Financial Statement Fundamentals for Small Biz & Investors

How to Understand the 'Story' of Any Business at Any Time and Improve Your Biz or Investment Results for Real Outcomes.
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745 students enrolled
Instructed by Mr Axel Tracy Business / Finance
$30
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  • Lectures 61
  • Contents Video: 3 hours
    Other: 3 mins
  • Skill Level Beginner Level
  • Languages English
  • Includes Lifetime access
    30 day money back guarantee!
    Available on iOS and Android
    Certificate of Completion
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About This Course

Published 5/2015 English

Course Description

  • Latest Course Update: 1st Nov, 2015.


Be the businessperson & investor you have always wanted to be...

With Financial Statement Fundamentals you will turn your accounting 'records' into value-creating, actionable information allowing increased profits, better cash flow & a higher net worth.

You will be given a clearly structured walkthrough of the three main financial statements. These documents, provided by your accountant or accounting software, will no longer appear to be written in an abstract, foreign language.

After the course you will be able to read and navigate through the Income Statement, Balance Sheet and Cash Flow Statement. And with this knowledge you will have an insight into your business or investments that you have never had the opportunity to see …and from then on, will never want to go without!

Understand the Financial Statements with this Comprehensive Course and Prosper in Business & Investing from Using Financial Data

With this deep-dive course, you will:

  • Find lessons in core accounting theory
  • Learn how to read and navigate the Income Statement, Balance Sheet & Cash Flow Statement
  • Build on all your new knowledge and begin analysing financial statements
  • Have all the support you need along this new (and exciting) journey
  • Find free bonus resources attached to the course to assist with your learning

When you take this course, understand the financial statements and start using them, you will never view your business and investments the same again.

For thousands of years there has been some form of accounting record keeping for reporting purposes. While the process has moved from stone carvings to the digital era, financial statements for financial reporting purposes continue to offer a high-level overview of the activities of a business or organisation.

Being able to view beyond the numbers of financial statements and tell the story of a business is a unique skill held by accountants and financial analysts. It enables them to advise businesses and investors on the best course of action to improve the returns on their client's capital. And while this course will not in itself be able to make you a professional advisor (although it can start you on that journey), it will allow you to view any business or any investment and assess its performance or position based on the three financial statements.

The course has been developed for small business owners and stock market investors who, while skilled in their own field, have no direct accounting or financial education or training.

The course is structured as follows:

It begins with an introductory section that describes the benefits and content of the complete course (including bonus resources) as well as a brief introduction to the financial statements and why they are unique and useful.

You then move on to learn some fundamental accounting theory. This is considered important (and thus included in the course) because it will help you understand what is going on 'under the hood' of the financial reports which you will later cover.

From here you will begin your journey through the financial statements. The income statement comes first, followed by the balance sheet and finally the cash flow statement. To keep it clear and straightforward the structure of each statement's section is quite similar so you can see the three statements in contrast to each other.

With your new grounding in the statements, you then study how they all can and do link with each other, as well as how you can find more information and detail in the 'notes' to the financial statements.

To assist your learning experience as greatly as possible and achieve the learning outcomes (as opposed to just watching videos) each section includes a revision quiz and many sections include 'Action Stations' where you are guided on how to begin to put theory into practice.

Last but not least, you will find many free, attached bonus resources. Not only will you have example basic financial statements to study along the way, you will receive three free PDF eBooks that are normally only available for sale. These eBooks cover accounting foundations, income statement basics and balance sheet basics and provide more written detail, or at least another delivery method, in your accounting knowledge journey.

Enrol now, take the leap and never look back, in your business and investments, again!

What are the requirements?

  • Being able to use spreadsheet software, like Excel, isn't required but makes financial statement analysis much easier
  • Having a good calculator is a great assistant for any proficient analyst

What am I going to get from this course?

  • Use the financial statements to tell the story of a business
  • Understand fundamental accounting theories that lie underneath the financial statements
  • Assess the performance of a business through the Income Statement via revenue, expenses & profit
  • Know the position or current financial state of a business by reading the Balance Sheet
  • Analyse where business cash came from and where it went (and for what purpose) from navigating the Cash Flow Statement

What is the target audience?

  • This course is an introductory 'fundamentals' course meant for those with little to no accounting or financial education or training
  • Small business owners who want to make more use of, and get insights from, accounting information provided by their accountant or financial system should take this course
  • Stock market investors who would like to analyse investments in more depth, using the financial statements, should take this course
  • If you have accounting education or financial career experience then this course may NOT be best for you as it is a beginner's course (unless you want to undergo revision or follow an intellectual curiosity)

What you get with this course?

Not for you? No problem.
30 day money back guarantee.

Forever yours.
Lifetime access.

Learn on the go.
Desktop, iOS and Android.

Get rewarded.
Certificate of completion.

Curriculum

Section 1: Introduction
06:15

Within this lecture of Financial Statement Fundamentals, I outline a preamble to the course and then introduce Section 1.

Specifically:

Preamble

  • Welcome to the Course
  • Who am I
  • Why I'm teaching this course
  • What this course is about: Financial Statements
  • Why Financial Statements are Important

Section 1: Introduction (What Will Be Covered)

  • Why You Should Study This Course
  • Nothing is as Practical as Good Theory
  • What's Included in the Course
  • Getting Support as a Student of the Course
  • Course Housekeeping
  • Introduction to the 3 Main Financial Statements
  • The Financial Statements: What are They?
  • The Universality of Financial Statements
01:51

Within this lecture of Financial Statement Fundamentals, you are given reasons why you should study the course.

This includes the skills you will learn:

  1. Navigating, reading and understanding the 3 main financial statements
  2. Learning the foundations of accounting theory
  3. Tell the 'story' of a business through financial & accounting information

As well as the benefits of having these skills:

  1. Make better decisions about your business or investments
  2. Improve returns from your business or investments
  3. ...higher levels of income in your life!

Still Unsure?

  • Fundamental accounting knowledge isn't that difficult to grasp
  • Even a basic understanding returns any investment many times over
  • You can do this! And I'm here to help all the way
02:55

Within this lecture of Financial Statement Fundamentals, you are given explanation as to why nothing is as practical as a good theory.

The lecture describes:

That this Course is very Academically Orientated
  • The focus is well researched, verified theory
  • The knowledge you would learn in university & other higher education institutions
  • It is not meant to be a blueprint, step-by-step guide
Why Theory is Better than a Blueprint
  • Blueprints assume a static, one-size-fits-all world
  • Exact system replication is often weakened by the subtleties of individual circumstances
That this Course is Accounting Theory
  • Starting with this theory is better in the long-term (for the scope for knowledge advancement and application development) and will make you capable of developing your own systems!

