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The Genesis
Fundamental Analysis and Technical Analysis are two divergent aspects of Capital Markets. If you are looking at investing in Stock Market or Shares for a long term, then it is essential for you to conduct a Fundamental Analysis of the Stocks you intend to invest in. Fundamental analysis involves Industry Analysis, Company Analysis and Analysis of the Financial Statements. While Industry and Company Analysis are subjective and based on general reading material and business news, Analysis of Financial Statements is an Objective thing based on Facts and Figures ultimately culminating in Ratio Analysis based on which you make long term decisions.
The Void
While investors appreciate the necessity of reading, understanding and analysing the financial statements, most small time investors are not able to do so because they do not find a suitable instructor or a course which gives a logical and structured explanation in a simple understandable format. Financial statements at the face of it appear something complicated, which actually they are not. Explaining such financial jargons to non-finance people itself is an art and there is a clear void in this area.
Intent of this Course.
In this course hosted by PRUDENCE Engineering and Financial Consultants, Col (Dr) Shabbar Shahid, an Army Veteran and a post graduate in Engineering and Finance with a Doctorate in management explains how an investor or any person can read, understand and analyse the financial statements and do ratio analysis of any business to determine the financial health of that business. This would help not only in financial analysis of a business but also helps to identify good stocks for long term investment. The intent is to impart conceptual knowledge combined with practical applications.
Layout and Content
The course is spread over five sections containing over 45 lessons over a period of almost six and a half hours. Section 1 explains the Balance Sheet in detail. Section 2 explains the Income Statement also known as PnL statement. Section 3 explains the Cash Flow statement. Section 4 explains some Ratio Analysis and Section 5 is a space for add on lessons where the instructor tries to answer the questions from students through add on video lessons.
Prospective learners
This course is ideal for people who are already in the Capital markets or intend making a career in the Capital markets. People who indulge in Value Investing and those who intend to invest in Stock market or are already investing but with limited knowledge inputs will find this course of immense value.
This course will help finance professionals, accountants and also the students of finance, commerce and those pursuing or intending to pursue management courses in any subject to build their professional career on sound knowledge.
Students of other disciplines like science, engineering and humanities who are interested in managing their personal investments will also find this course very useful.
If you own a business or are an employee responsible for growth of your company or if you are planning to invest in any company and if you are not familiar with reading the financial statements, then this course shall be of great help to you. You must at least have a look at the preview.
This course in Not specific to Indian Capital Markets or US stock market or indices like Nifty, Sensex, NASDAQ or Dow Jones but a conceptual course applicable to all Capital Markets / Stock Markets across the globe.
End Result and Key Takeaways
On completion of this course, the students will be able to read, understand and analyse the financial statements and do ratio analysis of any business from investment point of view.
Students will have a clear understanding of concepts like Assets, Liabilities, Retained earnings, Debt Equity, Current Assets, Current Liabilities, Working Capital, Top line-Bottom line, Revenue, Expenses, EBIT, Net profit, Cash flows from operating activities, Investment activities and Financing activities.
Difference between Face value- Book value and market value and various ratios like EPS, PE, Debt Equity and Current ratio have been explained from the basics in a simple manner which one does not find in books.
The contents of the 3 financial statements viz. the Balance sheet, the PnL or income statement and the Cash flow statement and their relevance have been explained threadbare in detail for any non finance person to understand easily. Figures for the past 5 years have been analysed to explain how one can determine the growth of a company or otherwise.
The real-life financial statements of a company have been used to explain the contents, refraining from any hypothetical examples.
It is an educational course to enhance your knowledge. The instructor knows the subject well and speaks to the point without any glamour, frills or divergence thus, respecting the value of time.
Legal Disclaimer:
This course is purely for educational purposes. Investment and trading in stock market involves financial risk. Students taking this course are advised to exercise due diligence before making any investment or trade in stock market. The instructor or any party related to this course or it’s content will not be responsible for any kind of loss to anyone in anyway, due to this course.
Understanding the Profit and Loss Statement
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1The Concept of Fundamental Analysis
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2Preview
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3Two Important Points
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4Significance of Financial Statements
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5Assets Liabilities and their Balance
This lecture explains the concept of Assets and Liabilities and their balance
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6Course Speed Setting
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7Why owner's money is a liability?
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8What is contained in a balance sheet?
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9Significance of Retained Earnings, Reserves and Surplus
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10Significance of Debt Equity Ratio
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11You as a student matter the most to me...
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12Snapshot of a Balance Sheet
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13Understanding Share Capital, Reserves & Surplus and its significance
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14Understanding Current Assets, Current Liabilities etc
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15Understanding Operating Cycle or the WC cycle
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16Significance of Working Capital
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17How to look at and what to look for in a balance sheet?
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18Understanding the Golden Rule as a first step
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19Analysis of the Balance Sheet Part 1
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20Analysis of the Balance Sheet Part 2
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21Balance Steet-Key takeaways
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22Quiz on Balance Sheet
A clear understanding of Balance sheet
Understanding the Cash Flow Statement
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23Introduction to Profit and Loss or Income Statement
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24Understanding the Profit and Loss Statement
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25Top Line and Bottom Line: Psychological Aspects
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26Analyzing the Profit and Loss or Income Statement
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27Key takeaways from Profit and Loss statement
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28Quiz on PnL Statement
An understanding of PnL statement through quiz
Ratio Analysis
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29Introduction to Cash Flow Statement
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30How does the Cash Flow
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31Significance of Cash Flow Statement
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32Parameters of a Cash Flow Statement
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33Understanding Cash Flow from various activities
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34Analysis of Cash Flow Statement Part 1
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35Analysis of Cash Flow Statement part 2
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36Key takeaways from Cash Flow statement
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37Quiz on Cash Flow Statements
A better understanding of CF statement through quiz
Add On Lessons
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38Significance of Ratio Analysis
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39Understanding Face Value and Book Value
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40Understanding Market Price of a Share
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41Understanding EPS
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42Understanding PE Ratio
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43Analysis of Debt Equity Ratio
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44Understanding ROE or RONW
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45Understanding the PB Ratio
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46Understanding the Current Ratio
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47Summary and way forward
When some figures of the financial statements are favorable and some not, there is a dilemma as to what to do next. The instructor suggests a way forward.
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48When not to buy and thank you note
The instructor brings out that it is not advisable to time the market when you are buying a good stock but at the same time, it is better to exerciser a caution as to when not to buy a stock. Then he concludes with a thank you note.
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49Quiz on Ratio Analysis
Let us understand ratio analysis through some quiz