, and cash flows—and governance with covid impacts.

Explore the consolidated balance sheet with non-current and current assets, minimal liabilities and large cash reserves, and build an Excel model for ratio, vertical, and horizontal analyses.

Perform vertical and horizontal financial analysis on five-year balance sheet data, converting items to percentages of total assets and interpreting key items like total shareholders funds, reserves and surplus.

Apply vertical and trend analysis to interpret changes in equity and liabilities, noting equity drop from 81% to 70% and the growth of non-current and current liabilities.

Examine changes in non current assets, including tangible assets and non current investments, and analyze how their percentage of total assets affects trade receivables and current assets.

Examine how lease recognition under the standard lifts non-current liabilities and right-of-use assets on balance sheet, with note 1.9 detailing value of lease payments discounted at the incremental borrowing rate.

Analyze how lease recognition and the special economic zone reinvestment reserve expand liabilities without changing equity, while profits boost retained earnings and dividends or buybacks limit equity growth.