02:31

Within this lecture of Financial Statement Fundamentals, you find out what's included in this course.

Specifically, the lecture talks about the included:

1) Freebies

  • 3+ PDF eBooks:
  • Accounting Foundations, Balance Sheet Basics & Income Statement Basics
2) Fundamental Accounting
  • The Accounting Equation
  • Accrual Accounting
3) The Financial Statements
  • The Income Statement
  • The Balance Sheet
  • The Cash Flow Statement

4) Other Financial Statement Knowledge

  • How all the Statements Link to Each Other
  • 'Notes' to the Financial Statements
  • Attached Example Financial Statements
03:51

Within this lecture of Financial Statement Fundamentals, you find out how you can get course support.

Specifically:

You have support

  • Your learning is my priority
  • I love online teaching
  • Education and the digital revolution: disintermediation & democratisation
  • …I really want to make this course work

Support from Me

  • Send me a Message
  • Post to the Discussion Board or Comments
  • Reach out through accofina

Support from Your Peers

  • “Help Each Other Out”
  • Reply to the Discussion Board or Comments
  • Explanations to others solidifies your own learning
02:40

Within this lecture of Financial Statement Fundamentals, you are given some basic course housekeeping.

Specifically:

Formatting within Accounting
  • Bracketed numerals mean negative values
  • Red and black numerals
Course Viewing Quality
  • Set Video to HD
  • Set to Full Screen
  • …Get in touch if you can't understand my accent (or lisp!)
04:01

Within this lecture of Financial Statement Fundamentals, you are given your first introduction to the three main financial statements.

Specifically:

An Introductory List

  • No real explanation…yet!
  • Just a 'heads up'
The Income Statement
  • Statement of Performance
  • Accrual performance
  • Like a video (with a beginning, time period & end)
The Balance Sheet
  • Statement of Position
  • Like a photo (a snapshot in time)
The Cash Flow Statement
  • Statement of Performance
  • Cash performance
  • Like a video (…once again)
As well as the brief explanation into the Statement of Changes in Equity
  • Equity is part of the balance sheet with a number of accounts/items
  • Some of these items and their interaction can be complex
  • …thus we have the Statement of Changes in Equity
  • Used by larger businesses with more external stakeholders
  • Provides more insight & simplifies some aspects of financial analysis
  • …but it isn't (yet) recognised as one of the universal financial statements

08:00

Within this lecture of Financial Statement Fundamentals, you are explained what the financial statements are.

Specifically, that they are:

Summaries
  • Turn vast amounts of business activity into three brief reports
  • Transform every business action into quantifiable financial representation
  • Allow anyone a bird's eye view into this activity and action in minutes
Outputs of Financial Accounting Systems
  • Reports generated by accounting software
  • Statements (i.e. spreadsheets or reports) listing accounts and attached financial values
Financial Accounting Reports
  • Driven by 'external' stakeholder decision needs
  • Reliability over relevance
  • Often require auditing
  • Generated by set rules (GAAP)
Management Accounting Reports
  • Driven by 'internal' stakeholder decision needs
  • Relevance over reliability
  • No auditing (no proving)
  • Generated by custom design (no GAAP)

The 3 Universal Financial Statements

  • are Financial Accounting Reports
But…
  • The immense utility generated by their
  1. Common language and availability
  2. Ease of comprehension and use
  3. Story-telling ability
  • Results in the statements often being used by those internally (like other management accounting reports)
04:07

Within this lecture of Financial Statement Fundamentals, I speak to you about the universality of financial statements.

I speak about:

The Wonder behind these Straightforward Documents

  • Can be used by every business on the planet, from micro business to multinational
  • The same statements from: Business birth < Growth < Epic global corporation

Universal Common Language to Tell A Story

  • A story of performance and position…and much detail within these
  • Every single financial statement, ever and anywhere, was based on same underlying accounting theory underneath

Different accents, but the one language

  • Yes, statements can come with different formatting, presentation & complexity…based on business size, structure, geography & even CFO 'taste'
  • BUT! They all follow same accounting theory and very similar formal 'rules'

Think about it…

How many fields of knowledge present their summary information:

  • in such a universal format...with the purpose of making that information:
  • as Comprehensible for as many people as possible
  • and as Useful for as many people as possible

Few fields of study have this level of accessibility, combined with this level of global impact & influence

00:37

Within this lecture of Financial Statement Fundamentals, you review Section 1.

You are given a review of:

  • Why You Should Study This Course
  • Nothing is as Practical as Good Theory
  • What's Included in the Course
  • Getting Support as a Student of the Course
  • Course Housekeeping
  • Introduction to the 3 Main Financial Statements
  • The Financial Statements: What are They?
  • and finally, The Universality of Financial Statements
Section 1 Quiz
5 questions
02:28

Within this Financial Statement Fundamentals 'Action Stations' you are explained:

What are 'Action Stations'

  • A section that helps turn theory into application
  • Isn't required to complete the course,
  • but it will help your understanding
  • and help you take the first steps at financial statement 'story telling'
Choose Two Companies to Analyse
  • Get access to the financial statements of
  • 2 different business that are in the same industry and from the same country

Choose companies that:

  • Interest You
  • That you may have specialist knowledge of
  • That have easily accessed financial statements


Try googling your favourite companies

Look for Investor Relations section, Access the financial reports directly or find them in their Annual Reports

Alternatively, access Google Finance

Search for your chosen companies, Go to the 'Financials' Menu and access the 'annual data' financial statements


These two companies will be used in all 'Action Station' sections and will be your first attempt at financial statement analysis (story telling)

Section 2: UPDATE: How to Access Your Financial Statements
02:23

How to Approach this Section

Things to Consider When You Watch the The Next Lecture:

  • This section was added 7-months after the original production of the course
  • It covers examples of ALL financial statements in one place and not progressively throughout the course
  • Don’t expect to understand all accounting terminology at this point in the course
  • Everything will be covered in more detail throughout the course
  • Maybe just watch the next lecture twice:
  • Once when you start the course (where this section is placed)
  • And once at the end of the course after you have been trained in the financial statement/accounting education
25:53

Want to Know a Variety of Ways to Access Financial Statements?

