Track D: Financial Statement Analysis (for CFA candidates)
Track D is an independent course for CFA candidates. It is not endorsed by CFA Institute.
What you will be able to do
- Prepare statements for analysis
- Calculate and interpret key ratios
- Compare peers and value with multiples
- Measure investment return and risk
- Write a recommendation
25 lessons and projects. Short, practical steps in a spreadsheet, with real Excel for the features a browser cannot run.
Outline
Module 1: Preparing the statements
- Standard template for analysis
- Common-size income statement
- Common-size balance sheet
- Multi-year trend analysis
Module 2: Ratios
- Profitability: margins, ROA, ROE
- DuPont analysis
- Liquidity ratios
- Efficiency ratios and cash conversion cycle
- Leverage and interest cover
- Cash flow ratios and quality of earnings
Module 3: Valuation and comparison
- Peer comparison table
- Multiples: P/E, EV/EBITDA
- Building enterprise value
- Credit scoring and Altman Z-score
- Adjusting for one-off items
- Analysis dashboard and conclusions
Module 4: Investment and portfolio analysis
- Holding-period and annualised returns
- Arithmetic vs geometric average return
- Risk: standard deviation of returns
- Risk-adjusted return: the Sharpe ratio
- Beta with SLOPE, and the CAPM required return
- Two-asset portfolio: return and risk
- Bonds: price, yield and duration
- Valuing a share with the dividend discount model
Capstone: compare two companies and write a recommendation
Completing it earns a certificate of completion. It is not an accreditation or a professional qualification.
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