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Tag: Financial Analysis Course

What is the Easiest Way To Learn How To Analyze Financial Statements?

Posted on by Imarticus Learning

Financial professionals must know and learn financial analysis to be able to analyse the statements of finance of an enterprise effectively. This requires a financial understanding of the basic key regions as financial analysis courses will teach you. They are : 

  1. Financial statements structure.
  2. The market economics of the environment within which the industry operates
  3. The goals and strategies employed and pursued by the firm to stay ahead of the competition. The route to learn financial statements analysis lies in the below plan or strategy.Industry characteristics and economic factors considerations: Porter’s Five Forces or economic attribute analysis will help determine the activities performing in the chain.Ex creation of the product, its manufacture, the distribution channels, retail outlets, price, transportation costs and so on. You now do the value analysis of the chain.

    Company strategies identification: Look at the company’s product, its nature including the product uniqueness, profit margins levels, brand loyalty creation strategy, and cost control measures. Factors considered are the integration of the supply chain, diversity of geographic locations, industry etc.

    Quality of the statements of the organisation’s financial statements assessment: Assess the key statements for relevance within the boundaries of accounting standards. While examining the accounts pay attention to issues of recognition, classification, valuation in the balance sheet accounts to arrive at a proper assessment.

    The main focus area checks if the balance-sheet forms a complete and real picture of the economic position in the firm. In assessing the statement of income, the focal area is to make a true assessment of earning quality to be the representation of economic performance in the organisation.

    Profitability and current risks analysis: In this step, the financial professionals add value to the financial statements and assessment of the firm through the tools of financial statements.

    Common tools for analysis are ratios of the financial statement which are the key to debt management or coverage ratios, liquidity, profitability, asset management, risk management, and market valuation.

    Ask the two questions related to profitability namely regarding how very profitable are operations and how much profit accrues to shareholders of equity. This enables the forecasting of the future health of the firm.

    Preparation of financial statements and forecasts of financial statements:
    Financial professionals will find challenges in making assumptions that are reasonable when speaking of the health and the firm’s future in comparison to the comparative values of growth in the industry.

    They will then study the effects of funding and cash flows on these assumptions. Standardization techniques and approaches like sales percentile values help draw up the pro-forma of the financial statements.

    Firm Valuation:
    Discounted cash flow methodology is most often used from among the many approaches to assessment of firm valuation. Cash flow is assessed and valued in the context of projected and awarded dividends.

    More advanced and technical detailed analysis techniques use available cash-flows to the enterprise or shareholders of equity. Yet another way would be to use the value-added economics method of relative valuation and measures which are accounting-based.

    The final steps:
    On completion of the analysis, valuation and financial statements the integrity of testing is called upon. Are these figures real and true pictures of the firm’s finances and positions?

    Many representations are fudged, enhanced and irregularly reported making the final test critical and valuable to the forecasting and financial data analysis. The financial analyst needs to be an ace at recognizing manipulation, detecting frauds, and correcting the statements.

What Careers Can You Have After Private Equity?

Posted on by Imarticus Learning

Private Equity is often hard to get into and means they have careers in the same field for an average of 25 to 30 years. Would they have careers if they decide to move? Let’s explore their options.

 1. Hedge fund choices:
Many PE professionals get bogged down by the frustrating pace and sheer tedious tasks of administration. It takes lots of time to succeed at making deals and more longer to make substantial profits.

No one becomes an overnight millionaire in PE. You wait for a good 5-10 years. That’s when the choice of moving towards hedge funds makes sense and is more lucrative. There exist similarities between PE and hedge funds which makes the junior levels can make a quick switch.

2. Venture capitalist ventures:
Few of the PE professionals find lack of excitement in large deals and seek out investments in performing start-ups and land up switching to funds like VC. A focus on Media, Healthcare and Technology sectors causes the movement to VC favored segments such as these.

3. Own fund launching:
This dream of many sees these professionals launching out with their own. This is more so in the case of senior PE professionals with excellent performance records and good networks of clients.

