Overview
-
Take a deeper dive into the world of financial accounting. Learn about financial ratio analysis, forecasting financial statements, cash flow analysis, and more.
Syllabus
-
Introduction
- Financial analysis, cash flow analysis, and valuation
- Who uses financial statements?
- Review of the balance sheet
- Review of the income statement
- Review of the statement of cash flows
- What is financial ratio analysis?
- Comparing financial statements across time
- Comparing financial statements across companies
- Common-size financial statements
- Gunpowder, the French Revolution, and the DuPont framework
- Ratio analysis
- Return on equity
- DuPont framework
- Current ratio
- Debt ratio
- Price-earnings ratio
- Real world: Apple vs. Google vs. Microsoft
- Nike, McDonald’s, and the operating cycle
- The operating cycle
- Days sales in inventory
- Average collection period
- Days purchases in payable
- Real world: Procter & Gamble
- Jim Stice operating cash flow matrix and a wife named Kay
- Analyzing cash flows
- What does it tells us?
- Cash flow patterns
- One method of analysis
- Two methods for presentation
- Forecasting the financial statements of Home Depot
- What causes financial statement amounts to change?
- The initial assumptions
- Forecasted income statement
- Forecasted retained earnings
- Forecasted assets
- Forecasted liabilities and equity
- The intersection of accounting and finance
- Value is based on expectations about the future
- Overview of the market approach: Using multiples
- Overview of the cost approach: Depreciated replacement cost
- Overview of the income approach: Discounted cash flow
- The Microsoft IPO
- Simple illustration: Valuation of 69 Blaine Avenue
- Earnings multiples
- Equity multiples
- Sales multiples
- Other multiples: The case of WhatsApp
- Buying the Hong Kong car?
- Basic idea: Cash flows, timing, and risk
- Risk and interest rates
- Forecasting cash flows
- Simple discounted cash flow valuation example
- Brief McDonald's history
- McDonald's: The numbers
- McDonald's: Dividend-based valuation
- McDonald's: Earnings multiple
- McDonald's: Discounted cash flow valuation
- McDonald's: Lessons from a comparison of the models
- Next steps
