What you'll learn

Analyze financial statements using practical tools and examples from company filings
Perform earnings, balance sheet and cash flow quality analyses by answering questions, detecting red flags, using common size analysis and ratio analysis
Understand how financial statements can be tweaked to meet operating targets
Read and interpret the 10-K

Course content

6 sections • 45 lectures • 4h 33m total length

Introduction3:54
Course introduction, instructor background and intended audience
Importance of Financial Statement Analysis5:46
Learn the definition of financial statement analysis, why it is important and who can benefit from it
Financial Statement Analysis Process4:23
The four-step financial statement analysis process I recommend.
Earnings Quality Analysis Example4:31
An example of how to separate core earnings from non-core earnings

Introduction to Earnings Quality Analysis2:26
Introduction to and the usefulness of earnings quality analysis
Earnings Quality Analysis Step 1: Are Earnings from the Core Business?8:53
In this lecture I will demonstrate how to answer the first question from Step 1 of Earnings Quality Analysis: Are Earnings from the Core Business?
Earnings Quality Analysis Step 1: Are Earnings Recurring or Non-Recurring?5:59
In this lecture I will demonstrate how to answer the second question from Step 1 of Earnings Quality Analysis: Are Earnings Recurring or Non-recurring? The lecture includes an example on how changes in Ford Motor Company's accounting for pension expenses impacted the company's earnings.
Earnings Quality Analysis Step 1: Are Earnings Subject to Management Judgment?10:38
In this lecture I will demonstrate how to answer the third question from Step 1 of Earnings Quality Analysis: Are Earnings Subject to Management Judgment?
Earnings Quality Analysis Step 1: Is the Company Converting Earnings to Cash?3:51
This is the first of a two-part lecture on the fourth question from Step 1 of Earnings Quality Analysis: Is the Company Converting Earnings to Cash?
Earnings Quality Example: Is the Company Converting Earnings to Cash?5:16
This lecture presents an example using Twenty-First Century Fox to answer the question of whether the company is converting its earnings to cash?
Earnings Quality Analysis Step 2: Common Size Income Statement5:48
Learn how to do a common size analysis of the income statement.
Common Size Income Statement Example5:56
A common size analysis of Vertex Pharmaceutical's 2015 income statement.
Earnings Quality Analysis Step 3: Ratio Analysis6:27
An example of a common size analysis using Vertex Pharmaceuticals
Earnings Quality Analysis Step 4: Putting It All Together3:34
Earnings quality analysis conclusion: combining steps one through four.

Introduction to Balance Sheet Quality Analysis3:24
Introduction to balance sheet quality analysis and and how to distinguish between a high-quality and a low quality balance sheet.
Introduction to Balance Sheet Quality Analysis Step 12:29
Balance Sheet Quality Analysis Step 1: Questions 1 and 25:17
Answer questions one and two of Step one of balance sheet quality analysis: Are the assets and liabilities fairly stated and are there hard-to-value assets and liabilities?
Balance Sheet Quality Analysis Step 1 - Questions 3 and 45:28
Answer questions three and four of Step one of balance sheet quality analysis: Do asset maturities match liability maturities and how liquid/leveraged is the balance sheet?
Balance Sheet Quality Analysis Step 2: Common Size Balance Sheet9:55
Balance sheet common size analysis using an example from Vertex Pharmaceuticals.
Balance Sheet Quality Analysis Step 3: Ratio Analysis4:41
Balance Sheet Quality Analysis Step 4: Putting It All Together3:23
Balance sheet quality analysis conclusion: combining steps one through four.

Introduction to Cash Flow Quality Analysis3:31
Introduction to cash flow analysis and understanding the different types of cash flows
Cash Flow Quality Analysis Step 19:02
Answer questions related to cash flows: are cash flows from the core business, are cash flows recurring or non-recurring, and are there adjustments to make to free cash flows.
Cash Flow Quality Steps 2 and 3: Ratio Analysis and Putting It All Together4:52
Ratio analysis for operating cash flows and wrap up of cash flow quality analysis.