  • According to my Udemy Analytics, the Example Financial Statements were very popular
  • Thus, I am adding this lecture that outlines steps to access your own financial statements at any time

What You Are Going to Cover:

Using bookkeeping software to access financial statements:

  • Xero
  • MYOB

Using the internet to access publicly listed company financial statements:

  • Google Finance
  • Company Investor Relations
  • Your Online Broker Website

Any Questions or Concerns?

Just Ask!

  • Post in the Course Discussion
  • Send me a Direct Message
Section 3: Accounting Basics
00:38

Within this lecture of Financial Statement Fundamentals, you are introduced to Section 2.

Specifically,

What will be covered:

  • IASB, FASB and Accounting Standards
  • The Accounting Equation
  • and finally, Accrual Accounting
07:05

Within this lecture of Financial Statement Fundamentals, you are introduced to the IASB & FASB as well as accounting standards.

Specifically:

GAAP (Generally Accepted Accounting Principles)

  • Earlier we spoke about GAAP (how they related to financial accounting & management accounting)
  • However… GAAP is a 'generic' term or could even be a more 'USA-centric' term

What I was trying to express using the term 'GAAP'

  • I was taking the concise, easy option to express:
  • Some sort of formal, codified set of financial accounting guidelines …or 'rules'
“Standards”: Financial Accounting 'Rules'
  • Standards give financial accountants guidance on how to account for, present & disclose the majority of transactions
  • Standards “Limit accounting policy choice”
The 2 Main Standard Setters
  • The IASB sets the IFRS
  • or The International Accounting Standards Board sets The International Financial Reporting Standards
  • The FASB sets the US GAAP
  • or The Financial Accounting Standards Board sets US Generally Accepted Accounting Principles
  • There are some differences between the two sets of standard systems (IFRS & US GAAP)
  • But there is a harmonisation process underway

Following Standards is Sometimes Mandatory …and Sometimes Not

  • Following IFRS & US GAAP is often legal or regulatory enforceable
  • e.g. for organisations with many stakeholders or with otherwise economic importance
  • But not mandatory for many smaller organisations
  • …but wouldn't it always be better to record and report transactions universally, consistently and transparently whenever possible?

So now you know who's at the top of the pyramid …and now you have the Power!

  • The IASB & FASB restricts financial accountants on how to behave and “limits accounting policy choice”
  • …Next time someone in accounting 'tells' you this is “how it's done”, ask (or even check yourself!) if they are following or using IFRS or US GAAP
10:28

Within this lecture of Financial Statement Fundamentals, you are introduced to the Accounting Equation.

Specifically:

Assets = Liabilities + Equity or A = L + E

  • The Accounting Equation (above) is at the heart of Double Entry Accounting
  • This Equation must ALWAYS balance
  • Assets, Liabilities and Equity are the three components of The Balance Sheet
  • These will be discussed later (in the Balance Sheet lectures)
  • Discussed later, but just keep in mind…
  • 'Assets' represents a financial value (e.g. $100)
  • 'Liabilities' represents a financial value (e.g. $30)
  • 'Equity' represents a financial value (e.g. $70)
  • Every transaction under the sun affects the Equation at LEAST TWICE …hence “double entry” accounting
  • And before & after every transaction (forever); The Accounting Equation MUST ALWAYS BALANCE
  • While Debits [Dr] and Credits [Cr] are not covered in this course (at this stage)
  • Every transaction: Impacts the equation at least twice, through at least one Debit and at least one Credit
  • AND the financial value of Debits MUST equal the value of Credits …this equality always makes sure the Equation remains balanced
  • So… if assets, liabilities and equity are all Balance Sheet components,
  • Where do Profit & Loss (P&L) components fit into the accounting equation?
  • After all, some transactions are just revenue and expenses (P&L)…
  • …Isn't the accounting equation meant to capture ALL possible business transactions?
  • Revenue and Expense transactions (and thus 'accounts') are part of Equity!
  • Revenue increases Equity & Expenses reduce Equity

Historical Context of Double Entry Accounting

  • Double entry accounting is hundreds of years old
  • It dates back to the year 1494
  • It was developed by an Italian Franciscan friar,
  • it was meant to reduce events ('stories') to numerical abstractions
  • and be accessible to “each and every man.”
  • …and today double entry accounting just powers QuickBooks, Xero & every other financial accounting software package you can think of…HA!
07:44

Within this lecture of Financial Statement Fundamentals, you are introduced to Accrual Accounting.

Specifically:

Income is recognised when earned and Expenses are recognised when incurred

And this has NOTHING WHATSOEVER to do with when cash is actually paid or received ...this is accrual accounting!

Non-cash items in Financial Statements

  • Accrual accounting means that financial statements have non-cash items
  • i.e. There are recorded transactions (and adjustments) in the financial statements where no financial cash transfer has taken place

Why on Earth do accountants use accrual accounting?

  • Its the accountants' attempt (and estimations) at describing economic reality …not just cash movements
  • Accountants (including you) want to describe the economic performance and position of a business, not just the cash performance and position
  • Accrual Accounting Shows Economic Reality & 'Tells the Story'
00:28

Within this lecture of Financial Statement Fundamentals, you review Section 2.

Specifically:

What Was Covered

  • IASB, FASB and Accounting Standards
  • The Accounting Equation
  • and finally, Accrual Accounting
Section 2 Quiz
6 questions
01:18

Within Action Station 2:

Find out background info into your companies

Within your chosen companies from Action Stations 1, find out as much information as reasonably possible into their business operations

E.g.

  • What do they sell?
  • Where do they operate?
  • What costs would be involved in operating the business and selling their products?
  • What facilities would they need to own?
  • Are they more labour-based or machinery-based?
  • Do they own any other businesses?


Start to build a background story that you can then overlay the financial statements

Are there any differences, at this stage, between your two companies that can already add to their individual, unique stories

Section 4: The Income Statement
00:40

Within this lecture of Financial Statement Fundamentals, you are introduced to Section 3.

Specifically:

What Will Be Covered

  • Naming Conventions
  • Like a Video
  • Performance Statement
  • Income
  • Expenses
  • Net Income
  • and finally, Formatting Alternatives
Article

Within this lecture of Financial Statement Fundamentals, you are provided Example Income Statements.

Specifically:

  1. Descriptive Format Income Statement
  2. Functional Format Income Statement
  3. Single Step Format Income Statement
  4. Multi Step Format Income Statement
02:05

Within this lecture of Financial Statement Fundamentals, you are introduced to Income Statement Naming Conventions.

Specifically:

There are many names for the Income Statement …but they all refer to the same document and they all contain the same information

  • Income Statement
  • Profit & Loss Statement
  • Profit or Loss Statement
  • Statement of Financial Performance
  • Statement of Comprehensive Income
  • Consolidated Statement of Operations
  • Consolidated Statement of Earnings
  • Consolidated Statement of Income
  • Consolidated Results of Operations

If unsure, look at the report's content

  • Revenue/Income
  • Expenses
  • and a Net Result (e.g. Net Income or Net Profit)
01:35

Within this lecture of Financial Statement Fundamentals, you are introduced to the idea that the Income Statement is Like a Video.

Specifically:

Income Statement Measures Across an Accounting Period

  • An accounting period can be any length of time
  • But is normally a month, quarter, half-year or year

The Key Idea:

  • There is a Start Date, Period & End Date
  • It is like a video with a start, middle & end

The Accounting Period (length of video) will be Given

  • When reading an Income Statement, look at what period it covers
  • The Start and End Date will be listed …and the report covers all time between (and including) those dates

Comparison of Video to Photo

  • The Income Statement video metaphor is in comparison to the Balance Sheet photo metaphor
01:35

Within this lecture of Financial Statement Fundamentals, you are introduced to the idea that the Income Statement is a Performance Statement.

Specifically:

The Income Statement is all about Performance

  • Performance is about achieving an objective
  • In a neoclassical business world the reason for being is 'the profit motive'
  • Thus, the income statement is about the ability to earn profits over a given accounting period

How Does the Income Statement Measure Performance?

  • Aggregates all Income and lists them by category
  • Aggregates all Expenses and lists them by category
  • Combines these to list Net Profit/Net Income

The Formula

  • Income - Expenses = Net Profit
03:48

Within this lecture of Financial Statement Fundamentals, you are introduced to the concept of Income.

Specifically:

The 'Top Line'

  • Income section sits at the top of the Income Statement
  • Commonly referred to as the 'Top Line'
  • Categories/accounts listed, their respective dollar figures and a summation total figure

What is business Income?

“Income is increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants.” - IASB Conceptual Framework

  • The Conceptual Framework definition is a bit complex with lots of accounting jargon…
  • …in a more simple sense, income is just selling goods or services within a business

How is Income broken down?

  • Income is broken down into two major categories
  • (1) Revenue and (2) Gains
Revenue
  • Revenue is income earned in the “ordinary activities of an entity”
  • In other words: doing what the business normally does (e.g. widget sales, service sales)

Gains

  • Gains are income earned that “may, or may not, arise…ordinary activities of an entity”
  • In other words: earning income through more abnormal activities (e.g. a book retailer selling a company car at a profit)
Descriptive Categories
  • Within an Income Statement, income is often listed by account, type or category for descriptive purposes
  • For example: a statement may pull apart revenue into goods revenue and service revenue and list both items separately in the income section.
  • This can aid with deeper analysis (story telling) of the business
07:51

Within this lecture of Financial Statement Fundamentals, you are introduced to the concept of Expenses.

Specifically:

Expenses: The opposite of income

  • Expenses section sits below the income section and sort of in the middle
  • Categories/accounts listed, their respective dollar figures and a summation total figure
  • There are usually more expense categories/accounts listed than income categories

What are business Expenses?

“Expenses are decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to equity participants.” - IASB Conceptual Framework

  • The Conceptual Framework definition is a bit complex with lots of accounting jargon…
  • …in a more simple sense, expenses are the costs incurred in operating the business to generate income
  • They are the opposite of income

Expenses are 'matched' using the Matching Principle

  • The matching principle states expenses should be recorded in the same accounting period as the revenue they generate
  • They should be 'matched' against the income they generate
  • This matching allows a better measurement of profit (remember: profit = income - expenses) and is a mix of the accrual accounting and revenue recognition principles
How are Expenses broken down?
  • Expenses, like income, are broken down into two major categories
  • (1) Expenses and (2) Losses
Expenses
  • Expenses incurred in the “ordinary activities of the entity”
  • e.g. salaries, rent
Losses
  • Expenses incurred “may, or may not,…ordinary activities of the entity”
  • e.g. impairments, fx losses
Descriptive categories
  • Similar to income, expenses are listed by account/category
  • This aids in deeper analysis (story telling) of the business
Inventory, Cost of Goods Sold (COGS) & Gross Profit
  • Cost of Goods Sold (COGS) is a very common and unique expense
  • It is the expense of inventory when sold
  • COGS is also known as Cost of Sales or Cost of Revenue
  • Inventory is manufactured or purchased and sits on the balance sheet as an asset.(e.g. an apple within Whole Foods Market
  • When the inventory is sold, this asset is is removed from the balance sheet and becomes a COGS expense on the income statement
  • Gross Profit may also be shown on the income statement within a 'functional' format income statement
  • Income - COGS = Gross Profit
  • Gross Profit is what is remaining for all other expenses and any profit after the cost of the inventory that was sold.
04:17

Within this lecture of Financial Statement Fundamentals, you are introduced to the concept of Net Income.

Specifically:

The 'Bottom Line'

  • Net Income section sits at the bottom of the Income Statement
  • Commonly referred to as the 'Bottom Line'
  • It is a single, labelled dollar amount

The 'Results'

  • Net Income = Income - Expenses
  • Net Income a.k.a (Net) Profit or Earnings
  • When expenses > income then it's a Loss or Net Loss
What Net Income Represents
  • Profit is a performance indicator, representing the outcome of achieving the profit motive
  • Represents a betterment of a business' position over the period, through either financial capital (net assets) or physical capital (productive capacity), excluding distributions and contributions from owners
Why is Net Income Important?
  • Ball and Brown's seminal working paper in 1968 found an association between profit results and stock market returns
  • Earnings per Share (EPS) results are probably the most widely quoted in the financial media and is linked to share prices
  • Business value is often based on a multiple of Net Income / Earnings
03:20

Within this lecture of Financial Statement Fundamentals, you are introduced to the Formatting Alternatives of the Income Statement.

Specifically:

Part 1 (a) Functional Format Income Statement

  • As opposed to 'Descriptive' Format
  • Includes COGS and Gross Profit section
  • Income - COGS = Gross Profit - Expenses = Net Income

Part 1 (b) Descriptive Format Income Statement

  • As opposed to 'Functional' Format
  • Does NOT includes COGS and Gross Profit section
  • Income - Expenses = Net Income

Part 2 (a) Single-Step Format Income Statement

  • As opposed to 'Multi-Step' Format
  • There is only once calculation (or step) to reach net income
  • i.e. Income - Expenses = Net Income

Part 2 (b) Multi-Step Format Income Statement

  • As opposed to 'Single-Step' Format
  • There are at least two calculations (or steps) to reach net income
  • e.g. Income - Operating Expenses = Operating Income - Other Expenses = Income Before Tax - Tax Expense = Net Income
00:37

Within this lecture of Financial Statement Fundamentals, you review Section 3.

