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How to Read & Understand a Financial Statement

Length: 2 hours 29 minutes

As lawyers, understanding how to read financial statements of clients you are working with will help you evaluate their financial health, allow you identify current and potential problems and possibly understand the motives driving certain business decisions.

When properly prepared, financial statements not only tell you a company’s financial history, but provide insight to where a company is going.

This course will discuss the following:

•    The quality & reliability of financial statements based upon the opinion issued
•    The importance of the statement of cash flows
•    Liabilities - balance sheet & off-balance sheet commitments
•    Transactions required to be recorded vs. disclosed
•    Business actuations & more

Agenda

9:00 - 9:10 am        Introduction & Overview

9:10 - 10:00 am    Typical Financial Statement Users        
Assessing Quality: Looking Out for Landmines
•    Purpose/benefits for internal & external users
•    Quality of financial statements-what to look out for
•    Lasted accounting trends

10:00 - 10:20 am    The Importance of Cash Flow     

10:20 - 10:30 am    Break

10:30 - 11:05 am    Analyzing Financials: What You Need to Know     
•    Significant ratios used for analyzing liquidity, profitability, leverage and activity
•    Application: Using ratios to better assess the health of a business
•    Understanding liabilities  

11:05 - 11:35 am    Employee Stock Options, Fair Value, Credit Risk Analysis, &
     Valuation         
•    Employee Stock Options
•    Fair Value Reporting
•    Business Valuation 101: The basic approaches
•    Valuation and Forecasting: Does earning quality affect the result?

11:35 - 11:45 am       Questions & Closing Remarks     

CLE credit: New York & New Jersey: 3.0 skills. California & Pennsylvania: 2.5 general MCLE.


Original Recording Date: 11/14/2014


Produced By:

New York City Bar Association

Course Materials

  • How to Read and Understand a Financial Statement Coursebook
  • Affirmation of Self-Study