Overview

This eCourse consists of three modules. Module 1 covers the three-statement model, which is a key tool used by equity analysts to generate forecast financial statements. This module looks at the steps involved in setting up a three-statement model, including defining objectives, data input and organisation, generating forecast financial statements, outputs, and scenario analysis.

Module 2 explains the importance of the statement of cash flows in assessing a company’s performance and future prospects. This depends not so much on earnings for the period, but more realistically on cash flow. The module identifies the key elements of the statement of cash flows and how these statements are prepared.

Module 3 looks at the three main sections of the statement of cash flows – operating cash flows, investing cash flows, and financing cash flows and uses real life examples of companies statements of cash flows to explore these areas. The tutorial also examines the metrics used by analysts to assess a company’s cash flow performance.

Objective

On completion of this course, you will be able to:
- Recognise the importance of cash to a business
- Identify the three main sections in the statement of cash flows
- Calculate cash from operating activities using the indirect method
- Determine cash flow from investing activities
- Calculate cash flow from financing activities
- Recall the importance of cash flow to lenders and investors in a business
- Interpret cash flow from operating, investing, and financing activities
- Recognise the importance of cash flow performance and solvency metrics in assessing the strength of a company’s cash flow
- Recognise the importance of the three-stage model in company financial analysis
- Identify the key steps in the model in generating forecast financial statements for a company

Content

Module 1: Three-Statement Modeling
Topic 1: Overview of Three-Statement Modeling
Topic 2: Defining Model Objectives
Topic 3: Designing The Model Layout & Format
Topic 4: Data Input & Organization
Topic 5: Forecasting
Topic 6: Outputs & Scenario Analysis

Module 2: Statement of Cash Flows - An Introduction
Topic 1: Overview of the Statement of Cash Flows
Topic 2: Format of the Statement of Cash Flows
Topic 3: Cash Flow from Operating Activities
Topic 4: Cash Flow from Investing Activities
Topic 5: Cash Flow from Financing Activities

Module 3: Statement of Cash Flows - Analysis
Topic 1: Analysis of The Statement of Cash Flows
Topic 2: Analysis of Cash Flow From Operating Activities
Topic 3: Analysis of Cash Flow From Investing Activities
Topic 4: Analysis of Cash Flow From Financing Activities
Topic 5: Cash Flow Performance Metrics
Topic 6: Cash Flow Solvency Metrics