The Art of Reading Financial Statements – Practitioner Level

Financial statements appear complex and lengthy; their reading requires judgment and practice; people do not know where to start reading and what to look for, or read financial statements in a linear/sequential way without being able to grasp the main elements, even red flags related to the company. This course intends to teach you the preliminary reading keys to read, understand & digest financial statements & financial reports.

As Warren Buffett stated, if you want to become a better investor, you have to understand the language of business, which is accounting: “You have to understand accounting and you have to understand the nuances of accounting. It’s the language of business and it’s an imperfect language, but unless you are willing to put in the effort to learn accounting – how to read and interpret financial statements – you really shouldn’t select stocks yourself.“

I took the approach of writing this course by reflecting on what I was missing from my teachers & professors in my accounting & corporate finance classes. This course uses a different approach to reading financial statements and quickly grasping the essence of the company being analysed.

After taking the course, you will be able to :

1. Identify & understand accounting standards used IFRS, US GAAP or Local GAAP
2. Differentiate between 3 main types of financial statements (balance sheet, cash flow & income statement)
3. Understand the fundamental accounting principles like going concerned, fair valuation, the focus of prudence, accrual vs cash accounting, etc.
4. Understand & identify main corporate governance elements, including corporate governance 1- or 2-tier models, the role of shareholders & board of directors.
5. Understand the role of the statutory auditor, being able to identify if a report is audited or unaudited; if audited, determine who the statutory auditor is, the tenure of the statutory auditor, comments about the statutory auditor’s independence/conflict of interest / related fees and audit opinion.
6. Understand the scope of the reporting company’s consolidation (& unconsolidation) and the four methods of how subsidiaries can be (or not) consolidated into financial statements.
7. Do a vertical analysis of the balance sheet and understand the main profit-generating assets and the sources of capital in the balance sheet.
8. Identify sources of capital, including long-term debt and its related schedule, cost to service long-term debt including interest coverage ratio, equity capital source including potential retained earnings.
9. Deepen understanding of value creation for shareholders by understanding ROIC & WACC.
10. Understand the company’s profitability by analysing revenue segments (if available) & cash-generating assets, and understand operating cash flow & working capital vs financing & investing cash flows.
11. Read earnings information, including EPS, NOPAT, EBITDA, EBIT & net income.

The Art of Reading Financial Statements – Practitioner Level

The course also contains many practical examples, as in all my classes. We will practice & discuss the financials of companies like Kellogg’s, Mercedes, Telefonica, 3M, Evergrande, Alphabet, Meta, Microsoft, Unilever, Wells Fargo, Wirecard, Costco, and many others.

At the end of the training, I will show you the complete process of how I read the financial statements for three companies (Vonovia, Qurate, and Skywest Airlines) so that you can exactly see and hopefully replicate how I grasp the essence of companies that are not known to me at the beginning.

Last, adult education without practice, knowledge checks, and assignments is only entertainment. For that specific reason, the course contains 10+ assignments to practice yourself as homework and share after completion with me for review if you wish.

Wishing you a lot of success taking this training and hope it will make you grow as an investor, analyst, or corporate professional. Thanking you as well again for selecting my course

With thanks

Candi