Specifically:

What Was Covered

  • Naming Conventions
  • Like a Video
  • Performance Statement
  • Income
  • Expenses
  • Net Income
  • and finally, Formatting Alternatives
Section 3 Quiz
10 questions
01:59

Within Action Stations 3,

Compare Your Two Companies Income Statement

  • Within your chosen companies from Action Stations 1:
  • Spend time having a look at each account down the page and the respective totals
  • What are their Income figures?
  • How about their total Expenses figures?
  • Are they running Profits or Losses?
  • How do the two companies differ?
  • How are they the same?
  • Can you tell any stories into the businesses, based on their similarities and differences?

Compare the Companies Over Time

  • Now look at your companies' statements from last year and then compare them to this year's statement
  • What's changed?
  • What's the same?
  • Can you build a story based over the 2-years?

Keep Asking 'Why'

  • The key to financial statement analysis is to keep asking 'why'
  • To use the financial statements as the basis for further enquiry and use the enquiry to add sharpness to a fuzzy story
Section 5: The Balance Sheet
00:47

Within this lecture of Financial Statement Fundamentals, you are introduced to Section 4.

Specifically:

What Will Be Covered

  • Naming Conventions
  • Like a Photo
  • Position Statement
  • Assets
  • Liabilities
  • Equity
  • and finally, Formatting Alternatives
Article

Within this lecture of Financial Statement Fundamentals, you are provided Example Balance Sheets.

Specifically:

  1. 1-Column Format Balance Sheet
  2. 2-Column Format Balance Sheet
01:15

Within this lecture of Financial Statement Fundamentals, you are introduced to Balance Sheet Naming Conventions.

Specifically:

There are few names for the Balance Sheet …but they all refer to the same document and they all contain the same information

  • Balance Sheet (obviously)
  • Statement of Financial Position
  • Statement of Condition

If unsure, look at the report's content

  • Assets
  • Liabilities
  • Equity
01:28

Within this lecture of Financial Statement Fundamentals, you are introduced to the idea that the Balance Sheet is Like a Photo.

Specifically,

Balance Sheet is a Measurement at a Point in Time

While the income statement was like a video across time, the balance sheet is like a photo at a given point in time.

This point in time can be any date of the year …but is usually the last day of an accounting period

The Key Idea:

The balance sheet is one, single point in time.

If you wanted the photo for another day or date, you would need a brand new balance sheet

The Balance Sheet Date will be Given

When reading a balance sheet, look at the date that it was generated; the date it represents

The date will be listed and the Balance Sheet only represents that very day

01:59

Within this lecture of Financial Statement Fundamentals, you are introduced to the concept that the Balance Sheet is a Position Statement.

Specifically,

The Balance Sheet is all about the present Position

  • By position it is meant by the measurement of financial position
  • Or the current financial state or status of the business, measured by the value (or worth) of assets, liabilities & equity

How Does the Balance Sheet Measure the Position?

  • Aggregates all assets and lists them by category, in order of liquidity
  • Aggregates all liabilities and lists them by category, in order of liquidity
  • Combines these to determine equity, while also listing all equity accounts (categories)

The Formula (which is hopefully revision by now)

The Accounting Equation:

  • Assets = Liabilities + Equity
  • or rearranged: Assets - Liabilities = Equity
05:56

Within this lecture of Financial Statement Fundamentals, you are introduced to the concept of Assets.

Specifically,

Within the Balance Sheet

  • Assets sit at the top of the balance sheet
  • Accounts (categories) down the left and values down the right, with a summed total at the bottom
  • Ordered by liquidity

3 Criteria of Assets

  • Things the business control (not necessarily own)
  • From a past event
  • That will generate a future economic benefit

Current & Non-Current Assets

  • Current: Those that will be 'realised' (turned into cash or consumed) within a year
  • Non-Current: Those that will be 'realised' (turned into cash or consumed) within a period longer than a year
Tangible & Intangible Assets
  • Tangible: Assets with physical substance. They can be 'touched'
  • Intangible: Assets with without physical substance. Identifiable & non-monetary
Do Asset Values Matter in 'Story Telling'?

Yes!

  • Easton et al. in 1993 found an association between asset revaluations and stock market returns
  • i.e. investors consider the value of assets on balance sheet
07:13

Within this lecture of Financial Statement Fundamentals, you are introduced to the concept of Liabilities.

Specifically,

Within the Balance Sheet

  • Liabilities come after assets and are in the 'middle'
  • Accounts (categories) down the left and values down the right, with a summed total at the bottom
  • Ordered by liquidity

3 Criteria of Liabilities

  • Present obligation
  • Based on past events
  • Leading to an outflow of economic resources

Current & Non-Current Liabilities

  • Similar to assets, there is a division between current and non-current liabilities.
  • Current liabilities must be settled within the year. e.g. accounts payable, salaries payable
  • Non-Current liabilities need not be settled for at least a year. e.g. Bonds, other long-term (LT) debt
Provisions & Contingent Liabilities
  • Standard liabilities are considered 'black and white' when it comes to their certainty (i.e. neatly fit the 3 criteria)
  • However, there are two less certain types of obligations that must be considered (i.e. they don't as neatly fit the 3 criteria): Provisions & Contingent Liabilities

Provision:

  • A liability of uncertain timing or uncertain amount
  • e.g. a warranty provision
  • Provisions must be 'recognised' in the financial statements

Contingent Liability:

  • A possible obligation based on an uncertain event or, a present obligation with an amount that can't be reliably measured or payment is less than probable
  • e.g. a business is involved in litigation and may have to pay the plaintiff if it loses the case
  • Contingent liabilities must be 'disclosed' in the Notes to the financial statements
Do Liability Values Matter in 'Story Telling'

Yes!

  • Liabilities can be a good measure of risk and solvency
  • A company will only go out of business when it cannot settle its liabilities when they fall due …and this is not directly linked to running profits or losses
04:02

Within this lecture of Financial Statement Fundamentals, you are introduced to the concept of Equity.

Specifically,

Within the Balance Sheet

  • Equity sits at the bottom of the balance sheet
  • Accounts (categories) down the left and values down the right, with a summed total at the bottom

What is Equity?

