RX Connect: Bespoke Forensic Accounting Training

 

Client Request


Provide bespoke forensic accounting training to a senior portfolio manager recently transferred from the legal department for a large debt fund

ReachX Solution


After a consultation with the portfolio manager, ReachX suggested a bespoke course (2hr per week) at the client's office with a ReachX advisor who has over 35 years of buy-side and sell-side investment analysis experience to deliver a forensic accounting course designed to help detect earnings manipulation using over 100 real life examples and 6 in-depth case studies

ReachX is currently in discussions to rollout this program to the client's analysts and junior portfolio managers

Part I - Financial Accounting & Company Accounts

1 - Report and Accounts

What to look at first; how to read the audit report; contingencies note and related parties note

2 - Balance Sheet

Fixed assets; intangible assets; investments; working capital ratios; net debt; provisions and the importance of capital structure

3 - Income Statement

Revenue and historic growth; Gross Margin; EBITDA - and drawbacks; EBIT and Margin; Interest; Tax; Associates; Minorities; Earnings; Exceptional Items; GAAP vs non-GAAP

4 - Cash Flow Statement

Structure of cash flow statement; distinction between cash and net debt movements; reformatting the cash flow to "make more sense"; sustainable cash flow; free cash flow - various definitions

5 - Other statements and company publications

Statement of comprehensive income; directors report; remuneration report

6 - Ratio Analysis

P&L Ratios; balance sheet ratios; debt vs liquidity ratios; returns on capital

7 - Valuation

DCF and its failings; Valuation Multiples; What to Use When and Why

Part II - Forensic Accounting

1 - The Theory

Why this is important, Bad actors and case studies Issues with recognition of revenue and what to watch for How companies manipulate expenses and other tricks used to inflate profit

2 - Detection

Warnings signals to watch for Tools and ratios used by short sellers and forensic accountants; Balance sheet parameters - what to look for and examples P&L tricks, ratios and company examples Cash flow: common tricks and company examples

 

ReachX
1-15 Clere Street, EC2A 4UY
London, United Kingdom
info@reachx.co
ReachX
1-15 Clere Street, EC2A 4UY
London, United Kingdom

info@reachx.co
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