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Level 4 Diploma in Accounting and Business

Financial Statement Analysis and Interpretation

AB403 · Principles of Financial Accounting — Week 9 of 16

CourseAB403
Week9 of 16
SemesterI
TutorOnline in the course chat

This week’s topics

Financial Statement Analysis and Interpretation

  1. Profitability and gross margin ratios
  2. Liquidity and working capital indicators
  3. Solvency and gearing measures
  4. Limitations of financial ratio analysis
  5. FINANCIAL RATIOS: How to Analyze Financial Statements
  6. Short-term Liquidity Ratios | Financial Statement Analysis
  7. Long-term Solvency Ratios | Financial Statement Analysis

What you will be able to do

  • 1.2 Explain the importance of liquidity and solvency in business.
  • 3.4 Analyse the financial statements of a selected business.

Activity

Start with this week’s 3 videos, then: Seminar, guided reading and a short written task: explain the importance of liquidity and solvency in business.

Study materials

Videos

  • FINANCIAL RATIOS: How to Analyze Financial Statements · YouTube · Accounting Stuff · 24 min · for registered students
  • Short-term Liquidity Ratios | Financial Statement Analysis · YouTube · Edspira · 12 min · for registered students
  • Long-term Solvency Ratios | Financial Statement Analysis · YouTube · Edspira · 12 min · for registered students

Further resources

  • Introduction to Financial Accounting, Lyryx 2023-A, ch. 12: Financial Statement Analysis · PDF · Other, textbook chapter; pp. 489–532 · for registered students
  • Principles of Finance 2e, ch. 6: Measures of Financial Health · PDF · OpenStax, textbook chapter; pp. 175–200 · for registered students
  • Introduction to Business 2e, ch. 14.7: Analysing financial statements · PDF · OpenStax, textbook chapter; pp. 492–495 · for registered students
Materials marked “for registered students” open in the student portal, which is set up as soon as you receive final acceptance.
MidtermWeek 10
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Admitted students ask questions on this week’s page in the student portal: an AI assistant trained on the course answers first, and during the course’s timetabled classes Connect to your tutor brings your tutor into the chat, who may start a call if needed.

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Course plan
  • Week 1: Foundations of Financial Accounting and Record-Keeping
  • Week 2: The Double-Entry Bookkeeping System
  • Week 3: Period-End Financial Concepts and Trading Performance
  • Week 4: Accounting Adjustments for Accruals, Prepayments, and Recei…
  • Week 5: Capital Expenditure and Depreciation of Non-Current Assets
  • Week 6: Financial Statements for Sole Traders
  • Week 7: Partnership Accounting and Reporting
  • Midterm: Midterm evaluation
  • Week 9: Financial Statement Analysis and Interpretation
  • Week 10: Professional Ethics and Conduct in Accountancy
  • Week 11: Accounting Regulation and External Audit Fundamentals
  • Week 12: Applying Principles of Financial Accounting in practice: ca…
  • Week 13: Assignment workshop: research, planning and referencing
  • Week 14: Assignment workshop: drafting, feedback and improvement
  • Week 15: Review and coursework completion
  • Final: Final assessment and submission
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