The Language and Tools of Financial Analysis from Coursera

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Syllabus

An Introduction to Accounting Principles: The Language of Capital Markets

This week we will define and explain the key financial statements produced by a company and reported to its shareholders. We will discuss the different core elements within those statements following basic accounting principles with the discussion framed in reference to excerpts from the actual financial statements produced by the US-listed food company Kellogg's.

An Intuition-based Introduction to Financial Analysis

Understanding the importance and the accounting principles underpinning the key financial statements of a company, we now turn our attention to synthesizing and condensing the financial statement information for the purpose of financial analysis. Specifically, we demonstrate how financial analysts use ratio analysis to measure relative profitability, leverage, efficiency and the liquidity of a company. Again, we utilise information from the financial statements of Kellogg's and its competitor Kraft to demonstrate these financial analysis techniques.

The Links Between Accounting Principles and Financial Decision-making

Having established initial basic financial analyst's toolset in the first two weeks of this course, some caution is warranted as we turn our attention to some of the pitfalls associated with uncritical use of financial statements by analysts. Specifically, we highlight how the use of historical cost and accrual-based accounting might lead to sub-optimal corporate financial decision-making. We then discuss how the agency relationship between management and the owners of a company may also lead to poor corporate decision-making. We conclude with a cautionary tale of misleading accounting practices and the regulator's response to these cases.

Value Measurement via Discounted Cash Flow Analysis

Having identified the key elements of a company's financial statements, and the way in which information from these statements can be utilized in financial analysis, we shift our focus this week to discounted cash flow (DCF) analysis. Sound financial decision-making by CFOs and investors, requires an assessment of future (uncertain) financial outcomes. DCF analysis allows the financial analyst to extrapolate the financial statement information in a forward-looking manner. The DCF technique provides an objective way in which we can evaluate financial decisions while overcoming many of the shortcomings associated with standard ratio analysis.

Good to know

Know what's good

, what to watch for

, and possible dealbreakers

Examines value creation at the firm level, exploring a cornerstone skill for financial analysis

Created in partnership between the University of Melbourne and Bank of New York Mellon (BNY Mellon), a veritable industry powerhouse

Finds a foothold in the field of corporate financial decision-making, linking accounting principles to financial analysis to decision-making

Explores the links between accounting principles and financial analysis, offering insights for analytical thinking in finance

Demystifies the language of capital markets using financial statements, connecting accounting principles to industry practices

Cautionary tale of misleading accounting practices and the regulator's response, providing an overview of standards and ethical considerations

Reviews summary

Great course on financial analysis

Learners largely agree that this course on financial analysis is generally good. Students praise the explanations of concepts and the end-of-class project. Some learners did wish for a more in-depth look at the impact of financials on a business

Course structure fosters reasoning over memorization

"You learn why to do it rather than just how to do it."

Professor provides clear explanations

"All the concepts are very well explained by Prof. Paul."

Solid overview of financial analysis concepts

"Solid class, with a very strong overview on the elements of financial analysis."

Lacks in-depth discussion of practical business implications

"Would have liked to have a more in-depth understanding of what the financials mean on the ground for the business"

Activities

Be better prepared before your course. Deepen your understanding during and after it. Supplement your coursework and achieve mastery of the topics covered in The Language and Tools of Financial Analysis with these activities:

Review Accounting Principles

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Refresh your understanding of the basic concepts of financial accounting to better prepare for this course.

Browse courses on Financial Accounting

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Read the assigned textbook chapters on financial accounting principles.
Complete the practice problems at the end of each chapter.
Take a practice quiz on financial accounting principles.

Excel for Financial Analysis

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Enhance your proficiency in using Excel for financial analysis, enabling you to effectively manipulate and analyze financial data.

Browse courses on Excel

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Learn the basics of Excel functions and formulas.
Create financial models in Excel.
Use Excel for data visualization.

Financial Analysis with Warren Buffett

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Delve into the investment strategies and financial analysis techniques of Warren Buffett, one of the most successful investors in history, to gain insights into value investing and decision-making.

View The New Tao of Warren Buffett on Amazon

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Read the book.
Summarize the key concepts.
Apply the concepts to your own investment decisions.

Four other activities

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Ratio Analysis Practice

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Reinforce your understanding of financial ratio analysis techniques to enhance your ability to evaluate companies' financial performance.

Browse courses on Financial Ratios

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Identify the different types of financial ratios.
Calculate financial ratios using provided financial statements.
Interpret the results of your ratio analysis.

Discussion Forum Participation

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Engage in discussions with your peers to exchange insights, clarify concepts, and enhance your understanding of course material.

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Read the discussion prompts.
Post your own responses.
Comment on the responses of others.

Stock Market Simulation

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Gain hands-on experience in managing a stock portfolio through a simulated environment, developing practical skills in investment analysis and decision-making.

