Interpreting financial statements
4.1 (123 ratings)
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Interpreting financial statements

Achieve proficiency in interpreting the financial statements of a company. Learn how to prepare financial ratios.
4.1 (123 ratings)
Instead of using a simple lifetime average, Udemy calculates a course's star rating by considering a number of different factors such as the number of ratings, the age of ratings, and the likelihood of fraudulent ratings.
2,455 students enrolled
Created by Gabriel Dragne
Last updated 9/2016
Price: Free
  • 2 hours on-demand video
  • Full lifetime access
  • Access on mobile and TV
  • Certificate of Completion
What Will I Learn?
  • Interpret financial statements - balance sheet, income statement, cash flows statement
  • Prepare cash flows statement for any given company
  • Prepare and interpret 25 world-wide known financial ratios
  • Evaluate the financial health of a company
  • Get acquainted with "must know" finance matters - valuation, mergers and acquisitions, etc
View Curriculum
  • Basic finance jargon is expected
  • Basic mathematical skills
  • Already familiar with Microsoft Excel

This new course starts from the grounds of financial statements and show how they are obtained in the first place. Then it expands on the three main financial statements: balance sheet, income statement and cash flows, by showing their advantages and disadvantages, what they tell and what they hide from the viewer, how they differ from each other and how they are linked. We will focus a lot on the cash implications of financial statements, and by the end of this course we will be able to use cash flows to evaluate the health of a company and we will be able to understand, prepare and analyze “most wanted” financial ratios. Moreover, we will grasp what you need to know on adjacent subjects like weighted average cost of capital, valuation methods, mergers and acquisitions, currency translation and others. Every topic is presented from an industry best practice perspective and is accompanied by a final quiz to test your progress. Besides using small study cases that illustrate particular areas, we will be accompanied throughout the course by a four year period financial data of a study company, for which we will recreate and interpret together the cash flow statements and ratios for three years. It shall be optional, however advisable, that you will continue our endeavor and derive the cash flows statement and ratios, together with their interpretation, for the last year of the analysis. No worries, I will provide permanent assistance should you need additional help to finalize the homework.

If you’re a finance student, an entrepreneur or a finance professional willing to expand on financial statements knowledge, this course if for you, as you will find a lot of new or untold information, perfectly structured and covering all hot topics. If you’re rather new to finance matters, this course if perfect to build a solid knowledge, however you should be at least familiarized with the finance jargon. However, even if you did not experienced financial statements before, the course content does not leave you with missing pieces for the financial statements puzzle. Basic mathematical skills are a prerequisite and you will also need access to a computer with installed Microsoft Excel and basic Excel skills to finalize the analysis.

This course consists of videos lectures and shall require more than three hours of your time, with estimations for the homework analysis to account for another three hours.

I am assured that after taking this course, you will be confident in analyzing financial statements and be able anytime to prepare and interpret the cash flow statement and the financial status for any given company.

Let’s get started!

Who is the target audience?
  • Best suited for beginners and experienced individuals with an interest and minimal knowledge in finance
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Curriculum For This Course
54 Lectures
About the course
1 Lecture 01:13
Course outline and goals
Introduction to accounting
5 Lectures 12:17
Debit=Credit formula

Balance sheet formula (Assets = Liabilities + Equity)

Accounts and trial balance

Case study: Preparation of financial statements

More on preparation of financial statements

Introduction to accounting
16 questions
Balance sheet
6 Lectures 21:53
Introduction to balance sheet




Weighted average cost of capital

Book value versus market value

Balance sheet
25 questions
Income statement
5 Lectures 09:48
Overview of income statement

Segment reporting

A word on tax on profits

Adjusted EBITDA

Common-size and horizontal analysis

Income statement
12 questions
Cash flows statement
15 Lectures 26:31
Introduction to cash flows

Cash flows compared to income statement

Direct versus indirect method for preparing operating cash flows

Direct versus indirect method - case study

Cash flows from operating activities

Importance of operating cash flows

Cash flows from investing activities

Cash flows from financing activities

Reconciliation with cash and cash equivalents in the balance sheet

The benefits of the cash flows statement

Cash flows and the financial health of a company

Relationship between the three lines of cash flows

Introduction to free cash flows

Computation of free cash flows

The drawbacks of the cash flows statement

Cash flows statement
21 questions
Financial ratios
12 Lectures 35:17
Introduction to financial ratios analysis

Types of financial ratios

Relative comparison of ratios

Quality of income ratios

Liquidity ratios

Working capital ratios

Operating cycle

Turnover ratios

Profitability ratios

Return ratios

Leverage (debt) ratios

Cash flows ratios

Financial ratios
17 questions
Other financial matters
3 Lectures 05:32
Currency translation of financial statements

Mergers and acquisitions

Summary of valuation techniques

Other financial matters
3 questions
Case study - Preparing cash flows
7 Lectures 13:06
Preparing operating cash flows

Preparing investing cash flows

Preparing financing cash flows

Complete cash flows picture

Cash flows bridge chart


Case Study - Preparation of cash flows
6 questions

Thank you note
About the Instructor
Gabriel Dragne
4.1 Average rating
121 Reviews
2,455 Students
1 Course
Associate Chartered Banker|Consultant|Financial Reporting

Hi! My name is Gabriel Dragne. I’m 32 years old and I’m from Romania.

I'm a Finance graduate and since 2015, I am an Associate Chartered Banker with the Chartered Institute of Bankers in Scotland and a member of Mensa International. I'm also holding Advanced Diplomas in Financial Management and International Financial Reporting with the Association of Chartered Certified Accountants (ACCA).

Since 2006, I have been working for two international management consulting firms, BDO and PricewaterhouseCoopers. It’s recently that I moved to financial reporting area in Luxembourg. By now, I’ve taken part in more than 100 projects involving mergers and acquisitions, business planning, valuation and management consulting.

I helped many of my friends to successfully pass their ACCA exams by providing them a simple approach to understand examined subjects. They encouraged me to expand my teaching to the world, so here I am :) With a great passion for corporate finance and helping people in their studies, and given my accumulated work knowledge, I will focus on delivering clear, concise and innovative experienced-driven financial studies that will offer students a fast-track but thorough path to expanding their skills.

Above and beyond finance matters, I will happily share thoughts on running, board games, innovative design or any spiritual ideas.

Let's get started!