Tag: best financial analysis course

Financial analysis refers to an organisation’s process of analysing financial statements and arriving at effective decision-making. The data thus derived is not only used by the internal players of the company, but also external stakeholders so that they can understand the health of the organisation better, assess its business value and financial performance, and decide whether it is safe to invest in the company. 

However, the numbers won’t make any sense unless one deploys proper methods to analyse them thoroughly. As a result, financial analysis tools come in handy. In modern times, Big Data and Data Science have been highly beneficial to conduct financial analysis for industries as it helps businesses to understand trends, risks, and opportunities.

R and R Studio are two technologies that are used for financial analysis. In this article, we will discuss the importance of R and R Studio for financial analysis. 

Importance of Financial Analysis

Financial analysis helps organisations understand their financial position better. It gives an overall idea about an organisation’s creditworthiness, profitability, and so on. Accurate financial modelling and analysis help organisations have a better understanding of their internal operations. 

The importance of financial analysis is as listed below:

• Decisions related to shareholding and investment: A company has shareholders who invest in the form of repeated transfers and shares. However, every time before investing they need to assess a number of factors of the company such as reliability, profit, price, etc. 

Analysing the financial statement of an organisation helps the shareholders decide if they should continue investing in the company. Therefore, financial analysis helps in making crucial financial decisions.

• Internal planning within an organisation: Financial analysis helps companies make decisions, and plan and manage tasks of importance. Through proper financial analysis, companies can make smart investment plans. Being backed by robust data, there is barely any chance that these investments will go in vain and makes sure that the plans can reap maximum profits.
• Determining the creditworthiness of an organisation: Shareholders give loans to the companies as capital. Whether a shareholder should invest in an organisation depends on how the company has performed over time, and a thorough analysis of its financial statements. Financial modelling represents the operations of a company over a period of time.

Not only this but an interest rate is levied on capital loans. These decisions, too, are based on analysis of the financial statements of an organisation. 

What are R and RStudio and What are the Differences between Them 

R is a programming language that is used by statisticians and data miners. R helps in effective data analysis and developing statistical software. This language is excellent for graphics and statistical computing. It comes pre-installed in a computer system.

RStudio is an open-source software tool that is written in Java, C++, and JavaScript. This integrated development environment can be used for writing the R code and executing it. One can use RStudio for developing statistical programs. However, this does not come pre-installed; it has to be installed manually. 

Listed below are some of the differences between R and RStudio. 

You need to develop a detailed idea about these technologies if you want to establish a career in financial analysis.

Analysing Data Using R and RStudio

Data analysis begins with the attempt to find answers to queries or solutions to problems with the help of data. The R programming language has tools that help to conduct a proper analysis of the data that you wish to study. A course in financial analysis using R will teach how to form a connection between the data and real-world problems and conduct robust data analysis.

Once the problem has been identified and the data set that is to be used for analysis has been processed, the next step is to develop the model for analysis. However, it is also important to make sure that the model you develop will deliver optimum results and perform optimally in real-time conditions. The validity of the models can be assessed using the Tidymodels framework. 

RStudio helps to conduct a complete analysis of data with the help of R and other languages. RStudio comes with packages that can enhance the features of R. Analysis of financial data using RStudio goes through the following steps:

1. Importing the data in RStudio
2. Transforming the data
3. Basic statistics
4. Plotting the data distribution

RStudio is extremely easy to perform and the integrated development environment (IDE) works extremely well with the R programming language. Both these technologies can help in effective financial analysis and help businesses plan their course of action accordingly. 

Conclusion

If you are desirous to establish your career in financial analysis, this online Financial Analysis course offered by Imarticus Learning in collaboration with KPMG is an excellent option. This course can be considered equivalent to a 120-hour program that helps the learners develop their skills in various functions and also acquire relevant industry knowledge so that they can be prepared for the market and give their careers a boost.

If you opt for this 4-month-long course, you will get the opportunity to learn from experts who have years of experience in the industry. Not only this, but Imarticus Learning also extends placement support to the learners. Through career guidance, profile enhancement, and mock interviews, the course focuses on the holistic development of the candidates and prepares them in a way that they deem fit for various roles in the finance department.

