Financial Accounting

1. Analysis and Interpretation of Financial Statements
   1. Ratio Analysis
      1. Liquidity Ratios
         1. Current ratio
         2. Quick ratio (acid-test ratio)
         3. Cash ratio
      2. Solvency Ratios
         1. Debt to equity ratio
         2. Interest coverage ratio
         3. Debt to total assets ratio
      3. Profitability Ratios
         1. Return on assets (ROA)
         2. Return on equity (ROE)
         3. Gross profit margin
         4. Net profit margin
         5. Operating margin
      4. Efficiency Ratios
         1. Inventory turnover
         2. Receivables turnover
         3. Payables turnover
         4. Asset turnover ratio
   2. Trend Analysis
      1. Definition and purpose of trend analysis
      2. Techniques for identifying trends over time
         1. Line graphs
         2. Moving averages
      3. Application to financial statements
         1. Identifying growth trends
         2. Analyzing expense patterns
         3. Evaluating changes in key financial metrics
   3. Comparative Analysis
      1. Horizontal Analysis
         1. Comparison of financial data across several periods
         2. Percentage change calculation
         3. Usage for identifying growth patterns
      2. Vertical Analysis
         1. Analysis of each component of the financial statement as a percentage of a total amount
         2. Common size analysis for income statements and balance sheets
         3. Interpretation of financial statement structure
   4. Common Size Financial Statements
      1. Purpose and advantages
         1. Facilitates comparison across companies of different sizes
         2. Normalizes financial data
      2. Methods of preparation
         1. Income statement common sizing
         2. Balance sheet common sizing
      3. Analytical applications
         1. Comparison of cost structures
         2. Evaluation of financial health across firms
   5. Use of Financial Ratios and Analysis Techniques
      1. Financial health assessment
         1. Evaluating liquidity and solvency
         2. Profitability assessment
      2. Performance benchmarking
         1. Against industry standards
         2. Against competitors
      3. Identifying financial strengths and weaknesses
   6. Limitations of Financial Statement Analysis
      1. Impact of accounting policies and estimates
         1. Different depreciation methods
         2. Inventory valuation impacts
      2. Non-financial factors considerations
         1. Market conditions
         2. Management practices
      3. Historical data limitations
         1. Focus on past performance
         2. Lack of forward-looking information
   7. Integration with Strategic Decision Making
      1. Role in business strategy formulation
      2. Impact on operational decisions
      3. Financial forecasts and budgeting influences
   8. Advanced Analytical Techniques
      1. DuPont analysis
         1. Breakdown of ROE into component parts
         2. Importance of margin, turnover, and leverage
      2. Altman's Z-score
         1. Assessment of bankruptcy risk
         2. Components of the Z-score model
         3. Interpretation and limitations
   9. Interpretation of Comprehensive Income
      1. Components of comprehensive income
         1. Other comprehensive income items
         2. Total comprehensive income interpretation
      2. Impact on overall financial analysis
         1. Connection to net income
         2. Influence on equity adjustments
   10. Use of Financial Analysis in Valuation
       1. Financial statement analysis as a basis for valuation
       2. Connection to discounted cash flow models
       3. Weighting of earnings multiples in valuation process