Business Finance and Interpreting Financial Statements

Course Introduction

Understanding financial statements is an essential skill for anyone involved in assessing business performance, financial strength or commercial risk. Whether analysing a potential client, supporting underwriting decisions or evaluating investment opportunities, the ability to interpret financial information provides valuable insight into how a business operates and performs.

This course builds on core business finance concepts and develops the practical skills needed to interpret financial statements, assess financial health and evaluate business performance. Through worked examples, discussion and case studies, participants will learn how to analyse company accounts, apply key financial ratios and understand the financial characteristics that influence business value and risk.

This course can be delivered as 2 x 3-hour sessions or 1 x full day session.

Who should attend

This course is suitable for professionals who already have a basic understanding of business finance and wish to develop their ability to interpret financial statements and assess business performance. It is particularly relevant for brokers, underwriters and professionals involved in financial analysis, risk assessment or commercial decision-making.

Course Objectives

By the end of the session, participants will be able to:

• Describe the cash flow in a commercial firm to differentiate between cash v profit
• Describe the sources of funding and the implications of each
• Explain the purposes of and interpret financial statements: reading between the lines
• Apply the key ratios to measure financial performance, resilience and the critical indicators of a company’s health
• Explain capital gearing: the benefits and the inherent risks
• Introduce the tools of discounted cashflow/net present value/internal rate of return.
• Outline the alternative ways of company valuation, and when/where each would be most appropriate.
• Extend ratio analysis to earnings per share; price/earnings and market capitalisation
• Draw out the financial characteristics material to different industries, when valuing a company

Course Structure

• Part 1
  • We will lay the groundwork by demystifying finance terminology and exploring the fundamental principles of financial analysis. From understanding the sources of business capital to deciphering financial reports, you will gain the essential knowledge to navigate the complexities of finance with confidence.

• Part 2
  • We go deeper into financial statements and critical indicators of financial health with some analytical tools. Through case studies and discussions, you will explore the key financial metrics and assess their impact on diverse business models.

Course approach

It blends input sessions, discussion and short practical exercises, with a progressive case study of a real company to enable learning by application.

Participants receive a set of stand-alone business finance notes which are written to support the course and for reference afterwards. Support notes and exercises are sent out as a pdf and participants beforehand. The exercises are used in hard copy during the session.