Financial Statement Analysis 1, old

This is an introductory course in financial (accounting) statements and their analysis.  It reviews the basic financial statements, quality issues in using these statements, and the analysis of these statements for the purposes of making credit decisions.

This is an on-line self-paced course.  You will study the text and view the lectures, which are composed of power point slides and an audio track.  The lectures explain and expand on the material in the text and explain its relevance to trade credit-granting decisions.  Lectures are by Dr. Frederick C. Scherr, Professor of Finance (Emeritus), West Virginia University. Longer description of course here.

The purchase of this course includes a copy of the required text, Lyn M. Fraser and Aileen Ormiston, Understanding Financial Statements, Custom Edition, Pearson Learning Solutions.  The text will be mailed to you within 5 business days of the date of enrollment.

Chapter 1 - Financial Statement Overview

This module presents an overview of the financial statements of commercial firms. Students first read chapter 1 of Understanding Financial Statements, NACM’s custom edition, by Lyn M. Fraser and Aileen Ormiston, then view the on-line presentation. Topics covered include: why and when financial analysis is necessary in marking credit decisions; the nature of the trade creditor’s claim relative to that of other financial stakeholders; types of financial statements; liability issues and their effect on financial reporting; and limitations in using accounting data. There is no problem assignment for this module.

Speaker Bio:

Dr. Frederick C. Scherr is a Professor Emeritus of Finance at the College of Business and Economics at West Virginia University, where he taught for 30 years and won both the College’s Outstanding Teacher and Outstanding Researcher awards.  He is the author of more than 30 research articles, four textbooks, and many articles in professional publications such as The Credit and Financial Management Review, The Credit Manager, and Business Credit.  He has done extensive work in adult education for the National Association of Credit Management, including teaching at the Graduate School of Credit and Financial Management, and for private corporations.

Chapter 2 - The Balance Sheet

This module covers the balance sheet, one of the basic financial statements. Students first read chapter 2 of Understanding Financial Statements, NACM’s custom edition, by Lyn M. Fraser and Aileen Ormiston, then view the on-line presentation. Topics covered include: the effect of the legal form of the debtor on the balance sheet, taxes, and liability for debts; entries on the balance sheet and what each represents; structure of the balance sheet; how dollar values for balance sheet entries are computed; and an introduction to the working capital cycle. The module concludes with a problem assignment with problems on deferred taxes, inventory accounting, and balance sheet structure.

Speaker Bio:

Dr. Frederick C. Scherr is a Professor Emeritus of Finance at the College of Business and Economics at West Virginia University, where he taught for 30 years and won both the College’s Outstanding Teacher and Outstanding Researcher awards.  He is the author of more than 30 research articles, four textbooks, and many articles in professional publications such as The Credit and Financial Management Review, The Credit Manager, and Business Credit.  He has done extensive work in adult education for the National Association of Credit Management, including teaching at the Graduate School of Credit and Financial Management, and for private corporations.

Chapter 3 - Income & Statement of Stockholders’ Equity

This module covers the income statement and the statement of shareholders’ equity. Students first read chapter 3 of Understanding Financial Statements, NACM’s custom edition, by Lyn M. Fraser and Aileen Ormiston, then view the on-line presentation. Topics covered include: entries on the income statement; relevance of the income statement for creditors; subtotals on the income statement; why the entries on income statement are ordered in the way they are; and reconciling income statement figures to changes in equity. The module concludes with a problem assignment on the structure of the income statement.

Speaker Bio:

Dr. Frederick C. Scherr is a Professor Emeritus of Finance at the College of Business and Economics at West Virginia University, where he taught for 30 years and won both the College’s Outstanding Teacher and Outstanding Researcher awards.  He is the author of more than 30 research articles, four textbooks, and many articles in professional publications such as The Credit and Financial Management Review, The Credit Manager, and Business Credit.  He has done extensive work in adult education for the National Association of Credit Management, including teaching at the Graduate School of Credit and Financial Management, and for private corporations.

Chapter 4- Statement of Cash Flows

This module covers the statement of cash flows, which is derived from the firm’s balance sheets and income statement. Students first read chapter 4 of Understanding Financial Statements, NACM’s custom edition, by Lyn M. Fraser and Aileen Ormiston, then view the on-line presentation. Topics covered include: the types of cash flows within the cash flow statement; how to generate a cash flow statement if the debtor does not provide one; and why the cash flow statement is particularly relevant for creditors. The module concludes with a problem assignment on generating the cash flow statement from the debtor’s balance sheets and income statement, and a case analysis of cash flows.

Speaker Bio:

Dr. Frederick C. Scherr is a Professor Emeritus of Finance at the College of Business and Economics at West Virginia University, where he taught for 30 years and won both the College’s Outstanding Teacher and Outstanding Researcher awards.  He is the author of more than 30 research articles, four textbooks, and many articles in professional publications such as The Credit and Financial Management Review, The Credit Manager, and Business Credit.  He has done extensive work in adult education for the National Association of Credit Management, including teaching at the Graduate School of Credit and Financial Management, and for private corporations.

Chapter 5 - The Analysis of Financial Statements

This module covers the use of financial statements in making credit-granting decisions. Students first read chapter 5 of Understanding Financial Statements, NACM’s custom edition, by Lyn M. Fraser and Aileen Ormiston, then view the on-line presentation. Topics covered include: types of financial ratios and what each measures; how firms make capital structure and liquidity decisions; trend analysis and graphing of ratios; comparison of ratios to industry averages; and types of ratios that are most relevant to trade creditors. The module concludes with a case study which requires the computation and interpretation of a debtor’s ratios and cash flows.

Speaker Bio:

Dr. Frederick C. Scherr is a Professor Emeritus of Finance at the College of Business and Economics at West Virginia University, where he taught for 30 years and won both the College’s Outstanding Teacher and Outstanding Researcher awards.  He is the author of more than 30 research articles, four textbooks, and many articles in professional publications such as The Credit and Financial Management Review, The Credit Manager, and Business Credit.  He has done extensive work in adult education for the National Association of Credit Management, including teaching at the Graduate School of Credit and Financial Management, and for private corporations.

Appendix 3A: A Guide to Earnings Quality

This module covers financial statement quality, which concerns the degree to which accounting statements capture debtor’s actual financial situation. Students first read Appendix 3A of Understanding Financial Statements, NACM’s custom edition, by Lyn M. Fraser and Aileen Ormiston, then view the on-line presentation. Topics covered include: the quality of earnings; reserve for bad debt and the actual value of accounts receivable; inventory writedowns; restating the balance sheet; unintentional and intentional errors in financial statements; and the basics of fraud by false financial statement. There is no problem assignment for this module.

Speaker Bio:

Dr. Frederick C. Scherr is a Professor Emeritus of Finance at the College of Business and Economics at West Virginia University, where he taught for 30 years and won both the College’s Outstanding Teacher and Outstanding Researcher awards.  He is the author of more than 30 research articles, four textbooks, and many articles in professional publications such as The Credit and Financial Management Review, The Credit Manager, and Business Credit.  He has done extensive work in adult education for the National Association of Credit Management, including teaching at the Graduate School of Credit and Financial Management, and for private corporations.