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Level 5 Diploma in Accounting and Business

Financial Analysis: Profitability and Liquidity

AB504 · Financial Reporting — Week 9 of 16

CourseAB504
Week9 of 16
SemesterII
TutorOnline in the course chat

This week’s topics

Financial Analysis: Profitability and Liquidity

  1. Horizontal and vertical statement analysis
  2. Operating margin and ROCE
  3. Current and quick liquidity ratios
  4. The Tools of Financial Statement Analysis
  5. Short-term Liquidity Ratios | Financial Statement Analysis
  6. ROE vs. ROCE

What you will be able to do

  • 4.1 Analyse the financial statements of a business.
  • 4.2 Evaluate the financial performance of a business.

Activity

Start with this week’s 3 videos, then: Seminar, guided reading and a short written task: analyse the financial statements of a business.

Study materials

Videos

  • The Tools of Financial Statement Analysis · YouTube · Edspira · 11 min · for registered students
  • Short-term Liquidity Ratios | Financial Statement Analysis · YouTube · Edspira · 12 min · for registered students
  • ROE vs. ROCE · YouTube · Edspira · 7 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. 6.3 and 6.6: Liquidity and profitability ratios · PDF · OpenStax, textbook chapter; pp. 168–181 · 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: Financial Reporting Frameworks
  • Week 2: Budgeting Approaches and Strategy
  • Week 3: Variance Analysis and Budget Monitoring
  • Week 4: Principles and Preparation of Control Accounts
  • Week 5: Control Account Analysis and Internal Reporting
  • Week 6: Traditional Investment Appraisal
  • Week 7: Discounted Cash Flow and Investment Reporting
  • Midterm: Midterm evaluation
  • Week 9: Financial Analysis: Profitability and Liquidity
  • Week 10: Financial Analysis: Efficiency and Solvency
  • Week 11: Communicating Financial Information
  • Week 12: Applying Financial Reporting in practice: case studies
  • 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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