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Financial Statements• What are financial statements?• Who uses it – creditors, shareholders,  mergers, takeovers, valuing ...
Types of Financial                 Statements• Income Statement – period of time• Balance Sheet – double entry, A = L+E• C...
• Importance of Footnotes - contingency liabilities• MD&A – not audited, before Financial Statements,  outlook of the comp...
Financial Statement Analysis•   Purpose of Analysis•   Collect Data•   Process Data – Ratio analysis etc.•   Interpret Pro...
Financial Statements Introduction CFA Level 1 FRA #1
Financial Statements Introduction CFA Level 1 FRA #1
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Financial Statements Introduction CFA Level 1 FRA #1

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Financial Statements Introduction CFA Level 1 FRA #1

  1. 1. Financial Statements• What are financial statements?• Who uses it – creditors, shareholders, mergers, takeovers, valuing security, future forecast.
  2. 2. Types of Financial Statements• Income Statement – period of time• Balance Sheet – double entry, A = L+E• Cash Flow Statement – reconciliation of cash, operating, investing and financing• Statement of Changes in Stockholders’ equity
  3. 3. • Importance of Footnotes - contingency liabilities• MD&A – not audited, before Financial Statements, outlook of the company, liquidity etc.• External Audit Report – reasonable assurance that no errors. It co footnotes also. – Unqualified, Qualified, Adverse or Disclaimer of opinion. Are estimates and assumptions correct?• Under GAAP – Opinion on Internal Control Mechanism to minimize fraud.• Proxy Statements – What are we voting for?• Statement of Comprehensive Income – Not compulsory
  4. 4. Financial Statement Analysis• Purpose of Analysis• Collect Data• Process Data – Ratio analysis etc.• Interpret Process Data – Analyze the results of processing data• Develop and communicate conclusions and recommendations• Follow Up

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