cfi how to read financial statements course answers

by Alexie Cremin DDS 4 min read

What are the three core financial statements?

The three financial statements are the income statement, the balance sheet, and the statement of cash flows. These three core statements are

What are the financial statements?

The financial statements are key to both financial modeling and accounting. . These three core statements are intricately linked to each other and this guide will explain how they all fit together.

What are the different types of financial statements?

You’ll explore a range of financial statements - focusing on income statements, statements of financial position and cash flow statements. You’ll also investigate the different branches of accounting and learn to identify who else in the business uses this accounting information. What do these statements contain?

Which financial statement shows profit and loss over a period of time?

Income Statement The Income Statement is one of a company's core financial statements that shows their profit and loss over a period of time. The profit or Balance Sheet The balance sheet is one of the three fundamental financial statements.

Overview

Reading business financial information is a critical task of every credit analyst and the first step in reviewing a credit application. In this Reading Business Financial Information course, we will look at key financial statements including the balance sheet, income statement, and the statement of cash flows.

How the certification works

Commercial Banking & Credit Analyst (CBCA)™ courses are offered 100% online, allowing you the flexibility to start the Commercial Banking & Credit Analyst (CBCA)™ program anytime and learn when it’s most convenient for you.

Frequently asked questions

Absolutely! All the files and templates needed in a course are available for download. Just look for a module that shows Downloadable Files within the course dashboard. See here for a visual guide on how to do this.

What is a CFI?

CFI is the official provider of the global Financial Modeling & Valuation Analyst (FMVA)®. Become a Certified Financial Modeling & Valuation Analyst (FMVA)® CFI's Financial Modeling and Valuation Analyst (FMVA)® certification will help you gain the confidence you need in your finance career.

What are the three financial statements?

The three financial statements are: (1) the Income Statement. Income Statement The Income Statement is one of a company's core financial statements that shows their profit and loss over a period of time. The profit or. , (2) the Balance Sheet.

What is balance sheet?

The balance sheet displays the company’s assets, liabilities, and shareholders’ equity#N#Stockholders Equity Stockholders Equity (also known as Shareholders Equity) is an account on a company's balance sheet that consists of share capital plus#N#at a point in time. As commonly known, assets must equal liabilities plus equity. The asset section begins with cash and equivalents#N#Cash Equivalents Cash and cash equivalents are the most liquid of all assets on the balance sheet. Cash equivalents include money market securities, banker's acceptances#N#, which should equal the balance found at the end of the cash flow statement. The balance sheet then displays the changes in each major account from period to period. Net income from the income statement flows into the balance sheet as a change in retained earnings#N#Retained Earnings The Retained Earnings formula represents all accumulated net income netted by all dividends paid to shareholders. Retained Earnings are part#N#(adjusted for payment of dividends#N#Dividend vs Share Buyback/Repurchase Shareholders invest in publicly traded companies for capital appreciation and income. There are two main ways in which a company returns profits to its shareholders – Cash Dividends and Share Buybacks. The reasons behind the strategic decision on dividend vs share buyback differ from company to company#N#).

What is the first place an investor or analyst will look?

Often, the first place an investor or analyst will look is the income statement. The income statement shows the performance of the business throughout each period, displaying sales revenue. Sales Revenue Sales revenue is the income received by a company from its sales of goods or the provision of services.

What is net income?

From there, the gross profit is affected by other operating expenses and income, depending on the nature of the business, to reach net income. Net Income Net Income is a key line item, not only in the income statement, but in all three core financial statements.

What are the three financial statements?

Three Financial Statements The three financial statements are the income statement, the balance sheet, and the statement of cash flows. These three core statements are.

What is cash flow statement?

With the income statement and balance sheet under our belt, let’s look at the cash flow statement#N#Cash Flow Statement​ A cash flow Statement contains information on how much cash a company generated and used during a given period.#N#and all the insights it tells us about the business.

What is the Dupont analysis?

DuPont Analysis In the 1920s, the management at DuPont Corporation developed a model called DuPont Analysis for a detailed assessment of the company’s profitability. By constructing the pyramid of ratios, you will gain an extremely solid understanding of the business and its financial statements.