  • According to the IASB Conceptual Framework, equity is “the residual interest in the assets of the entity after deducting all of its liabilities
  • Thus, there is a no formal explanation of equity it's a derivative of the definitions of assets and liabilities
  • Equity = Assets - Liabilities
  • Essentially, its what's left for the owners of the assets once all the liabilities have been paid off
  • It is the 'net worth' of the business

Book Values & Market Premiums

  • The value of equity is known as the 'book value' of the business
  • Any share price amount above the book value (per share) is known as the 'market premium' portion on the share
  • e.g. $4.00 share price - $2.50 book value per share = $1.50 market premium
Everyday Equity Accounts

Depending on the complexity of the business there can be a variety of equity accounts:

  • Share Capital / Owner's Equity
  • Current & Retained Earnings
  • Various Reserves
  • Preferred Stock
Does the Equity Value Matter in 'Story Telling'?

Yes! As an owner or shareholder, the equity value:

  • Is what you are buying in the business when you purchase shares
  • Is what will be returned to you when the business is wound up
00:59

Within this lecture of Financial Statement Fundamentals, you are introduced to Balance Sheet Formatting Alternatives.

Specifically,

Option 1

As we have been describing so far:

  • Assets at top
  • Followed by liabilities in the middle
  • With equity at the bottom

Option 2

Somewhat representing the accounting equation:

  • Assets on the left
  • While liabilities & equity on the right
00:34

Within this lecture of Financial Statement Fundamentals, you review Section 4.

Specifically,

What Was Covered

  • Naming Conventions
  • Like a Photo
  • Position Statement
  • Assets
  • Liabilities
  • Equity
  • and finally, Formatting Alternatives
Section 4 Quiz
9 questions
02:10

Within Action Stations 4,

Review Assets, Liabilities & Equity

  • What were their assets totals? And what makes up the assets?
  • What were their liabilities totals? And what make up the liabilities?
  • How about equity?

Repeat the earlier analysis, this time with the Balance Sheet

  • As you did with the income statement,analyse your companies' balance sheets both against each other and across time
  • Did this confirm any earlier assumptions?
  • Or is there any new story emerging?
  • Remember to keep asking 'why'

Comparison

  • At this point in time (after the income statement and balance sheet), does any business look stronger or more appealing than the other?
  • Why or why not?
Section 6: Cash Flow Statement
01:02

Within this lecture of Financial Statement Fundamentals, you are introduced to Section 5.

Specifically,

What Will Be Covered

  • Naming Conventions
  • Like a Video
  • Performance Statement
  • Cash Flow from Operating Activities
  • Direct & Indirect Cash Flow Statements
  • Cash Flow from Investing Activities
  • Cash Flow from Financing Activities
  • and finally, Life-Cycle & Business Health Insights
Article

Within this lecture of Financial Statement Fundamentals, you are provided Example Cash Flow Statements.

Specifically,

  1. Direct Cash Flow Statement
  2. Indirect Cash Flow Statement
01:18

Within this lecture of Financial Statement Fundamentals, you are introduced to Cash Flow Statement Naming Conventions.

Specifically,

As previously… While there are a couple of different names, they refer to the same document. The contents are identical

  • Cash Flow Statement (as used in this course)
  • Statement of Cash Flows
  • Cash Flow

If unsure, look at the report's content

  • Cash flow from Operating Activities
  • Cash flow from Investing Activities
  • Cash Flow from Financing Activities
00:50

Within this lecture of Financial Statement Fundamentals, you are introduced to the idea that the Cash Flow Statement is Like a Video.

Specifically,

The Cash Flow Statement is a report Across Time

  • Similar to the Income Statement, the Cash Flow Statement measures business activity across an accounting period
  • There is a Start, a Period and End
  • The Cash Flow Statement is Like a Video (as opposed to a photo)
  • A start date and end date will be given in the report
  • The Cash Flow Statement (video) will cover all the time between (and including) the listed dates
03:15

Within this lecture of Financial Statement Fundamentals, you are introduced to the concept that the Cash Flow Statement is a Performance Statement.

Specifically,

The Cash Flow Statement is about Cash Performance

  • Similar to the Income Statement, the Cash Flow Statement is about performance
  • The objective is now focussed on cash rather than income, expenses & profit

How Does the Cash Flow Statement Measure Performance?

  • Measures net change in cash over the period
  • Tracks all cash receipts and cash payments
  • Measures where AND what function cash came from and where it went

Classifies, aggregates, lists and sums cash receipts & payments as either:

  • Cash Flow from Operating Activities
  • Cash Flow from Investing Activities
  • Cash from Financing Activities

Why is the Cash Flow Statement useful in 'Story Telling'?

  • Cash results are often more 'truthful':
  • Less estimation than the accrual based Income Statement
  • Thus lower levels of accounting errors or direct manipulation
  • 'Cash is King'
  • You don't pay bills (liabilities) with profit …you pay them with cash
  • You don't go out of business when running losses …you go out of business when you run out of cash
  • You can't have 'fun' spending profit …you spend cash
  • Offers a different perspective from Income Statement & Balance Sheet:
  • The income statement and balance sheet talk lots about assets, liabilities & equity
  • …but not a lot about investing in the business and financing the business
  • i.e. how exactly have assets, liabilities & equity been altered (changed) throughout the period?
02:11

Within this lecture of Financial Statement Fundamentals, you are introduced to Cash Flow from Operating Activities.

Specifically,

Within the Cash Flow Statement

  • Cash Flow from Operating Activities sits at the top of the statement
  • Functional classifications or adjustments down the left, (Note: these classifications are NOT accounts, as with other statements), values down the right, with a summed total at the bottom

Contribution to Net Change in Cash

  • The summed total will equate to the actual: cash flow from operating activities

The Formula:

  • Net Change in Cash = Cash Flow from Operating Activities + Cash Flow from Investing Activities + Cash Flow from Financing Activities

What 'story' this section tells:

  • Shows cash inflows and outflows from the business:
  • That tells how well it is performing its core operations, its standard, everyday business activities
  • e.g. a fruit market receiving cash from selling oranges “Cash receipts from customers”
  • the fruit market paying for six crates of oranges from a farmer “Cash payments to suppliers”

The Business Life-Cycle through the Cash Flow Statement

  • Cash Flow from Operating Activities: 'Doing what they excel at'
03:11

Within this lecture of Financial Statement Fundamentals, you are introduced to Direct & Indirect Cash Flow Statements.

