Balance Sheet Modeling
Income Statement Modeling: Revenue
Analysts use three approaches to project future revenue. Top-down approach. Bottom-up approach. Hybrid approach. Top-down Approach The top-down approach begins at the level of the overall economy. Forecasts are then narrowed to such levels as sector, industry, and market for…
Income Statement Modeling: Revenue
Analysts use three approaches to project future revenue. Top-down approach. Bottom-up approach. Hybrid approach. Top-down Approach The top-down approach begins at the level of the overall economy. Forecasts are then made at narrower levels, such as sector, industry, and market…
Study Notes for CFA® Level II – Financial Reporting and Analysis – offered by AnalystPrep
Study Session 5 Reading 11: Intercorporate Investment -a. Describe the classification, measurement, and disclosure under International Financial Reporting Standards (IFRS) for investments in financial assets, investments in associates, joint ventures, business combinations, and special purpose and variable interest entities; -b….
Issues Related to Balance Sheet Modifications, Earnings Normalization, and Cash Flow Statement Related Modifications on a Company’s Financial Condition
Earnings Quality and Cash Flow Analysis Earnings quality refers to the persistence and sustainability of a company’s earnings. High-quality earnings imply that a company’s accounting estimates are unbiased. Additionally, it means that the earnings are derived from sustainable rather than…
Evaluating the Effects of Change in Accounting Standards, Methods or Assumptions on the Financial Statements and Ratios
Users of financial statements must be cognizant of proposed changes in accounting standards because of the impact they have on financial statements and a firm’s valuation. We anticipate significant changes in the accounting standards over the next few years as…
Relevant Adjustments for Improving Quality and Comparability with Similar Companies
Off-Balance-Sheet Financing Off-balance-sheet financing is an accounting practice where companies exclude liabilities on their balance sheet and the associated interest expense on the P&L. Operating lease is a typical example of off-balance-sheet financing. It is an expense that is kept…
Financial Reporting Choices and Bias that Affect the Quality and Comparability of a Company’s Financial Statements
Assume that our purpose for analysis is to identify and evaluate the drivers of financial success for ABC Ltd., a publicly held company in India, which is a leading car manufacturer. Further, we want to identify and understand the risks…
Use of a Framework to Analyze a Firm’s Financial Statements
Financial analysis is crucial as it aids investors and other financial decision-makers to work out effective economic decisions. This ensures that the possibility of a successful outcome is on the decision maker’s side. A basic framework to aid in financial…