Introduction to Reading and Interpreting the 10-K5:53
Overview of the four parts and main items in the 10-K.
10-K Items 1A Risk Factors and Item 6 Selected Financial Data7:32
Learn how to identify significant risks and analyze financial data. Includes examples from Level 3 Communications and HP Inc.
Item 7: Management's Discussion & Analysis - Part 18:09
The first of two lectures on MD&A. This lecture covers the results of operations and liquidity resources sections of the MD&A, and includes examples from Opko Health's 2015 10-K.
Item 7: Management's Discussion & Analysis - Part 27:53
The second of two lectures on MD&A. This lecture covers the critical accounting estimates and contractual obligations and commitments sections of the MD&A, and includes examples from Popular Inc.'s and Opko Health's 2015 10-Ks.
Item 8: Financial Statements and Supplementary Data3:49
This lecture is an overview of Item 8 - Financial Statements and Supplementary Data.
Item 8: Financial Statements - Revenue9:55
Learn what to look for when analyzing revenue, including an example from Boeing's 2015 10-K.
Item 8: Financial Statements - Stock-based Compensation9:11
Understanding and analyzing stock-based compensation, including an example from Oracle's 2015 10-K.
Item 8: Financial Statements - Pensions7:43
What to look for when analyzing pensions.
Item 8: Financial Statements - Income Taxes10:12
This is the first of two lectures on how to analyze income taxes, and includes an example from IBM's 2015 10-K.
Item 8: Financial Statements - Income Taxes Part 25:26
This is the second of two lectures on how to analyze income taxes.
Item 8: Financial Statements - Mergers & Acquisitions6:28
Learn what to look for when analyzing mergers and acquisitions.
Item 8: Financial Statements - Intangible Assets4:39
How to analyze intangible assets.
Item 8: Financial Statements - Financial Instruments7:40
What to look for when analyzing financial instruments.
Item 8: Financial Statements - Receivables3:55
What to look for when analyzing receivables.
Item 8: Financial Statements - Inventories5:47
What to look for when analyzing inventories.
Item 8: Financial Statements - Property, Plant & Equipment5:59
What to look for when analyzing property, Plant and Equipment.
Item 8: Financial Statements - Reserves6:33
Understanding the different types of reserves and how to analyze reserves.
Item 8: Financial Statements - Earnings per Share10:00
How to estimate the impact of share repurchases on earnings per share. Includes an example showing the impact of IBM's 2015 share repurchases on the company's earnings per share.
Other 10-K Items5:47
Discussion of other important 10-K items.
Conclusion3:54
Course recap and conclusion.

Requirements

No additional materials are needed for the course
Have a basic understanding of the income statement, balance sheet and cash flow statement. No need to be an accounting expert.

Description

This course covers financial statement analysis using real examples from financial statements. I developed the course from my experience doing financial statement analysis for clients in various accounting and financial consulting roles over the years.

The course is geared towards anyone interested in improving their financial statement analysis skills. Seasoned investors on Wall Street, individual investors, students, bankers and others looking for a practical way to analyze financial statements can benefit from this course.

The course teaches how to assess earnings, cash flow and balance sheet quality using practical examples. It explains how the types of questions to answer when analyzing financial statements, how to detect red flags, how to use common size size and ratio analysis to uncover hidden risks, and how to read and interpret the 10-K.

Learn what to look for when analyzing financial statement items such as revenue, inventories, income taxes, pensions, stock-based compensation, stock buybacks, reserves, among others. The course includes a list of red flags you can use in your financial statement analysis.

The course is a video format utilizing PowerPoint slides. No material is needed for the course, except writing materials if the student wishes to take notes.

This course is designed to be different from other financial statement analysis courses. While there will be some overlap, the areas I focus on in this course are based on information gleaned from actually working with investors and and other clients, and getting to understand the areas they are most concerned about. The real world experience applied to this course is what differentiates it.

Who this course is for:

This course can help both students who want to get started in financial statement analysis and experienced analysts and investors either seeking to brush up on their accounting analytical skills or learn something new. Students should have at least a basic understanding of the three main financial statements.
Investment professionals
Accounting and financial analysts
Individual investors
Accounting, investment, finance and business students
This course is not intended for those who want to learn the basics of accounting such as debits and credits

What you'll learn

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Course content

Course Introduction and Financial Statement Analysis Overview4 lectures • 19min

Earnings Quality Analysis10 lectures • 59min

Balance Sheet Quality Analysis7 lectures • 35min

Cash Flow Quality Analysis3 lectures • 17min

Section 5 - Financial Statement Analysis Conclusion1 lecture • 7min

Section 6: Reading and Interpreting the 10-K20 lectures • 2hr 16min

Requirements

Description

Who this course is for: