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Analysis of the balance sheet

(current and pro forma balance sheet)

Step 1 Analysis of the balance sheet

(current and pro forma balance sheets)

• Determination and analysis of assets and liabilities
• Analysis of accounts payable and receivable
• Receivables management (ratio of turnover, analysis of clients’ solvency and reserves of unpaid bills).
• Current assets financing (Accounts payable, торговая кредиторская задолженность. Short-term loans, letters of credit, bank acceptances, credit line (overdraft). Financial cycle.
• Problems and implicit possibilities of the balance sheet.

Step 2 Income and Loss Statement

·        Classification of costs

·        Contribution margin, financial safety margin, transaction leverage

·        Types of income. Measurement of income. Methods of profit calculation

·        Amortization and methods of applying of amortization

·        Types of taxes and methods of tax charge

Step 3 Cash flow statement

·        Analysis of major figures

·        Evaluation of the company’s condition based on major figures

Step 4. Calculation of the profitability ratio of the equity capital

•     Three major factors ROE

·        Sales profitability (return on assets, gross margin)

·        Asset turnover

·        Capital leverage and methods of application.

Step 5. Analysis of investment project effectiveness

• Payback method

·        Internal rate of return

·        Calculation of money value

·        Net present value. NVP and creation of cost

·        Benefits/Expenses ratio

·        Break-even point.

Step 6. Basics of financial planning

• Sensitivity analysis
• Simulation
• Cash flow forecasting

Step 7. Hands-on training

·        Illustrating of the course by giving specific examples

·        Filling in work sheets. Work in groups. Brainstorm. Analysis.

·        Recommendations.