Specifically,

Formatting Alternatives for the Cash Flow from Operating Activities

  • There are 2 ways to format the Cash Flow from Operating Activities,
  • the (1) Direct and (2) Indirect methods
  • Both will show the exact same final, summed result for this section …but both use different methods to reach that result
  • AND both show different classifications (and values)
  • THUS they do look very different and can (at first) be a little confusing
  • Different jurisdictional requirements and different business preference
  • Lead to the different formats being prepared by different businesses
  • Further, while the indirect method is considered simpler to prepare
  • The direct method is believed to be better at predicting future cash flows (better at 'story telling')
  • Whatever the reason, the common occurrences of both formats require you to be able to read and understand
  • BOTH the direct and indirect method of cash flow from operating activities

The Direct Method

  • Discloses major classes of operating activities and their cash payments and receipts
  • e.g. 'cash receipts from sales of goods', 'cash payments to suppliers' or 'cash payments to employees'

The Indirect Method

  • Starts with the net income figure and works backwards by making adjustments for all non-cash transactions in the income statement and balance sheet
  • e.g. Net Income + depreciation - increase in accounts receivable + decrease in inventory - decrease in salary payable, etc…

Very Important Final Note

  • The Cash Flow from Investing Activities & Cash Flow from Financing Activities
  • Are IDENTICAL within both the Direct & Indirect Cash Flow Statements
  • …only the Cash Flow from Operating Activities are different
02:11

Within this lecture of Financial Statement Fundamentals, you are introduced to Cash Flow from Investing Activities.

Specifically,

Within the Cash Flow Statement

  • Cash Flow from Investing Activities sits in the middle of the statement
  • Functional classifications down the left, (Note: these classifications are NOT accounts, as with other statements), values down the right, with a summed total at the bottom

Contribution to Net Change in Cash

  • The summed total will equate to the actual: cash flow from investing activities

The Formula:

  • Net Change in Cash = Cash Flow from Operating Activities + Cash Flow from Investing Activities + Cash Flow from Financing Activities

What 'story' this section tells:

  • Shows cash inflows and outflows from the business:
  • That tells how the business either investing in non-current income generating assets (outflows) or selling non-current income generating assets (inflows)
  • e.g. a fruit market paying cash for a new shopfront (outflow) “Purchases of PPE”
  • the fruit market selling a delivery truck (inflow) “Sales of PPE”

The Business Life-Cycle through the Cash Flow Statement

  • Cash Flow from Investing Activities: 'Investing in assets that allow them to do what they excel at'
02:11

Within this lecture of Financial Statement Fundamentals, you are introduced to Cash Flow from Financing Activities.

Specifically,

Within the Cash Flow Statement

  • Cash Flow from Financing Activities sits at the bottom of the statement
  • Functional classifications down the left (Note: these classifications are NOT accounts, as with other statements), values down the right, with a summed total at the bottom

Contribution to Net Change in Cash

  • The summed total will equate to the actual: cash flow from financing activities

The Formula:

  • Net Change in Cash = Cash Flow from Operating Activities + Cash Flow from Investing Activities + Cash Flow from Financing Activities

What 'story' this section tells:

  • Shows cash inflows and outflows from the business:
  • That tells how the business raised capital to fund the business (inflows) or returned capital to those who funded the business (outflows)
  • e.g. a fruit market receiving cash from the NYSE (inflow) “Cash proceeds from share issue”
  • the fruit market buying back stock from shareholders (outflow) “Cash payments to owners to acquire shares”

The Business Life-Cycle through the Cash Flow Statement

  • Cash Flow from Financing Activities: 'Raising funds so they can invest in assets that allow them to do what they excel at'
05:13

Within this lecture of Financial Statement Fundamentals, you are introduced to the Life Cycle & Business Health Insights offered by the Cash Flow Statement.

Specifically,

Unique 'Story-Telling' Attributes of the Cash Flow Statement

  • Cash Flow Statement can trace a business from birth, through life till death
  • It can also offer unique insight into the success and ongoing viability of a business unavailable through the income statement and balance sheet

Following the Business Life-Cycle 'Story'

  • In a simple & uncomplicated business world:
  • A business will be born and it raises the start up capital…
  • This will be shown as high cash inflow from financing activities
  • The business will use this new capital to invest in income generating non-current assets…
  • This will be shown via high cash outflows in investing activities
  • With these new assets and and a well executed strategy the business will sell lots of product and control costs well…
  • This will be shown with high cash inflows from operating activities
  • Once management realises their products, industry and business have passed their peak and is in decline, they will decide to wind up the business by selling all the assets…
  • This will be shown by high cash inflows from investing activities
  • With any cash from operating activities left over and all the cash from the sale of assets the grateful shareholders who funded the once startup receive all the cash remaining in the business…
  • This will be shown by high cash outflows from financing activities
  • …and then business is officially wound up.

Did you notice?

  • Financing to Investing to Operations and then back through Investing and finally back through Financing

Following the Business Health 'Story'

Strong Business Health:

  • Generating lots of cash from operating activities
  • Investing & expanding with more assets (cash outflows from investing activities)
  • Returning rewards to the owners of the business (cash outflows from financing activities)

Weak Business Health:

  • More cash outflows from operating activities than inflows
  • Selling assets & contracting to raise cash for operations (cash inflows from investing activities)
  • Continually raising more cash from lenders or equity participants (cash inflows from financing activities)
00:44

Within this lecture of Financial Statement Fundamentals, you review Section 5.

Specifically,

What Was Covered

  • Naming Conventions
  • Like a Video
  • Performance Statement
  • Cash Flow from Operating Activities
  • Direct & Indirect Cash Flow Statements
  • Cash Flow from Investing Activities
  • Cash Flow from Financing Activities
  • and finally, Life-Cycle & Business Health Insights
Section 5 Quiz
11 questions
02:08

Within Action Stations 5,

Review all sections of the Cash Flow Statements

  • Are they generating cash from Operating Activities?
  • Are they investing in assets or selling them (Investing Activities)?
  • Are they raising cash from outside or returning it (Financing Activities)?

Repeat the earlier analysis, this time with the Cash Flow Statement

  • As you did with the income statement and balance sheets,
  • spend time looking into the two companies' cash flow statements both against each other and across time

Business Life-Cycle & Business Health

  • How do the statements fit the business life-cycle and business health guidelines given in the earlier lecture?
  • Does this view change when you look at older cash flow statements from earlier periods?

Begin to Wrap Up Your Analysis

  • While an outsider can probably never have a complete view of a business…
  • …what story can you build of each of your businesses after looking at all three financial statements
  • Does either look like a more appealing investment than the other?
  • What do you need to look out for in the next set of financial statements to confirm or cancel your current assumption?