You can visit the official website of Imarticus Learning to know more. Happy learning!

Analysing the financial statements of a company to facilitate decision-making is called Financial statement analysis. It involves evaluating and analysing businesses, budgets, projects and various finance-related transactions that help them to regulate their performance. In general, experts use financial analysis to determine the stability, solvency, or profitability of an entity and if they are enough for a monetary investment.

It is an integral part of financial statement preparation and is extensively used by external stakeholders to evaluate the overall financial health and business value of an organisation. Financial analysis on the other hand is used to determine economic trends, build future business plans, set financial policies, and find out suitable companies and projects to invest in.  

This article will give you detailed information about financial statement analysis, its types and how it differs from financial analysis as a whole.  

Three Techniques Used in Financial Statement Analysis?

Financial statement analysis is an integral part of preparing the financial modelling spreadsheet that helps forecast business performance. Financial analysts generally use the following techniques to analyse the financial statements of a company. 

• Horizontal analysis: This is carried out via the comparison of historical data and is used for detecting growth trends from various time periods. 
• Vertical analysis: This is carried out via the comparison of items listed on a financial statement and their relation to each other. For example, an expense item can be expressed as the sales percentage of a company. 
• Ratio analysis: This is the final and most important part of the analysis where the line-item data like P/E (Price-to-earnings) ratios, dividend yield or earnings per share.

Financial Statement Types 

To efficiently manage operations and run business forecasts, companies make use of financial statements like balance sheets, income statements, and cash flow statements to ensure that their stakeholders get maximum transparency. The different types of financial statements have been elucidated below:- 

• Balance Sheet: This is a document that reports the financial worth of a company with regard to book value. It is usually divided into three segments namely:- 
• Company assets: Cash and accounts are short-term assets that can be received and are proof of how efficiently the company is operating. 
• Company liabilities: A company’s arrangements for expenses and how much debt capital is being paid off fall under company liabilities. 
• The shareholder equity of the company: Detailed information about earnings from net income periodically and equity capital investments fall under shareholder equity. 

It is important for the balance sheet to balance the assets and liabilities keeping the shareholder equity equal. This figure serves as the company’s book value and is considered an integral performance metric.

• Income Statement: This helps segregate the revenue earned against the expenses spent by a company to run its business activities. All in all, it refers to the net profit and loss of a company. It is broken into three segments for business efficiency analysis:- 
• Revenue 
• Operating profit
• Net income is reached

Analysing income statement involves calculating gross profit, operating profit, and finally, net profit margin. 

• Cash Flow Statement: This is more like an overview of the cash flows of a company starting from investing activities, financing activities and operating activities. Net income is added to the cash flow statement, which is further included for operating activities as a top-line item. Investing activities section in the cash flow statement includes cash flows from firm-wide investments where as the financing activities section includes cash flows from equity and debt financing. At the very bottom, one can find the outstanding cash that is available in the company. 
• Free Cash Flow Statements/ Other Valuation Statements: Analysts are also known to use other valuation or free cash flow statements to determine company value. Free cash flow statements show the total present value by deducting the free cash flow estimated by a company to generate. It is highly valuable for private companies before they go public. 

Financial Analysis: A Brief Introduction

Financial analysis, unlike statement analysis, is used to monitor economic trends, decide what financial policy to set, make long-term plans, and pinpoint projects and companies to invest in. It can be done by both investment finance and corporate finance companies.

It is carried out by a financial analyst who synthesises financial data and thoroughly examines the financial statements of a company namely:-

• Income statement
• Balance sheet
• Cash flow statement. 

Financial data is commonly analyzed by calculating ratios extracted from the data in the statements and comparing them against the company’s historical performance or the data of other companies.