4. Portfolio/ Corporate Company migration:
Continuously helping portfolio companies to propel growth PE professionals do decide to be employed with a portfolio company in senior positions like CFO, CEO, Business Development Head and so on. Besides being lucrative, you get company stock which makes huge profits when the exit of the fund is successful. The private equity skill-set can be effectively used in corporate finance and strategy with any company.

5. Return to consulting roles:
PE consulting strategy or investment banking is a choice you can fall back on when unhappy for any reason such as poor and failed fundraising, redundancy, unsustainable economic environment, or just that it is still a lucrative choice.

6. The Fund of Funds- Secondary funds: 
PE professionals often leave to gravitate to fund of funds or secondary funds companies. The secondary funds form funds that buy portfolio companies using PE funds at steep discounts directly. The PE funds need liquidity for various reasons like exiting a particular sector or closing rapidly. The Funds of funds are mostly funds that place funds in PE companies rather than company investments.

7. Entrepreneurship is a choice:
Private equity professionals turn out to be highly entrepreneurial as they continuously generate viable business ideas at some point most likely when they are at junior levels. Private equity is a good starting point for becoming an entrepreneur. The networking opportunities and learning chances are awesome.

PE is truly the holy grail of financial professionals, and it makes sense to explore whether they do have choices if they decide to move. Such options and knowledge is why you should do a financial analysis course.

The courses offer a good grasp of basics, concepts, theoretical knowledge, practical skills and certifications that could help enhance your resume and career. They also offer boot camps, short term workshops, and knowledge valuable to enter the industry. Another advantage in such a course is of mentoring by certified and experienced industry aces that helps garner the latest best practices, techniques, skills, and practice on the latest trending technologies in the financial industry.

Consider professionals who know about careers in financial analysis and can mentor you effectively.

What are Some Of The Advantages Of Financial Ratio Analysis?

Posted on by Imarticus Learning

What Are Some Of The Advantages Of Financial Ratio Analysis?

Financial ratios are investigative tools to evaluate the relative health of companies by performing calculations on data items on the income and financial statements, cash flow statements and balance sheets.
Ratios measure the companies’ operational liquidity, efficiency, profitability, and stability giving the investors information and results rather than complicated financial data. Both analysts and Investors gain profit-earning advantages in the stock market through the use of the very widely used technique of ratio analysis to give arguably popular and indispensable insider-information on the company’s health.

The advantages of financial analysis:

  • Company comparisons: Financial ratios provide a well bench-marked method to compare industries and companies. Using the financial ratios ensures an equal and level playing field of all companies from the point of view of financial analysts. Companies are evaluated based on performance rather than their sales volume, market share or size. The raw financial data comparison of two companies coexisting in the industry can only offer a perspective of limited-insight. Ratios are never mere numbers and are true reflectors of the company’s health and stability. They reflect the profit, growing sales, funding the business, the debt accumulated and many other factors.
    Let’s take the example of two companies. The older of the two companies may boast of revenues that are mind-boggling and make it appear stronger than the newer of the two. However, assessing the two companies on the basis of ratios such as ROA-return on assets ROE-return on equity, the profit margins both gross and nett could reveal the smaller company functions more efficiently, while generating more profits and being substantially the healthier of the two in terms of the financial ratios, and assets employed per profit dollar.
  • Analysis of industry segment: Ratios can forecast trends in particular segments of industries by creating benchmarks against which the industry players can be judged. Small businesses can effectively use industry benchmarks to draw up an effective organizational strategy while measuring their performance as against the industry standards.
  • Stock valuation and indices: The understanding of ratios helps investors and analysts to communicate and evaluate the weaknesses and strengths of firms, companies, and industries. Fundamental financial analysis is termed financial ratios and used in determining the relative health of companies as a precursor to investing.
  • Performance and planning: Ratios can guide entrepreneurs to better business plans while making presentations, and in guiding investors and lenders. By using the trends for the particular industry owners of small businesses can set realistic time-bound goals for performance in the context of specific ratios giving investors a peek into the true picture of the company. Ratios can also help as a motivator for strategy and change in the organization, providing flags and guidance to the management as constructive feedback reflected as ratios in valuation-shift when the organization changes. Ratios help managers stay alert by reflecting the financial opportunities as well as company weaknesses.

