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Level 5 Diploma in Accounting and Business

Financial Analysis: Efficiency and Solvency

AB504 · Financial Reporting — Week 10 of 16

CourseAB504
Week10 of 16
SemesterII
TutorOnline in the course chat

This week’s topics

Financial Analysis: Efficiency and Solvency

  1. Working capital cycle metrics
  2. Gearing and interest cover ratios
  3. Holistic financial performance evaluation
  4. Long-term Solvency Ratios | Financial Statement Analysis
  5. Operating Cycle vs. Cash Conversion Cycle | Financial Statement Analysis

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 2 videos, then: Seminar, guided reading and a short written task: analyse the financial statements of a business.

Study materials

Videos

  • Long-term Solvency Ratios | Financial Statement Analysis · YouTube · Edspira · 12 min · for registered students
  • Operating Cycle vs. Cash Conversion Cycle | Financial Statement Analysis · YouTube · Edspira · 7 min · for registered students
  • Cash Conversion Cycle · YouTube · Edspira · 5 min · for registered students
  • Activity Ratios (Efficiency Ratios) | Financial Statement Analysis · YouTube · Edspira · 7 min · for registered students
  • Capital Structure and Financial Ratios – Operating Gearing - ACCA Financial Management (FM) · YouTube · OpenTuition · 17 min · for registered students
  • Ratios 2 - Efficiency.mp4 · YouTube · Econo McCall · 13 min · for registered students

Further resources

  • Principles of Finance 2e, ch. 6: Measures of Financial Health · PDF · OpenStax, textbook chapter; pp. 175–200 · for registered students
  • Introduction to Financial Accounting, Lyryx 2023-A, ch. 12: Financial Statement Analysis · PDF · Other, textbook chapter; pp. 489–532 · for registered students
  • Managerial Accounting, ch. 13: How Do Managers Use Financial and Nonfinancial Performance Measures? · PDF · Saylor Academy, textbook chapter; pp. 883–972 · for registered students
Materials marked “for registered students” open in the student portal, which is set up as soon as you receive final acceptance.
Week 9Week 11
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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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