This course can benefit accountants, as well as business managers, who want to understand how financial ratios and other forms of analyses can be used to evaluate a business. This course also covers the investment classifications and investment accounting used by companies to record investments within their financial statements.,/p>

Learning Objectives

Financial Statement Analysis

• Describe the various company evaluation techniques including vertical, horizontal, and ratio analysis that can be used.
• Demonstrate an understanding of various company ratios for liquidity and efficiency, solvency, profitability, and market prospects.
• Compute various company ratios for liquidity and efficiency, solvency, profitability, and market prospects.
• Compute the DuPont Analysis given the appropriate company information.

Accounting for Debt Security Investments

• Demonstrate an understanding of basic bond valuation including recording a bond acquisition and interest revenue.
• Describe the various accounting classifications including held-to-maturity, trading, and available-for-sale for debt securities.
• Demonstrate an understanding of sales and impairments of debt investments.
• Demonstrate an understanding of the financial statements presentations, international reporting standards, and the fair value option of debt investments.

Accounting for Equity Security Investments

• Discuss what is meant by significant influence and how it affects the accounting classification of equity investments.
• Explain the recording of the purchase of equity investments.
• Demonstrate an understanding of how dividends, changes in fair value, impairment, and the sale of an equity investment are recorded under the fair value through the net income approach.
• Explain the financial statement presentation under the fair value through the net income approach.
• Demonstrate an understanding of the recording of investment revenue, receipt of dividends, and additional adjustments under the equity method approach.
• Explain the financial statement presentation under the equity method approach.
• Discuss the fair value option under the equity method approach.
• Demonstrate an understanding of the recording of investment revenue, receipt of dividends, and recording of additional adjustment under the equity method approach.
• Demonstrate an understanding of the consolidation method including the concept of noncontrolling interest and the consolidated financial statements.

Berkshire Hathaway Financial Statement Example

• Explain where various investment types are presented within the financial statements