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Updated in [July 20th, 2023]

The Level I CFA Prep Course 2023 - Financial Statement Analysis provides an overview of the various financial statement elements (assets, liabilities, equity, revenue, and expenses). It covers the basic and expanded accounting equations, the roles of standard setting bodies and regulatory authorities, the IFRS Framework, and the key differences between IFRS and US GAAP. It also covers the calculation of depreciation, COGS, inventory under different cost flow assumptions, basic and diluted EPS, and the distinction between operating and non-operating items.

The course also covers the various balance sheet accounts, how they are valued, and what they represent, as well as the calculation of financial ratios and the construction of a cash flow statement, by either the direct or indirect method. It also covers the distinction between operating, investing, and financing cash flows, the application of various tools and techniques used in financial analysis, the DuPont formulas to decompose ROE into its components, the different cost flow methods (LIFO, FIFO, and weighted average cost), the calculation of COGS, ending inventory, and gross profit under the different cost flow methods, the distinction between capitalisation and immediate expensing of various costs, the determination of if an asset is impaired, and the methods to revalue an asset.

The course also covers the distinction between taxes payable and income tax expense, the circumstances that lead to deferred taxes, the calculation and making of adjustments to deferred taxes, the calculation of the book value of a bond and the interest expense using the effective interest rate method, the distinction between operating lease and finance lease, the understanding of how accounting methods and estimates can affect reported earnings, financial position, and classification of cash flows, the awareness of warning signs of earnings manipulation, the application of analytic methods to forecast future earnings and cash flows, and the common types of adjustments to financial statements for comparability purposes.

Course Syllabus

Financial Statement Analysis: An Introduction

Financial Reporting Mechanics (removed from 2019 exam onwards)

Financial Reporting Standards

Understanding Income Statements

Understanding Balance Sheets

Understanding Cash Flow Statements

Financial Analysis Techniques

Inventories

Long-Lived Assets

Income Taxes

Non-Current Liabilities

Financial Reporting Quality

Financial Statement Analysis – Applications