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Research different stocks.
Build a diversified portfolio.
Monitor the performance of your portfolio.

Financial Analysis Case Study

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Apply your financial analysis skills to a real-world scenario, fostering a deeper understanding of how financial principles are used in practice.

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Choose a company to analyze.
Gather the company's financial statements.
Perform a financial analysis of the company.
Write a report summarizing your findings.

Career center

Learners who complete The Language and Tools of Financial Analysis will develop knowledge and skills that may be useful to these careers:

Corporate Finance Analyst

Corporate Finance Analysts analyze financial data and make recommendations on investment, financing, and capital budgeting decisions for companies. The Language and Tools of Financial Analysis from the University of Melbourne may be helpful because it provides a strong foundation in financial analysis and corporate finance principles.

See salaries and explore the career path for Corporate Finance Analyst

Accountant

Accountants prepare and maintain financial records, prepare financial statements, and analyze financial data for businesses and individuals. The Language and Tools of Financial Analysis from the University of Melbourne may be helpful because it provides a strong foundation in accounting principles and financial analysis.

See salaries and explore the career path for Accountant

Financial Controller

Financial Controllers oversee the financial operations of companies, including budgeting, forecasting, and financial reporting. The Language and Tools of Financial Analysis from the University of Melbourne may be helpful because it provides a comprehensive understanding of financial management and accounting principles.

See salaries and explore the career path for Financial Controller

Quantitative Analyst

Quantitative Analysts use mathematical and statistical techniques to analyze financial data and develop investment models. The Language and Tools of Financial Analysis from the University of Melbourne may be helpful because it provides a strong foundation in financial analysis and quantitative modeling.

See salaries and explore the career path for Quantitative Analyst

Investment Analyst

Investment Analysts analyze financial data and make recommendations on investment decisions for individuals, families, and institutions. The Language and Tools of Financial Analysis from the University of Melbourne may be helpful because it provides a strong foundation in financial analysis and investment management.

See salaries and explore the career path for Investment Analyst

Wealth Manager

Wealth Managers provide financial advice and guidance to high-net-worth individuals and families. The Language and Tools of Financial Analysis from the University of Melbourne may be helpful because it provides a comprehensive understanding of financial planning and investment management strategies.

See salaries and explore the career path for Wealth Manager

Portfolio Manager

Portfolio Managers manage investment portfolios for individuals, families, and institutions. The Language and Tools of Financial Analysis from the University of Melbourne may be helpful because it provides a strong foundation in financial analysis and investment management.

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Risk Manager

Risk Managers identify, assess, and manage financial risks for businesses and institutions. The Language and Tools of Financial Analysis from the University of Melbourne may be helpful because it provides a comprehensive understanding of financial risk management principles and techniques.

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Auditor

Auditors examine and evaluate the financial records and statements of companies to ensure that they are accurate and in accordance with accounting standards. The Language and Tools of Financial Analysis from the University of Melbourne may be helpful because it provides a comprehensive overview of accounting principles and financial analysis techniques.

See salaries and explore the career path for Auditor

Budget Analyst

Budget Analysts analyze financial data and prepare budgets for businesses and government agencies. The Language and Tools of Financial Analysis from the University of Melbourne may be helpful because it provides a strong foundation in financial analysis and budgeting techniques.

See salaries and explore the career path for Budget Analyst

Trader

Traders buy and sell financial instruments, such as stocks, bonds, and currencies. The Language and Tools of Financial Analysis from the University of Melbourne may be helpful because it provides a strong foundation in financial analysis and trading techniques.

See salaries and explore the career path for Trader

Compliance Officer

Compliance Officers ensure that companies and organizations comply with applicable laws, regulations, and ethical standards. The Language and Tools of Financial Analysis from the University of Melbourne may be helpful because it provides a strong foundation in financial reporting and compliance requirements.

See salaries and explore the career path for Compliance Officer

Management Consultant

Management Consultants provide advice and guidance to businesses on a variety of topics, including financial management, operations, and strategy. The Language and Tools of Financial Analysis from the University of Melbourne may be helpful because it provides a strong foundation in financial analysis and business management principles.

See salaries and explore the career path for Management Consultant

Financial Advisor

Financial Advisors provide financial advice and guidance to individuals and families, helping them manage their finances, plan for retirement, and invest for the future. The Language and Tools of Financial Analysis from the University of Melbourne may be helpful because it provides a comprehensive understanding of financial planning and investment strategies.

See salaries and explore the career path for Financial Advisor

Financial Analyst

Financial Analysts study financial information, trends, and patterns to make investment recommendations for their clients or companies. The Language and Tools of Financial Analysis from the University of Melbourne may be helpful because it helps build a foundation in accounting principles, financial statement analysis, and financial decision-making.

See salaries and explore the career path for Financial Analyst