Corporate Finance 101: Financial Statement Analysis & Ratios

A zoom-in, zoom-out, connect-the-dots guide to understanding financial statements, and analysing companies

 

What's Inside

Course Description

This is a zoom-in, zoom-out, connect-the-dots tour of Corporate Finance

Let's parse that

  • 'connect the dots': Financial Statement Analysis gets a bad rep because its hard to connect the nitty-gritty of the financial statements to the company as a whole. This course makes a serious effort to do exactly that.
  • 'zoom in': Getting the details is very important in corporate finance - a small typo, or a minor misunderstanding can cost a company big. This course gets the details right where they are important.
  • 'zoom out': Details are important, but not always. You probably don't care about the nitty gritty of accounting for contingent liabilities if you don't know what accounts payable are. This course knows when to switch to the big picture.

What's Covered:

  • Corporate Finance Introduced: partnerships, proprietorships and the corporation
  • The Agency Problem: How auditors, the board of directors and the capital markets regulator play a role
  • Financial Statements: Balance Sheet, Income Statement, Statement of Comprehensive Income and Cash Flow Statement at exactly the right level of detail
  • Ratios: Five important types of ratios: liquidity ratios, leverage ratios, turnover ratios, profitability ratios and valuation ratios
  • Dupont's Identity: Return-on-equity can be decomposed into 3 elements: profits, asset-leanness and leverage.
  • External Financing Needed (EFN) and the Sustainable Rate of Growth: How fast can a company grow if it chooses to forgo external funding? Every startup should know this, really.
  • Common Accounting Shenanigans: The playbook of financial statement cheats has been studied by auditors and regulators - learn from history so you are not condemned to repeat it.

Case Studies:

Understanding a company entirely from its investor filings

  • Facebook: Fast-growing and profitable, this is the dream stock right now.
  • LinkedIn: Versatile, but struggling to break through - the jury seems out on LinkedIn
  • Twitter: Bleeding red and slowing growth - Twitter seems to be in trouble.

Talk to us!

Mail us about anything - anything! - and we will always reply :-)

What are the requirements?

  • This course assumes no prior knowledge of accounting or finance
  • The investor relations sections of Facebook, Twitter and LinkedIn will be used, but the course will discuss how to access and use these public sites

What am I going to get from this course?

  • Over 43 lectures and 9.5 hours of content!
  • Interpret financial statements - the Balance Sheet, Income Statement and Statement of Cash Flows
  • Parse SEC filings such as the 10K and 10Q to understand the business model of any company entirely from its investor filings
  • Calculate ratios in all major categories: liquidity, leverage, turnover, profitability and valuation
  • Apply Dupont's Identity to see whether a company's stock returns are driven by operational efficiency, asset efficiency or leverage
  • Calculate the sustainable rate of growth at which a company can grow without external financing

What is the target audience?

  • Yep! Business majors and aspiring MBAs
  • Yep! CFA Level I candidates
  • Yep! Entrepreneurs looking to understand basic corporate finance
  • Nope! Accountants - you'll find this course too basic

Class Curriculum

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Your Instructor
Loonycorn

Loonycorn is comprised of a couple of individuals —Janani Ravi and Vitthal Srinivasan—who have honed their tech expertises at Google and Stanford. The team believes it has distilled the instruction of complicated tech concepts into funny, practical, engaging courses, and is excited to be sharing its content with eager students.

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