Financial Analysis: Fundamental Analysis of Shares

INTRODUCTION TO FINANCIAL ANALYSIS

• the objectives of financial diagnosis
• accounting standards applied in France
• recall on the records of synthesis
• Recall Accounting Principles
• the use of ratios in financial analysis

INTERIM SALES MANAGEMENT: DEFINITION AND OPERATION

• the income statement published
• production and sales
• gross margin and value added
• Gross operating surplus (GOS)
• Operating income (REX)
• financial result
• Net income
• cash flow (CFO)

ANALYSIS OF BALANCE SHEET

• large masses of liquidity and chargeability
• the main balance sheet adjustments and the development of a corrected balance sheet
• the notion of balance sheet
• the main elements of balance sheet analysis
• analysis of profitability / performance

STATEMENT OF CASH FLOWS AND APPROACH

• Construction of flow charts
• analysis of the need for working capital
• Investment Analysis
• Analysis of business financing

Is it better to buy or rent? How to determine the profitability of an investment? How to choose between two investment projects?

These are the questions that an entrepreneur may have to ask themselves at some point during the life of his company.

But first, it would be worth asking why the investment analysis is so important for an entrepreneur.

Reasons to analyze investment

The reasons are as follows:

1. The performance of an investment is the measure of business success. A company whose return on investment is low not condition the lenders of funds to invest in the company.
2. Once decided, the investment can not be stopped unless incur a cost.
3. A bad investment decision is supported throughout the life of the investment.

It is therefore necessary to analyze investments and analyze them with an appropriate method.

Methods for Investment AnalysisThere are several methods of investment analysis. The most common are:

1. The recovery period (pay back);
2. The return on investment;
3. The method of discounted cash flow.

Each method has advantages and disadvantages. However, the best method is one that will be able to meet three criteria:

1. the method should be a measure of the intrinsic value of an investment project;
2. the method should be able to rank in order of priority investment projects;
3. The method must allow to choose the most profitable project.

The only method that meets the three criteria is the method of discounted cash flow.

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