The document provides an overview of financial intelligence and literacy, including understanding financial statements and analysis, as well as tools for evaluating a company's performance, financial position, and cash flows. It also outlines the roadmap for conducting financial analysis of a company, including examining the business, profit and loss account, balance sheet, cash flows, and key financial ratios. The goal is to help readers develop skills in critically evaluating companies and making better investment and business decisions.

1. Financial
Intelligence

2. Meaning
Skill sets
Understanding the foundation
Understanding the art
Understanding analysis
Understanding the big picture

3. Speak the language – Finance is the language of
the business, common denominator across the
organisation.
Use the language to be taken seriously and to
communicate effectively.

4. Ask questions
Look at financial reports with a questioning
eye

5. Use the information
- to improve cash flow
- assess the company’s results

6. Benefits of financial literacy
Increased ability to critically evaluate companies
Better decision making- ROI / Accounts
receivable
Can I spend more money since my company is
profitable
Strength and balance throughout the organisation
– HR / Mktg/ IT

7. Analysis of Financial
Statements

8. Business Analysis
Types of Business Analysis
Credit Analysis
Equity Analysis
Business Environment and strategy Analysis
Financial Analysis
Prospective Analysis
Valuation

9. Roadmap to Financial Analysis
Business Analysis
Business Environment Analysis – Company’s economic & industry
circumstances, SWOT Analysis , industry analysis
Business strategy Analysis – Company’s business decisions leading
to a competitive advantage , its product mix , cost structure
Company profile and significant events
Company shareholding pattern

10. Company Analysis
Financial performance
Revenues
Profitability
Asset Utilisation
Cash flows
Working capital Management
Stock performance

11. Users of financial statements
Contents of annual report

12. Tools for financial analysis
- Ratios
- Percentage calculations – CAGR / YOY
- Indexation of numbers
- Comparison with relevant data

13. Road map for financial analysis of a company
Business of the company
Shareholding pattern

14. Profit & Loss Account
- Installed capacity & utilisation
- Sales
- Profitability Analysis
- Interest costs
- Changes in accounting policies

15. Balance Sheet
- Share capital
- Reserves
- Tangible net worth
- Contingent liabilities
- Debt composition
- Movement in fixed assets, capital work in
progress & investments

16. Cash flows
- Operating cash flows
- Investing cash flows

17. 1. RPAT
2. ROGNW
3. ROCE
4. ROE
5. Earning per share
6. Price Dividend per share
7. NAV per share
8. OPBDIT
9. OPBDT
10. OPBT

18. Venus Music corner provides is in the business of
providing audio CDs to customers. During March
the accounts were maintained by a professional
accountant On March 31 , the records showed a
balance of Rs.21140 in his capital account. Since
he could not afford an accountant, he starts
maintaining the accounting records himself. He
prepared the statements for the month of April 2010
and was shocked to find that his business had not
fared well. He wants you to review his statements.

19. Profit & Loss A/c for the month ended April’10
Expenses Revenues
Salaries 5600 Investments by owner in business 3000
Electricity 410 Unearned service revenue 600
Advertisement 130
Rent 300
Drawings 4000 Loss for the month 6840
10440 10440
Balance Sheet as on April 30
Liabilities Assets
Creditors 2510 Recording equipment 25500
Service revenue Supplies 2190
earned 12660 Debtors 1210
Capital 14300 Cash 570
29470 29470