“FINANCIAL ANALYSIS”

The Financial Analyst Course offered by “365 careers” is developed in-house, is engaging and is

interactive. The company’s courses have been taken by over 1,000,000 students from all around

the world. People working at world-class organizations like Apple, PayPal have used “365

careers” to enhance and develop their skills.

The course covers excel, financial modeling, accounting, financial statement analysis, financial

analysis, finance, capital budgeting and presentations. Everything being learnt has a practical

application and is one of the best ways to take and cover this course. One can begin by

downloading the required course materials.

Starting with Microsoft Excel, it is the worlds #1 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 in the course 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 is covered within the course.

It allows us to do more with our 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. Initial formatting is the key for

creating professional-looking spreadsheets. Moreover, it teaches different techniques like the use

of macros, faster scrolling and custom number formatting. Use of macros end up in being a great

timesaver.
Time is money and saving time in excel is a fundamental priority. This can be done through

various excel shortcuts predefined in the course. Apart from these there are certain functions

unique to excel like SUM, COUNT, AVERAGE and Concatenate etc. On the basis of 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 can be created with “choose”. Perform Sensitivity Analysis with Excel's

Data Tables Functionality. Another important financial function which can be performed though

excel is discounting cash flows and Calculating Internal Rate of Return (IRR). These features

can be mastered through this course. PMT functions can also be used to create loan schedules.

To build a P&L 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.

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

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.