Knowledge Base: Financial Statement Analysis Tutorials

The financial statements – the Income Statement, Balance Sheet, and Cash Flow Statement – are central to everything you do in investment banking, private equity, and other corporate finance roles.

If you understand how to analyze the financial statements and what the key metrics are, you can gain insights into companies’ operations, valuations, and their appeal as acquisition candidates.

A lot of financial statement analysis focuses on measuring companies’ efficiency via metrics such as the Return on Assets (ROA) and Return on Invested Capital (ROIC); you can also focus on their liquidity, ability to generate cash flows, and ability to distribute earnings to their investors.

These metrics do not necessarily “mean” anything in isolation.

You must look at them in conjunction with growth rates, margins, valuations, and the qualitative business case to say anything substantial.

However, financial statement analysis can often point you in the direction of mispriced companies or firms that are worth investigating in more detail.

We present below several examples tutorials related to financial statement analysis from our courses: