"FINANCIAL ANALYSIS"

INTRODUCTION

The Financial Analyst Course offered by "365 careers" is developed in-house, is engaging, and
refreshingly interactive. The company's courses have been taken by more than one million students
from all around the world. People working at world-class organizations like Apple, and PayPal have used
"365 careers" to enhance and develop their skills.

I had an opportunity to take the course in my quest to enhance my knowledge about finance in general
and the fundamentals of financial analysis in particular. One of my colleagues at the firm told me about
the course and spoke highly of the impact it had on his understanding of the subject and performance. I
had a transformative experience throughout the course and it has enabled me to understand and apply
core financial analysis principles in my practice. I have since become more confident and proficient and
this has translated into enhanced earning and career progression. I am writing a detailed description of
the course in an attempt to motivate learners who are facing a similar predicament. It is an exhaustive
summary of the course content and hopefully, it helps you decide in favor of taking the course and reap
maximum benefits.

The course covers Excel, financial modeling, accounting, financial statement analysis, financial analysis,
finance, capital budgeting, and presentations. Everything being learned has a practical application and is
one of the best ways to take and cover the subject matter. One can begin by simply downloading the
required course materials.

COURSE CONTENTS

Microsoft Excel

Starting with Microsoft Excel, which is the world's leading software for Office. MS Excel is a commercial
spreadsheet application that is produced and distributed by Microsoft. It features the ability to perform
basic calculations, use graphing tools, create pivot tables, and create macros, among other useful
features. A beginner's guide to MS Excel is also attached to the course content which helps to explain
data entry techniques in excel along with how to make your spreadsheets look professional. From
inserting, deleting, and modifying rows and columns to working efficiently using copy, cut, and paste, all
are covered within the course is learner friendly and comprehensive.

Taking this course has allowed me to do more with my sales data with excels text to columns feature.
Easily Printable documents can be made through this. Wrapping text and using freeze panes to handle
large datasets. A quick introduction to excels pivot tables can be found in the course materials. Initial
formatting is the key to creating professional-looking spreadsheets. Moreover, it teaches different
techniques like the use of macros, faster scrolling, and custom number formatting. The use of macros
enables time efficiency. This can also be done through various excel shortcuts predefined in the course.
Apart from these, there are certain functions unique to excel like sum, count, average, Concatenate, etc.
Based on their properties functions can be divided into basic, conditional, and lookup functions.

Spreadsheet errors can be trapped and found through the Iferror function. Flexible financial models can
be created with "choose". Perform Sensitivity Analysis with Excel's Data Tables Functionality. Another
important financial function that I learned to perform through excel is discounting cash flows and
calculating the Internal Rate of Return (IRR). These features can be mastered through this course.

To build a profit and loss statement from scratch, it is first important to understand Your Data Source
Before You Start Working on It. Creating a code will help to organize your data and work efficiently with
it, minimizing errors. It covers:

Learning How to Create a Database.

Using Lookup Functions (VLOOKUP) to Fill the Database Sheet.

Using "Sumif" to Complete the Database Sheet.

Using Index & Match as a Substitute of VLookup.

Mapping of the Rows in the Database Sheet.

Building the Structure of the P&L Sheet.

The following methods facilitate the building of a profit and loss statement as well as the practical
application of the techniques taught earlier in the course. Mistakes can be identified by "Countif", and
Growth rates can also be calculated.

Another feature of excel is the building of charts. Charts help to make your presentation and data more
attractive and presents it in an easy-to-understand manner. From creating bridge charts to representing
trends with sparklines, all is made easy through excel. Data can easily be visualized by charts.

After charts tables are also an important part of excel. Pivot tables in general provide a dynamic and
interactive way to present data. Before creating a pivot table, it is important to choose row and column
parameters. Design and layout of pivot tables is explained in this course in a simple way. Additional
techniques for pivot tables are also part of this course which helps to ease your work.

Slicers in Excel are software filters used along with excel tables or pivot tables over a large amount of
data. Not just filtering out the data, but slicers also help you with an easy understanding of the
information being extracted and displayed on the screen. You can add any number of slicers to a pivot
report. When you add multiple slicers, each of them plays a role in telling the pivot table what sub-set of
data to use for calculating the numbers. Slicers and GETPIVOTDATA are a great tool that can improve the
working of any firm

FMCG Modeling is a world-class technique that allows you to elaborate large quantities of data. FMCG
industry involves the production and sales of non-durable products like toiletries, processed foods, and
soft drinks. ERP which stands for Enterprise Resource Planning is an integrated software solution used by
companies to collect, store, and manage data from business activities. They are like data warehouses
which collect the entire information about a firm. Popular ERP system providers include ORACLE.SAP
data extraction allows to download such information in excel and is used by financial analysts. Usually
they divided into two parts: the left part containing the descriptive information whereas the right
containing the financial information. Depending on the structure of the data that is extracted from the
SAP we can build useful reports. Formulas are added in the spreadsheets to automate calculations and
make it easier for analysts. To improve your spreadsheet even further slicers can be combined with
GetPivotData to become a powerful tool. All in all, GetPivotData and slicers allow you to build flexible
and user-friendly reports. These reports provide a complete picture of the company you are analyzing.

Financial modeling is a part of excel. Financial modelling in Excel refers to tools used for preparing the
expected financial statements predicting the company's financial performance in a future period using
the assumptions and historical performance information. Through the mapping of financials, we can
create an output P&L sheet. Percentage variations are a useful tool that facilitates the understanding of
the dynamics of a business so it's useful to add them to a spreadsheet. Once historical figures have been
added to your sheets, it's a good practice to add forecast periods. One can build a flexible model
through Choose & Match and Vlookup & Columns.

Accounting is one of the most important skills for people pursuing a career in finance. It is an
information science that is used to collect and organize financial data for organizations and individuals.
It helps u to understand if a business is profitable. It gives you an idea of the company size, it helps you
to use the past to act in the present and change the future however its essential to understand it
properly. In other words, accounting is a must for good financial analysts. Bookkeeping is where it all
starts. Modern society cannot function without it therefore it is fundamental for corporations, banks,
investment funds and even individuals. Financial accounting is a set of financial reports a company
prepares for individuals which are outside the organization. Such reports enable outsiders to gain an
understanding about the company's business about how many sales the company made this year etc.
Moreover, financial reports will show what the company owns and owes. To conclude it allows outsiders
to make a reasonable judgement about a company's business. There are different types of accounting
based on regions. Every country has its own set of accounting principles however this makes it expensive
and difficult to coordinate for international companies. For this reason, the international accounting
community came to an agreement and the product of their work became IFRS (International Financial
Reporting Standard).

Financial accounting consists of three main statements are those are:

P&L (Profit and Loss) Statement:

Balance Sheet:

Cash Flow:

To begin with, the main income statement items that a firm will register in its operation is revenue. It
represents the inflow of main economic resources. After revenue, cost is also a big factor. To fuel its
sales and produce the goods it delivers to clients, the firm must sustain certain costs. The most common
expenses are the cost of goods sold, the administrative costs and taxes. Other costs include promotion
and advertisement. Income taxes are paid by both individuals and organizations to fund the government
and allow it to server public interest. In the U.S.A, companies must pay both federal and state tax which
is based on their business income.

Most businesses own assets that are used for several years. It's clear that fixed assets won't be used
indefinitely. Every year the value of fixed assets decreases, and we must account for that. The portion
that is being used up is called depreciation. Year after Year the asset becomes older and loses some of
its market value and this depreciation is shown as an expense in the income statement. Next up is the
balance sheet.
A balance sheet is a statement that shows what a company owns and owes. Every balance sheet has two
sides. One side contains the company's assets whereas the other has its liabilities. Apart from assets and
liabilities, equity is another part of balance sheet which is what the firms owes to shareholders. The firm
doesn't pay back the shareholders however it does give a fair number of dividends if the business
succeeds over the years. Equity is made up of Paid-in Capital which represents the firm's starting capital,
Retained Earnings and Current Profit.

Accrual accounting is a financial accounting method that allows a company to record revenue before
receiving payment for good or services sold, or expenses are recorded as incurred before the company
has paid for them. The idea that revenue and cost should not be registered when cash is exchanged but
should be registered when revenues are earned, and costs are incurred is called accrual accounting and
this is how all modern accounting systems function. A company recognizes revenue when it is realized,
when it is earned no matter when it received the payment. Hence getting cash and recognizing revenues
are two different things. The main criteria for revenue recognition are as following:

If the work is done

If the seller company receives a valid promise of payment

Revenue Recognition is important, this is because higher revenue results in higher profits, higher
valuation as easier access to financing. Therefore, it is easy to conclude that higher revenues are
preferable. Expenses are recorded during the period in which they incur regardless of when the transfer
of cash occurs. Expenses should be recognized in the P&L in the same period as revenues to which they
relate

Generally, there are two P&L formats and those are single and multistep. A single step P&L lacks
intermediatory results like gross profits, operating income and so on. It simply subtracts total cost from
total revenue and gives us net income. The other option "multistep" allows us to see the difference
between revenue and gross profit. It isn't affected by interest and extraordinary items.

The number of sales a company makes is a measure of how large its business is and how it performed
compared to previous periods. Financial authorities ensure that a company reports its revenues in a
consistent and unbiased manner. Revenue reporting affects the decision making of internal and external
stakeholders. There is a specific set of rules for managing expense recognition which companies cannot
decide on their own because without supervision a temptation would rise to manage recording of
expenses in a period which is more favorable for the company's management. When considering a firms
assets and liabilities we should also talk about how these values are recorded how these values are
recorded in the balance sheet. Fair value of an asset is determined by looking at comparable
transactions on the market however this isn't allowed for all types of assets.it is usually used for real
estate, brand value and trademarks etc.

