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Introduction to Analyzing Financial Statements

Description: Introduction to Analyzing Financial Statements presents the tools needed to analyze financial statements with confidence. This course reviews the importance of analyzing financial statements in the small business lending process, and teaches the terms and steps associated with analyzing financial statements, including the income statement, the balance sheet and the cash flow statement. This course will also explain how tax returns report income and expenses from a different perspective. This course examines the computation and meaning of four categories of financial ratios and how ratios are used to spot significant trends.

Audience: Bank personnel who are responsible for reviewing financial statements for the purpose of assisting in making lending decisions, monitoring the ongoing health of the business, or conducting the initial financial analysis.

Learning Objectives: After completing this course, students will be able to:

  • Define financial statement analysis and explain its importance in the small business lending process

  • List the basic steps of financial statement analysis and the purpose of each step

  • Analyze an income statement and balance sheet

  • Explain how tax returns are used in the lending process

  • Calculate and interpret key ratios

  • Perform a simple cash flow analysis

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