CFA® L1 — Financial Statement Analysis

About this course

Reading balance sheets, income statements, and cash flows the way analysts do. The single most exam-weighted topic in Level 1, and the one that separates strong candidates from average ones.

1. 1

   Reading 1

   Introduction to FSA

   • The three statements and their relationships
   • The SEC and IASB filing landscape
2. 2

   Reading 2

   Income statements

   • Revenue recognition
   • Operating, non-operating, and below-the-line items
3. 3

   Reading 3

   Balance sheets

   • Asset, liability, equity classifications
   • Common-size and comparative analysis
4. 4

   Reading 4

   Cash flow statements

   • Direct vs indirect method
   • Operating, investing, financing cash flows
5. 5

   Reading 5

   Financial analysis techniques

   • Activity, liquidity, solvency, profitability ratios
   • DuPont decomposition
6. 6

   Reading 6

   Inventories

   • LIFO, FIFO, weighted average
   • Inventory write-downs and reversals
7. 7

   Reading 7

   Long-lived assets

   • Capitalisation vs expensing
   • Depreciation methods, impairment
8. 8

   Reading 8

   Income taxes

   • Deferred tax assets and liabilities
   • Effective tax rate analysis
9. 9

   Reading 9

   Long-term liabilities and leases

   • Bonds — issuance, amortisation, retirement
   • Operating vs finance leases
10. 10

    Reading 10

    Quality of financial reports

    • Earnings quality red flags
    • Common manipulation patterns and detection