Financial Analysis vs. Financial Statement Analysis

Both Financial analysis and financial statement analysis are involved in evaluating and analysing the financial statements of a company to facilitate economic decision-making. However, both have their key differences that need to be interpreted clearly for proper understanding. The differences have been elucidated below:-

Conclusion

Financial statement analysis is an integral part of the financial modelling of a company because it helps provide in-depth information about the KPIs of a company over time. Financial analysis on the other hand is a more holistic term used to signify the processes involved in the analysis of a company’s financial health over time.  

If you are planning to pursue a career in this field, you must have a deep understanding of both as well as how different they are from each other. To kickstart your career as a financial analyst, you can consider signing up for the Financial Analysis Prodegree In Collaboration With KPMG offered by Imarticus Learning. 

It’s true that Financial assets are an essential part of any investment portfolio, providing investors with an array of investment opportunities to choose from.

In simple terms, Financial assets can be anything that derives its value from a contractual claim, such as stocks, bonds, commodities, & currencies. Financial assets also include real estate, intellectual property & even personal property. These investments are often referred to as “homes” or “goods” because they can be held in your portfolio until they appreciate in value & then sold for a profit.

In addition to this, Valuing financial assets is also essential because it helps investors figure out if their investments are doing well or not. This information helps investors make informed choices about where to invest their money & improve their investment portfolio’s performance.

In this informative post, we will discuss the significance of valuing financial assets. Plus, we’ll also outline seven methods involved in the valuation of Financial Assets. So, let’s begin.

Importance of Valuation of Financial Assets

The valuation of financial assets is essential for several reasons.

• It entitled investors to determine the true value of their investments, which is vital for making informed investment choices.
• It helps investors identify undervalued or overvalued assets so they can buy and sell accordingly.
• The valuation of financial assets is essential for financial reporting, as companies must report the fair value of their financial assets on their balance sheet.

Top 7 Methods involved in the valuation of Financial assets

Valuing financial assets is paramount to determining their true worth & to make informed investment choices. There are various methods of valuing financial assets, which include the following:

• Cost method: The cost method is the most commonly used method of valuing financial assets. It is based on the price at which an asset was acquired & its subsequent depreciation over time. For instance, if a company bought a property for $100,000 & has depreciated it by 30%, its value would be $70,000.
• Market Value Method: This way of assessing an asset’s value involves looking at its current market value. This is the price that people are currently willing to pay for it. For example, if a share of a company’s stock sells for $50 per share, that’s its market value. 
• Income Method: The income method is a way to determine the value of an asset based on the income it is expected to generate in the future. This method is commonly used for rental properties or other assets that produce regular income.
• Comparable sales method: The comparable sales method is used to value financial assets that are similar to assets that have recently been sold in the market. It simply involves comparing the asset being valued to similar assets & adjusting the value based on any differences.
• Replacement cost method: The replacement cost method involves determining the cost of replacing a financial asset with a new one and is commonly used to value physical assets. By estimating the cost of replacing an asset, investors & analysts can determine the current value of the asset and make informed choices about its potential return on investment.
• Options pricing method: The options pricing method is a paramount tool for investors & traders who use options to manage risk, generate income, or speculate on market movements. By accurately valuing options, investors can make informed decisions about buying, selling, or holding options and can quickly manage their overall portfolio risk.
• Discounted Cash Flow (DCF) Method: The discounted cash flow method is a valuation method that estimates the asset’s present value based on its future expected cash flows. The method involves projecting the expected cash flows of the asset over a certain period & then discounting those cash flows to their present value using a discount rate.

Learn Financial Analysis with Imarticus Learning.

Imarticus Learning offers a comprehensive Financial Analysis certification course that equips students with the necessary skills to analyze financial data & make informed investment decisions. Industry experts lead the course with extensive experience in finance & investment management, and it includes hands-on exercises and case studies to help learners apply the concepts they learn.

Course Benefits For Learners:

• Students will develop skills that make them more attractive to employers, including financial analysis.
• By enrolling in online financial analysis training, individuals can gain the knowledge and skills required to pursue a career as a financial analyst.
• Once you’ve mastered the art of financial modelling, it will be easy to find a job.

A rise in business and finance industries demand the advancement of professionals in financial markets. There is a steady increase in jobs in the financial sector. The total revenue in the Finance segment in the USA is expected to grow at CAGR 7.10% in 2022-2026. 