By doing quick financial analysis courses, one can learn the advantages of financial analysis and how to use the tools effectively in becoming a great financial profession. These courses offer a good grasp of basics, concepts, theoretical knowledge, practical skills and certifications that could help enhance your resume and career.
They also offer boot camps, short term workshops, and knowledge valuable to enter the industry. Another advantage in such a course is of mentoring by certified and experienced industry aces that helps garner the latest best practices, techniques, skills, and practice on the latest trending technologies in the financial industry.

Also Read: How Ratio Analysis Helps Modern Age Financial Analyst

Scope of Financial Analysis in India

Posted on by Imarticus Learning

Advocacy of Foreign Direct Investment in India deployed opportunities of immense proportion that aided in the articulation of a new future encapsulating evolution of repressed business regimes in India. Nation extended its arms with pockets and excuses to suffice in a subtle business scenario that once had a notion and an attitude of an orthodox individual that digressed the opportunity for some time. FDI underwent critical empowerment and upgradation, and about 25 sectors became more prone to FDI and its impact than ever. Initiatives like “Make in India” further catalysed the process and company rolled their money and tangibility with an ascertain projection and hope in the evolving economy. Under the dominion of such pro-competitive market and cost-intensive environment with a sharp eye on profitability and margins, Financial Analysis finds its existence in the most authentic propensity. With the amplified foreign investment and stakeholders, the predicament sphere has to be normalised and offset mode should be incorporated so that the glean of companies enslaving trust in the economy doesn’t come under the bridge with weak foundations.

Financial Analysis acts as damage control for the companies so that the tides don’t upset the throttle of the company to evolve in the business arena hence to restore and majorly revive the situation to bracket the damage to confine it in a closed forum is amalgamated through Financial Analysis.

Also Read: What Are The Careers in Financial Analysis?

India is ordinarily designated and caricatured as a Developing Economy that still requires a higher degree of potent introspection to match the expectations of stakeholders, and hence financial analysis tools such as Ratio Analysis helps in assisting the economy. An informed analysis aid in better investment which subsequently results in better profits and therefore in a country like India, the revival of the economy stands a better chance with the help of better tools at hand leading to the carving of a profitable investment. For starters, Financial Analysis imply explicitly even to the amateurs in the investing domain about the current position of the organisation regarding their ability to pay short-term debts and liabilities in the company and the current ratios and Quick Ratios can correctly demonstrate this by analysing the previous trends in their assets and liabilities. Similarly, Debt Ratios dictate the financial position of the company. Here the accumulation of asset is garnered through the supporting pillar, i.e. debt. Which is critical and require monitoring to constrain it in the prescribed boundaries of company policy else the disruption is outraged due to the ignorance towards thee thrusting debt, which eventually gave rise to massive hoarding of liabilities that put the company in an insolvent mark which lays an impact in the growing economy. Hence the escalation alienation of the company’s relevance and standards in the market is interconnected to the economic growth which further entails that the falling brick may move also put the existence of the whole castle into jeopardy.
Amidst many attributes assigned to India, outsourcing service is one such domain where India emerges as a leading player, a proper example, in this case, can be the information technology(IT) industry where India is the renowned name and hence an enormous girth of scope fabricates in the form of opportunity. In this sector as well where an analysis routing toward the insights and prepositions that marks the outset of some fruitful results gets intoned in the whole system, and hence the Financial Analysis finally surfaces as a deterrent to the falling economy through encouraging and persuading the global investor that fuel the growing economy forward with a robust trust.
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