Released
3/5/2019- Determine the parts of an income statement.
- Review the different parts of a statement of cash flows.
- Analyze common-size financial statements.
- Define ratio analysis.
- Explain current ratio.
- Distinguish the steps in the operating cycle.
- Examine how to determine the day’s sales in inventory.
- Explore how to calculate the average collection period.
- Identify the fundamentals of analyzing cash flows.
- Explore business valuation while examining the intersection of accounting and finance.
Skill Level Beginner
Duration
Views
- Hi I'm Jim Stice, I'm a professor of accounting at Brigham Young University, this is my brother Kay. - I am also a professor of accounting at Brigham Young University, we are an accounting family. - Absolutely, we love numbers, we love financial statements, and we love using financial reports to gain insights into how companies work. - This course introduces you to the methods of financial ratio analysis that allow you to use a company's financial reports to identify the company's strengths and weaknesses. - [Jim] You can use a company's financial reports to identify areas for improvement as well as areas of risk. - [Kay] Financial ratio analysis is the process of using the relationships among a company's financial numbers to gain insights into that company's operations. - Now in this course, we also address the important topic of cash flow analysis. - Many good businesses have died a premature death because they didn't properly manage their cash flow. - Loans, employees, suppliers, and taxes are paid with cash. A company can't live very long when it doesn't properly manage it's cash flows. - We also provide an introduction to business valuation. - Business valuation brings together the fields of accounting and finance. - From accounting we obtain data that are important inputs into many valuation models. These data include net income, sales, and cash flows. - [Jim] From finance we draw from the concepts of risk, returns, and the time value of money. - Also in this course we introduce two basic valuation approaches. Valuation using multiples and the more challenging valuation using discounted cash flow analysis. - And in a Capstone example, we will use several different models to estimate the value of McDonald's. - Before taking this course you might consider taking our Financial Accounting 1 course here in LinkedIn Learning. That course introduces you to the processes and financial statements that are the foundation of financial accounting. - But with that said, we've designed this Financial Accounting Course 2 to be self contained and we carefully explain any accounting terminology that we use. - So let's go! - Let's go!
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Introduction
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1. Quick Review of Financial Statements
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Review of the balance sheet4m 49s
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2. Analyzing Financial Statements
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3. Ratio Analysis: DuPont Framework
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Ratio analysis3m 27s
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Return on equity2m 26s
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DuPont framework4m 52s
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Current ratio4m 12s
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Debt ratio4m 10s
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Price-earnings ratio3m 39s
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4. Ratio Analysis: The Operating Cycle
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The operating cycle3m 46s
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Days sales in inventory3m 49s
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Average collection period3m 31s
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Days purchases in payable3m 28s
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Real world: Procter & Gamble3m 21s
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5. The Statement of Cash Flows
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Analyzing cash flows2m 22s
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What does it tells us?4m 21s
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Cash flow patterns2m 32s
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One method of analysis4m 37s
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Two methods for presentation4m 14s
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6. Forecasting Financial Statements
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The initial assumptions1m 48s
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Forecasted retained earnings2m 25s
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Forecasted assets2m 42s
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7. Intro to Business Valuation
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8. Valuation: Using Multiples
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The Microsoft IPO3m 46s
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Earnings multiples3m 32s
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Equity multiples3m 38s
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Sales multiples4m 23s
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9. Valuation: Free Cash Flows
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Buying the Hong Kong car?2m 26s
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Risk and interest rates3m 44s
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Forecasting cash flows4m 22s
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10. Valuation: Comparing Models
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Brief McDonald's history2m 53s
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McDonald's: The numbers2m 41s
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Conclusion
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Next steps3m 4s
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Video: Financial analysis, cash flow analysis, and valuation