Would you like to learn how to invest in listed companies, deepen your understanding of financial analysis, or build on your knowledge of the dynamics of valuation? Then MasterStart’s Financial Analysis for Investment course is for you!
We take a look at how this in-depth course – the perfect follow-up course for those who completed the Finance for Non-Financial Managers – will elevate your financial analysis skills and use the story it tells to guide business decisions. Once you’ve acquired these skills, we will show you how to dive into the financial data of listed companies and how to value a listed JSE company, from assessing and motivating the sales growth expectations to cash flow forecasts and the impact of the cost capital on the valuation.
Why learn financial analysis for investing?
Gaining insight into the processes successful managers and business owners use to make investment decisions can be hard to come by. That’s when taking a course in financial analysis can provide you with the skills and tools needed to understand how the financial metrics of a company inform its capability to create value. For example, it can help to:
- Improve existing accounting and financial expertise by developing a deeper understanding of fundamental financial analysis.
- Discover good quality investment candidates among listed companies.
- Develop and build on your understanding of the dynamics of valuation.
- Develop fundamental financial skills and the effects of the economy on your investment portfolio.
- Be introduced to important intermediary paths.
If the financial analysis course you take includes networking opportunities, like the industry professionals and peers you’ll meet when taking our course, you could end it with both new connections and new knowledge. The certification you’ll earn will also ensure you make impactful decisions at work and stand out in a competitive job market.
Skills you need to conduct financial analysis for investments
Fundamental analysis is using reports and information that is publicly available to determine whether a stock and the issuing company are valued correctly. There are two types of fundamental analysis – quantitative and qualitative, and when conducting an analysis, you start with economic analysis, then analyse the industry, and then the company.
Financial and investment ratios
Financial ratios are useful to determine how well the company is actually doing. Ratios used in financial analysis include:
- Profitability ratios – how profitable the company is
- Liquidity ratios – how available its assets are
- Leverage ratios – how dependent a company is on debt to others
- Activity ratios – how effectively a company utilises its resources
Value creation and the levers of company value
Business owners create value for investors by delivering consistently high returns on their capital, which depends on strong revenue growth and attractive profit margins. Value levers are the actions that a company takes to influence its value drivers – factors that increase the worth of a product, service, asset or business – such as reducing costs, increasing sales, investing in innovation, improving efficiency, or managing risk.
Financial and investment jargon
You will come across some unfamiliar terms during the course, but they’re key to understanding – and being able to talk about – finance and investment. Below are some good sources to familiarise yourself with as you get started:
- JP Morgan: Glossary of Investment Terms
- NASDAQ: 20 investment terms you need to know
- Investopedia: Financial Terms Dictionary
Calculate the value of companies
JSC listing requirements make it mandatory for public companies to publish their financial results, which provides a variety of ways to calculate the value-creation capability of a company. You’ll conduct research into the company’s balance sheet, income statement and cash flow statement, Earnings Per Share (EPS) and Price to Earnings Ratio (P/E), book value vs market value, etc.
Understand the various types of shares
Listed companies sell shares to raise the money they need to expand or grow their business. These are the different types of shares:
- Ordinary shares: shares that the business issues (sells) to raise capital (funds) for the business.
- Preference shares: shares which may be cumulative, non-cumulative, participating, redeemable, and/or convertible.
- Deferred shares: these may be founders’ shares, vendors’ shares, promoters’ shares, and/or management shares.
Ideal candidates for a course in Financial Analysis for Investment
Our course is specifically structured for:
- Those with financial and accounting knowledge but who want a greater understanding of the fundamentals of financial analysis.
- Those who want to invest in listed companies and want to learn how to identify good-quality investment candidates.
- Financial managers with strong accounting knowledge but want to build on their understanding of the dynamics of valuation.
- Those who have completed a fundamentals programme in finance and want to take their financial and investment skills to the next level.
Learn financial analysis with MasterStart
If we’ve piqued your interest in our Financial Analysis for Investment online short course, we welcome you to download the brochure to find out more about the modules and course outline.
We are confident that our world-class, humanised learning experience will equip graduates with the knowledge to dive right into financial analysis, whether they’re an individual wanting to gain marketable skills or a business owner or financial manager wanting to up their skills and help their company make sound investment decisions.