
Understand equity as the owner's money in business and learn to calculate it from initial and additional investments, minus withdrawals, plus profits, minus dividends, and losses, with organization registration variations.
Prepare the profit and loss statement, balance sheet from the December 2021 trial balance, and optional statement of changes in equity, then verify your results with the tutorial video.
analyze how fixed asset disposal affects cash flow and non-operational income on the p&l, showing a 2021 sale: balance 120, depreciation 40, closing 80, sale 80k, gain 8k, cash 88k.
Analyze the shift from earnings per share to earnings yield to measure investment return, comparing share price and earnings, with examples showing 4.8% in 2017 and 2.88% today.
Explore how a balance sheet lists assets and liabilities to reveal net wealth (equity), with current and noncurrent categories and items like cash, inventory, receivables, and share capital and reserves.
Learn to enhance vertical and horizontal analysis in Excel using conditional formatting with data bars, color scales, icons, and line charts to reveal trends.
Calculate return on capital employed by dividing earnings before interest and tax by capital employed (equity plus long-term debt). Note roce increases over the last four years, indicating improving profitability.
Analyze solvency by comparing total liabilities to the business's capital, and dig into capital to assess if sufficient to pay off obligations and sustain long-term operations.
Learn how the debt to total capital ratio, also known as gearing or leverage, is used in solvency analysis with like-for-like comparisons across firms.
Being able to read and understand financial statements is a core skill for anyone involved in business, accounting, finance, or investing. However, for beginners, financial statements often feel confusing because they rely heavily on accounting concepts that are rarely explained properly.
This course is designed to solve that problem.
This course starts from the absolute fundamentals. Every important accounting concept—such as revenue, expenses, assets, liabilities, equity, accruals, and depreciation—is explained clearly and simply, before being applied to real financial statements.
You will learn how financial statements are structured, why numbers appear the way they do, and how to interpret them logically. Only after building this foundation do we move into basic financial statement analysis and ratios, so you understand not just how to calculate numbers, but what they actually mean.
No prior background in accounting or finance is required. The course assumes zero knowledge and explains everything step by step, using plain language and practical examples.
By the end of this course, you will be able to:
Read and understand the Income Statement, Balance Sheet, and Cash Flow Statement
Grasp the core accounting concepts behind financial statements
Understand how accounting decisions affect reported profits and financial position
Perform basic financial statement analysis and ratio interpretation
Compare companies on a like-for-like basis with confidence
Who This Course Is For
Accounting and finance students
Business and management students
Aspiring accountants and bookkeepers
Professionals who work with financial reports
Entrepreneurs and business owners
Investors and startup founders
Anyone who wants to understand financial statements from scratch