Financial statements are written records that convey the business activities and the financial
performance of a company. They show the development of a company's business throughout the
proceeding period which could be quarterly or yearly. Listed firms must provide a financial report every
three months. In the United States the annual report required by securities and exchange commissions
is called form 10-K. It is prepared once per year and indicates how the company performed in the year.
They are important for investors as they are a great source of information. It includes the history of the
company as well as organizational structure, executive compensation, equity, and subsidiaries. The
finance department is responsible for preparing finance statements. Every company has employees who
are responsible for gathering its financial information and using it in order to produce useful financial
statements. These financial statements are prepared by a specific set of rules or accounting principles.
To ensure that companies follow their guidelines and do not manipulate their financial statements,
auditing firms play their role. The benefit of an audit is that it provides insurance that the management
has provided a true and fair view of the company's financial performance.

Subtotals is the sum of two or more items. They are summed because they belong to the same category.
The sub totals are then summed with other sub totals to find the total. In order to calculate the year-on-
year growth such indispensable tools are used for financial analysis. The first thing we learnt about
financial statement analysis that it wud allow us to improve our understanding of a given business. Now
we will understand how this analysis is performed. A good understanding of financial statements is
based on deep understanding of the typical transactions performed by the company. This has a direct
impact on how we analyze financial situations. Therefore, only a good understanding of the company's
underlying business would allow us to perform a meaningful analysis. Financial statements also have
their own formats. By formats we refer to different ways of arranging items inside a balance sheet.
However, there is no rule to organize financial statements. Financial statements can be analyzed
through either horizontal or vertical analysis.

The core principle of finance is that money today is more valuable than money tomorrow. The rational
principle behind this is that money we receive today has a potential earning capacity. This is why people
prefer receiving money sooner than later and hence timing is one of the most important topics when we
talk about money.

Interest rate is the cost of borrowing or the cost that one pays for the rental of funds. There are
different types of interest rates in our lives like mortgage, student loans, investment loans etc. Interest
rates play an important role in economy for several reasons. It is also true that interest rates are
influenced by the economy. During a period of stable growth people are less concerned with depositing
their money and hence why banks apply a lower interest rate with their loans. Every type of interest
rate can be disaggregated as the sum of 5 components. The building block of all interest rates is the real
risk-free rate. The second component is expected inflation and so on. Libor stands for London Interbank
Offered Rate and is the benchmark rate used by large banks worldwide in order to determine the cost of
money. It is based on five currencies:

USD (United States dollar)

Euro

British Pound

Japanese Yen

Swiss Franc

It is the standard rate according to which others are compared and loans are given. A Variable Interest
rate is one that changes over time whereas a fixed one remains constant. Nowadays Libor has become
an industry's standard and is used for most positions. A variable interest rate is adjusted periodically and
thus is not likely to remain the same throughout a loan's life. A fixed interest rate remains constant for
the entire duration of the loan even if the market conditions change.

Starting a new project requires a careful assessment of cashflows that the project will generate in the
future. To determine whether a project is feasible or not we need to discount future cash flow and
obtain present value. Determining the value of a project can be challenging because of the time value of
money. An investor would buy a stock if the present value of future cash flow is higher than the current
investment.

An annuity is a series of payments made at fixed intervals of time. It is important as many financial
instruments and products are related to the concept of annuity for example insurance and pension
payments are a form of annuity.

Capital budgeting is the process a business undertakes to evaluate potential major projects or
investments. Capital budgeting also known as capital asset planning is a term relating to the decision-
making process companies go through when they must determine whether to invest in a specific long-
term initiative or asset, in addition capital budgeting is also used as a tool allowing company executives
to compare alternatives they have when making strategic decisions. It is an assessment method we
apply when we must decide on an investment for which a large amount of money and risk is required.
Such decisions are irreversible and might impact the business in years to come.

Microsoft PowerPoint empowers you to create clean slideshow presentations and intricate pitch decks.
It is a presentation tools that helps us to convey a message to the audience. It is required to display and
organize financials, provide a historical timeline as well as create a complete company presentation. A
PowerPoint presentation needs to be as clear as possible. The logical flow of information should occur at
a number of levels in your slides. The first one of them being the initial formatting. A clear structure is
required which remains consistent throughout the presentation.

Keyboard shortcuts are the favorite tool of experienced users. They allow you to save a lot of time
especially when the number of operations to be carried out on a specific slide is substantial. The
universal windows shortcuts can be applied in PowerPoint as well. A slide master is the top slide in a
hierarchy of slides that stores information about the theme and slide layouts of a presentation including
the background color, fonts, effects, and positioning. Every presentation has a slide master. The main
advantage of using slide master is that we can make changes to every slide in a given presentation by
modifying only once.

A smart art graphic is a visual representation of your information that you can quickly and easily create
choosing from a variety of layouts, to effectively communicate your message and ideas. By using
SmartArt PowerPoint users are able to select from a number of already made smart art graphics.

To conclude the course covers various aspects of financial analysis and the necessary factors that are
commonly used in it. It provides the user an atmosphere where they can easily understand and interact
with the information available. From Excel to PowerPoint, it accommodates its user in such a way that
learning becomes effortless and interactive.