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The Top Five Accounting Mistakes Analysts Make

Considerations as you prep for Wall Street Prep

Dan Pickett 0 47 Article rating: No rating

Just in case you don't appreciate the importance of financial modeling to investment analysts, we are posting another article on the heels of the invitation to participate in the Wall Street Prep modeling seminar. A solid understanding of accounting, the ability to read and interpret financial statements, and project financial statements forward reflecting your own forecasts are key skills all good analysts have. The Wall Street Prep seminar is an excellent opportunity to develop those skills and the attached article offers some things to consider. Here are some quick comments on the mistakes identified.

Mistake 1 - using generalized accounting statements. Those of you attending our training sessions should recognize this is a point we make about the standardized Factset financial statements versus the "as-reported" financial statements available on that service (and all others like Bloomberg of CapIQ).

Mistake 2 - not understanding the reflexivity/interactivity of the three major financial statements. This is something we discuss (at a basic level) in the 1st Accounting 101 training session. In more advanced discussions we consider how companies finance growth if it requires working capital they don't have (e.g. by issuing equity of debt).

Mistake 3 - not creating apples-to-apples comparisons in time. Also discussed in the accounting session - not usually a big deal, but important to understand.

Mistake 4- not adjusting statements for distortions. More important and critical to conisder, e.g. recognizing acquisitions and divestitures will distort growth calculations, or that accounting differences like using stock-based comp or not can affect different company "adjusted" financials.

Mistake 5 - not reading the footnotes. This is a big one. The footnotes provide excellent information regarding revenue recognition policies and other practices that affect the financials and how you interpret them.

If you are really interested in accounting (and if you want to be an investment analyst you should be :)), there are more financial modeling articles in the Research Readings Folder on the CMC website - here.

 

Wall Street Prep

Financial & Valuation Modeling Virtual Seminar

Dan Pickett 0 39 Article rating: No rating

Hello CMC members,

I hope you are enjoying your summer break so far. As you know, classes will resume on Wednesday, September 2nd (the Wednesday BEFORE Labor Day weekend this year).  For the past few years the Hawk Center has sponsored a financial modeling seminar prior to the start of classes. This year Wall Street Prep will hold a Financial Statement Modeling and Valuation boot camp on Thursday, Aug. 27th and Friday, Aug. 28st in Grainger.  At this point, this boot camp is planned to be offered virtually (this may change as we get closer to the date, but at this point it will be fully virtual.)

Details of what is being offered are described on the attachment. You’ll notice that for the $199 cost you receive a package of benefits at an over 75% discount vs. their current corporate training fees.  In addition to the knowledge you can gain regarding financial statement analysis and valuation, the boot camp involves an Excel shortcut primer that is incredibly useful.  WSP can also be a solid add to your resume and something you can talk about in future interviews.  NOTE – if you are admitted to AEMR or ASAP, you are already registered for the seminar.    

If you are serious about investing, finance, and accounting you should consider attending (ACCOUNTING 100 is a prerequisite for the seminar). The seminar has the potential to help make you a more efficient and professional financial analyst and will better prepare you to interview for jobs in the investments industry.   

If you are interested in attending, follow the registration link on the attachment and please send me an email letting me know. Thanks!

Greg Edwards
Co-Director - Hawk Center for Investment Analysis
Wisconsin School of Business
3547 Grainger Hall
975 University Ave | Madison, WI 53706
P: +1 608-354-4640

Financial Statement Modeling Opportunity

Wall Street Prep - Financial Modeling Boot Camp August 29th and 30th in Grainger

Dan Pickett 0 280 Article rating: No rating

The Hawk Center is sponsoring a financial modeling seminar that will occur August 29th and 30th in Grainger. The seminar assumes a fair amount of accounting knowledge and is intended for students that have already completed ACCT 100 and preferably ACCT 301. This is an excellent opportunity to build your financial modeling skills and brush up on your accounting prior to the Fall semester. The seminar is run by Wall Street Prep, an online provider of financial modeling and valuation education (wallstreetprep.com) and covers Financial Statement Modeling and Valuation.

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