Understanding Financial Statements

Overview/Description
 This course introduces the components of each financial statement and describes the relationships between financial statements.

Target Audience
 This course is targeted specifically for business managers, financial professionals, and other business professionals who have the need to understand financial statements.

Expected Duration
2.5 hours

Lesson Objectives:

Income Statement Components

  • recognize the importance of using the Income Statement components for determining a company's profitability.
  • identify the individual types of revenue in an Income Statement.
  • select the types of expenses in an Income Statement that would affect a company's profitability.

    • Balance Sheet Components

  • recognize the importance of understanding the Balance Sheet as a primary financial statement for analyzing a business' financial position.
  • identify the types of assets reported in a Balance Sheet.
  • identify the relationship between components of the Balance Sheet for given examples.

    • Cash Flow Statement Components

  • recognize the value of using a Cash Flow Statement for analyzing a company's ability to repay debts.
  • select activities that should be reported in the Operating Activities section of the Cash Flow Statement.
  • select activities that should be reported in the Investing Activities section of the Cash Flow Statement.
  • select activities that should be included in the Financing Activities section of the Cash Flow Statement.

    • The Relationships between Financial Statements

  • recognize the purpose of analyzing a Cash Flow Statement, an Income Statement, and a Balance Sheet.
  • identify the connection between the Income Statement and Balance Sheet.
  • identify how a Cash Flow Statement is related to an Income Statement and a Balance Sheet.

    • Course Number: FIN0111