Now is the right time to tap into the field of financial analytics. Someone with the right skills and degrees might still be unsure about the demands of a career as a financial analyst. Read on to learn more about choosing the best financial analysis course suited to your needs.

Who is a Financial Analyst?

A financial analyst assesses their company’s performance based on financial expenditure, tools, assets and other related fields. They are crucial in maintaining the company’s positive financial exposure and hence, structuring financial planning. To do so, they predict future financial trends and push the company’s financial growth into the model prepared to avoid incurring losses.

What does a Financial Analyst do?

While it may sound easy, a financial analyst’s role is more than just predicting financial trends and generating reports. Here is a broad (and not exhaustive) list of the work of a financial analyst:

• Gathering past data on the financial trends through reports/ initial stakeholder meetings.
• Generating current financial reports.
• Organising the information and looking for loopholes, if any.
• Analysing any previously erroneous loss and implementing a new plan henceforth.
• Making newer predictions and forecasts of the current trends of the Finance industry.
• Meetings with stakeholders and acquainting them with the company’s new financial model.

Steps to become a Financial Analyst

Once acquainted with the job role, a candidate needs to straighten their goals by getting proper financial analyst training. Here are some relevant ways through which one can learn financial analysis:

Get a relevant Bachelor’s degree

A relevant bachelor’s degree is the first step towards your goal of making a career as a financial analyst. Fields like Economics and Statistics are good, but a more direct and targeted bachelor’s in Finance (with specialisations as needed) gives a better edge.

Internships and experience-building

While pursuing the degree, students need to participate in internships that provide job-like exposure and give an idea about the Finance industry. The internships and other related academic co-curricular activities simultaneously provide experience and look great on your resume. 

Increase your skills: Higher studies and certifications

In addition to a bachelor’s degree and certifications, many aspirants have to clear national examinations like the CFA or prove their mettle in extremely competitive job examinations and interviews. It is hence always a good option to obtain a master’s degree or be certified in other diploma courses before you sit for examinations. This helps one learn financial analysis deeply and prepares them better for any upcoming opportunities. If you are unsure about a master’s degree, online short-term courses are a great way to begin higher studies.

What should a good Financial Analyst course include?

With the prerequisites and other skills ensured, it is time to choose a course best fitted for financial analyst training. Here are a few pointers to keep in mind while choosing a good financial analyst course:

Connected to the Industry

Any good financial analysis course should provide adequate internship opportunities or otherwise pave the way for entering into the job market or has connections to the job market. Placements through such courses should be an integral part of its outreach. Therefore, teaching students job-relevant skills should be a part of the curriculum. 

Comprehensive learning

The content structure of the course should include a 360-degree worldview by covering the basics and specialised papers on Finance. It should be practical and allow space for theory learning blended with a practical application via a student’s critical and creative faculties.

Affordability and accessibility 

The course should be affordable. Online courses are a better fit in terms of expenditure. They can also be accessed anywhere and anytime. Online courses are great for students who want to learn at their speed as well as for working professionals intending to amp up their degrees and certification skills. 

Structured syllabus

Any good financial analysis course should include a structured syllabus: it should include the basics of Accounting and Financial Modelling, Valuation and other Corporate Strategies. The syllabus should also include capstone projects or equivalent projects at the end as a means of assessment and other introductory courses to job readiness within the financial market.

Career paths

The course should open up multiple career paths. In your career as a financial analyst, the specialised domains that open up are financial planning lead, equity research analyst, finance manager, chief financial officer, business evaluation analyst, finance project manager and so on.

Conclusion

With the career demands set to grow only higher, perfecting financial analyst training is key now. The Financial Analysis Prodegree course by Imarticus is a great financial analysis course in this domain. Conducted in collaboration with the financial firm KPMG in India, this 180-hour online course delves into the topics of core Finance. Powerful syllabus taught by renowned KPMG faculty ensures live learning, job-relevant skills and impressive industry certifications. 

Book your seats now, or visit Imarticus Learning for more information.