Course Overview

Bankers need to analyze (not prepare) financial statements to assess a company's creditworthiness. RMA's Accounting and Ratio Analysis will prepare learners to know how to analyze financial statements and not just know about the process.

     

Duration

3.5 hours

Delivery

Self-Directed Online

Program Level

Foundational

 

Prerequisites

None

 

 

Who Will Benefit?

Bankers who need an introduction to accounting and ratio analysis will benefit from the course.

   

Learning Objectives

Upon completion of this course, participants will be able to:

• Understand Generally Accepted Accounting Principles (GAAP).
• Describe the general characteristics and format of the Income Statement and the Balance Sheet.
• Explain the meaning of the accounting equation.
• Describe the effect of simple business transactions on the accounting equation.
• Describe examples of accrual accounting's revenue recognition and matching principles. 
• Explain the difference between accrual and cash methods of accounting.
• Identify and describe three major categories of expense typically included on the Income Statement.
• Accurately calculate financial ratios that measure growth, profitability, liquidity, activity, leverage, and debt service coverage.
• Interpret the financial ratios to identify borrowing strengths and weaknesses of a case study example.

Methodology:

Through this course, learners will analyze the financial statements of a small business. Along the way, learners will discover how the income statement and balance sheet relate to each other; follow the money invested, spent, and earned as it impacts the accounting equation; and explore the difference between cash-basis and accrual accounting. Finally, learners will conduct a “bottom line” analysis of the company to assess its continued ability to perform and repay bank debt.