1

Researching information

• Understanding the accounts of a company and knowing how to read a balance sheet: equity, solvency, etc.
• Critique and limitations of the balance sheet.

2

Understanding the company’s business activities through the profit and loss account

• Understanding its level of output.
• What was its consumption.
• Making the connection between the balance sheet and the profit and loss account.
• Critique and limitations of the profit and loss account.

3

Introduction to financial analysis

• What is the purpose of a financial analysis?
• The value of the financial analysis.

4

Assessing profitability and financial strength

• The profit and loss account and the intermediate management balances.
• Some company performance indicators.
• Interpreting the various balances in the profit and loss account: gross margin, value added, operating profit/loss.
• Analyzing and interpreting ordinary, extraordinary and net profit/loss: how did the profit or loss arise?
• Analysis of profitability.
• The capacity for self-financing.
• The principal key ratios which allow the strengths and weaknesses of the company to be identified quickly.

5

Analyzing financial health through the balance sheet

• Financing the company’s needs: equity, borrowed capital, capital financing.
• Operating cycles: to what extent can the company pay its debts in the short term?
• The principal key ratios: solvency, optimization of the WCR and measurement of liquidity.

6

Understanding the financial strategy

• Dynamic analysis of the cash reserves.
• Cash flow statement. Financing table.
• The financial levers.
• The advantages of each source of financing.

7

Valuing the company

• The valuation of the company.
• Examples of approaches to the valuation: asset-backed approach, cash-flow method.