Could You Do This Again?

  • Now that you have compared two companies,
  • Would you be comfortable analysing a 3rd, 4th, 5th, etc?
  • What would you do the same?
  • What could you improve on and do different?
Section 7: Links between the Financial Statements
02:15

Within this lecture of Financial Statement Fundamentals, you are introduced to How All Three Statements Link Between Each Other.

Specifically,

The Statements So Far…

  • Income Statement
  • Balance Sheet
  • Cash Flow Statement

They link to each other

  • While they are all stand-alone statements
  • And they all offer their own insights into a business
  • They do all link to each other

Income Statement to Balance Sheet

  • Last year's Retained Earnings (last year's Balance Sheet)
  • Plus this year's Net Income (this year's Income Statement)
  • Equals this year's Retained Earnings (this year's Balance Sheet)

Cash Flow Statement to Balance Sheet

  • Last year's Cash Balance (last year's Balance Sheet)
  • Plus this year's Net Change in Cash (this year's Cash Flow Statement)
  • Equals this year's Cash Balance (this year's Balance Sheet)

Definitions are intertwined too

  • The IFRS definitions of Income, Expenses and Profit (Income Statement components) all use definitions
  • based on Assets, Liabilities & Equity
  • and Assets, Liabilities & Equity are all Balance Sheet components
Section 6 Quiz
2 questions
Section 8: 'Notes' to the Financial Statements
Article

Within this lecture of Financial Statement Fundamentals, you are given instructions on how to find some real-world 'Notes to the Financial Statements'.


02:54

Within this lecture of Financial Statement Fundamentals, you are introduced to the 'Notes to the Financial Statements'.

Specifically,

What are 'Notes to the Financial Statements'

  • Supplementary documentation attached to the end of the financial statements
  • Provides extra accounting detail recognising that statements alone are sometimes too brief a summary
  • Hopefully aids in better decision making (i.e. with more detail)

What's Included in the 'Notes to the Financial Statements'

  • Documents many accounting policies
  • Provides more detail (and calculations) into particular line items within the financial statements
  • Lists the required 'disclosures'

Who Includes 'Notes to the Financial Statements'

  • Those that must follow IASB or FASB financial accounting standards
  • Larger and/or listed entities
  • Entities with more external stakeholders
  • Entities with stakeholders that can't otherwise command this type of information

Why Care?

  • Notes are an often overlooked goldmine of company information and their review should be another step along your accounting journey
  • Can offer insight that simply can't be summarised within the 3 pages of the financial statements ('Notes' are often many pages)
  • Allows readers to check-up on how the financial statement numbers were generated (e.g. from policies outlined)
Section 7 Quiz
2 questions
02:05

Within Action Stations 6,

Take the Next Step…

  • You have already conducted your basic financial statement analysis
  • But any expert in this field, will ALWAYS read the Notes to the Financial Statements
  • While a lot of it will be advanced accounting jargon…
  • …do your best to build further insight into your businesses by reading the Notes to the Financial Statements

do the Notes:

  • Clarify any confusion you had in the individual financial statement values?
  • Create a sharper picture from the analysis you have already done?
  • Change any assumptions you had already made?
  • Create a need for further inquiry?
  • Or satisfied any inquiry you had?

At this Stage:

  • With your current financial statement experience, the greatest advantage from reading the Notes is simply seeing for yourself what actually inside the Notes and the level of detail they actually cover…
  • …thus from here
  • You should (from now on) know that you can always refer to these Notes in later financial statement analysis
Section 9: Conclusion
Article

Within this lecture of Financial Statement Fundamentals, you are provided Free Bonus Resources.

Specifically,

PDF eBooks

  • Accounting: Foundation Inputs & Outputs
  • Balance Sheet Basics: From Confusion to Comfort in Under 30 Pages
  • Income Statement Basics: From Confusion to Comfort in Under 30 Pages
01:33

Within this lecture of Financial Statement Fundamentals,

  • you are Congratulated for Completing the Course
  • Thanked for Your Time and Effort in Completing the Course
02:31

If You Got Value From the Course, Please Leave a Review

  • The Udemy Economy is Built on Student Feedback
  • So, if you did get value from this course, please consider sparing a few moments to leave a ‘star rating’ and maybe even a positive comment.
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  • Note: If you did NOT get value from this course…please get in touch, I’m more than happy to help or resolve your concerns
01:40

Within this lecture of Financial Statement Fundamentals, you are introduced to accofina (the business behind the production of this course).

Specifically,

  • Free spreadsheets & eBooks are discussed, as well as
  • Paid iOS Apps, eBooks and other accofina products are discussed


You will also find an attached Product List from accofina, if you are interested.

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Instructor Biography

Mr Axel Tracy, accofina Founder, Accounting Student at UTS & Teacher

"My mission is to put academic accounting & finance knowledge, through easy-to-use technology and easy-to-understand education, in the hands of entrepreneurs, businesspeople & investors."

Axel Tracy has been educated in accounting, finance, economics & IT at two of Australia's leading universities: The University of Technology, Sydney (UTS) and The Australian National University (ANU). He is one of the top students at his current university (UTS) and was invited to the Golden Key International Honours Society and the UTS Honours Society because he had a GPA that placed him in the top 15% of the university (not only the Faculty of Business). From 2011 till 2014 he was employed by UTS to run PASS Sessions for the 2nd-year accounting subject Accounting Standards and Regulations. This involved teaching undergraduate accounting students in a subject that has a high failure rate (Axel scored a High Distinction in this particular subject). Accounting Standards and Regulations is a financial accounting subject that involves Australia's current implementation of the International Financial Reporting Standards. Axel has also been employed by UTS to be a one-on-one tutor in the subject of Accounting for Business Combinations. This is another 2nd-year financial accounting subject involving the accounting treatment of corporate groups, joint-ventures and associates. Axel is happy being a small business operator (and hopes to make this business big) and his first business was launched when he was 25 years old. Axel currently lives in Sydney, Australia, but hopes to live in many cities in the years to come. "A little later than many, I found the reason for coming into this world. It was to become an entrepreneur and spread the accounting and finance knowledge that I had learned since 2003. I greatly enjoy teaching and helping others see the beauty of accounting and finance. I love accounting and finance...and I want you to feel the same way too! And if I can't get you to love them, then I hope my courses can help you take those initial steps in your knowledge journey, so you can be armed with techniques and tools that will set you above the pack."

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