Course Content
Financial Analysis
Key Learning Points: • Part one Understanding core financial statements and their interrelationships. Performing key financial ratio analysis for performance evaluation. • Part two Assessing business viability and investment attractiveness. Preparing compelling loan applications. • Part three Evaluating strategic initiatives through cost-benefit analysis.
0/19
Self-learning guide
Lesson 1: Financial Statement
What is an Income Statement
Key Terms in the Income Statement
Step-by-Step: Preparing Your Income Statement
Tool: Income Statement Template
Mini Case Study: Selamawit’s First Quarter Income Statement
Mini Quiz: Income Statement Knowledge Check
00:20:00
Lesson 2: Understanding the Balance Sheet
Components of a Balance Sheet
Step-by-Step: Preparing Your Balance Sheet
Tool: Balance Sheet Template
Mini Quiz: Balance Sheet Knowledge Check
00:20:00
Lesson 3: Understanding the Cash Flow Statement
Components of a Cash Flow Statement
Step-by-Step: Preparing Your Cash Flow Statement
Tool: Cash Flow Statement Template
Mini Case Study: Yohannes’s First Quarter Cash Flow
Mini Quiz: Cash Flow Statement Knowledge Check
00:20:00
Analyzing Your Business Financial Health
Now that you understand the three main financial statements, it's time to use them to gain insights into your business's financial health. We'll use financial ratios, which are powerful tools to compare different aspects of your statements and identify trends.
0/10
Lesson 1: Assessing Profitability (Using the Income Statement)
Key Profitability Ratios
Step-by-Step: Analyzing Your Profitability
Mini Quiz: Profitability Ratios
00:15:00
Lesson 2: Evaluating Operational Stability & Creditworthiness (Using the Balance Sheet)
Liquidity Ratios
Solvency Ratios
Step-by-Step: Analyzing Liquidity and Solvency
Mini Quiz: Liquidity and Solvency Ratios
00:20:00
Financial Report Template
Main Quiz
Overall Course Quiz
0/1
Overall Course Quiz
00:30:00
Online Self-Assessment Checklist
Use this checklist to assess your readiness to apply financial analysis in your business. Tick 'Yes' if you feel confident, 'No' if you need more practice.
0/1
Self-Assessment Checklist
Key Learning Points
0/1
Learning Points
Glossary of Key Terms
0/1
Glossary
FAQs
0/1
FAQs with Answers to Addressing Common Challenges
Investment Readiness: Pitch Decks & Loan Applications
● Start Here: Begin by reviewing the Module Introduction to understand the scope. ● Navigate Lessons: Each lesson provides objectives, definitions, examples, and mini-quizzes. ● Complete Templates: Utilize provided tools and templates to apply concepts. ● Review Case Studies: Analyze real-world scenarios to deepen understanding. ● Take Quizzes: Test your knowledge with online mini-quizzes throughout and a comprehensive main quiz at the end.
0/10
Lesson 1: Understanding Investment Readiness
Mini Case Study: Yohannes’s Investment Readiness Check
Mini Quiz: Investment Readiness
00:20:00
FAQs: Investment Readiness
Lesson 2: Crafting Your Pitch Deck
Tool: Pitch Deck Outline Template
Lesson 3: Loan Applications
How To: Prepare a Strong Loan Application
Tool: Loan Application Checklist
Key Glossary Terms
Cost-benefit analysis of adding after-sales service
0/6
Lesson 1: Understanding Cost-Benefit Analysis (CBA)
Lesson 2: After-Sales Service in Clean Cooking
Lesson 3: Performing a Cost-Benefit Analysis for After-Sales Service
Main Quiz:
00:20:00
Key learning point:
FAQs: Cost-Benefit Analysis
Financial Analysis and Growth Planning

How To: To prepare your Income Statement, you’ll need to gather information on your sales and expenses for a specific period.

Step 1: Choose Your Period. Decide if you want to prepare your Income Statement for a month, quarter, or a full year. For new businesses, starting with monthly or quarterly is often easier.

Step 2: Calculate Your Total Revenue.

  • Add up all the money your business earned from selling solar cookers, clean cookstoves, biofuel briquettes, or any related services during your chosen period.
  • Example Jemal In January sold 50 solar cookers at ETB 2000 each. His total revenue for January would be 50×2000=ETB 100,000.

Step 3: Calculate Your Cost of Goods Sold (COGS).

  • Add up the direct costs of the products you sold. This includes the raw materials or purchase cost of the items, and any direct labor involved in assembling them.
  • Example for jemal: Each solar cooker he sold cost him ETB 1200 (for parts and assembly labor). So, COGS for 50 cookers would be 50×1200=ETB 60,000.

Step 4: Calculate Your Gross Profit.

  • Subtract COGS from your Total Revenue.
  • Example for Jemal: Gross Profit=ETB 100,000(Revenue − ETB 60,000(COGS)=ETB 40,000.

Step 5: List and Sum Your Operating Expenses.

  • Think about all the expenses incurred in running your business that are not direct costs of goods sold.
  • Example Selamawit Plans to open a small shop offering clean cookstoves and biofuel briquettes:
    • Shop rent: ETB 5,000
    • Salaries for part-time assistant: ETB 3,000
    • Marketing flyers: ETB 500
    • Utilities (electricity, water): ETB 1,000
    • Total Operating Expenses = 5,000+3,000+500+1,000=ETB 9,500.

Step 6: Calculate Your Earnings Before Interest and Tax (EBIT).

  • Subtract your Total Operating Expenses from your Gross Profit.
  • Example (continuing Selamawit’s scenario with assumed Gross Profit of ETB 25,000): EBIT=ETB 25,000(Gross Profit)−ETB 9,500(Operating Expenses)=ETB 15,500.

Step 7: Account for Interest and Tax Expenses (if applicable).

  • If you have loans, subtract any interest payments.
  • Subtract any tax expenses (you might consult an accountant for this initially).
  • Example (continuing Selamawit): If Selamawit paid ETB 500 in loan interest and ETB 1,000 in taxes for the month.
    • Net Profit=ETB 15,500(EBIT)−ETB 500(Interest)−ETB 1,000(Taxes)=ETB 14,000.
Previous
Next
Scroll to Top