Denver – March 30, 2004.pptVIP

Axiomate, Inc. Financial Statement Analysis: Denver – March 30, 2004 Introduction and Understanding Specific Interests Eric Edwards – Axiomate, Inc. Jeff Holben – E2 Business Services, Inc. What Participants Hope to Get from Seminar Purpose of Class Understand the basics of financial presentation Understand where the numbers come from and what they mean. Introduction to the “art of accounting” or the objective v. subjective Understand the basics of financial instruments Understand the basics of deal evaluation Our Day Walkthrough the Financial Statements Discuss each major line item: What the number means Source of the number Evidentiary matter behind the number Hard side of number The extent to which the number is OBJECTIVE Soft side of number The extent to which the number is SUBJECTIVE The One Sided Entry For every action (Dr.) there is an equal and opposite reaction (Cr.) Look at footnotes Walk through the S-1 Turn you lose on the numbers, maybe Types of Org. Structures What Type of Org. Structure Purpose of Financial Statements Used by: Equity Shareholders Banks and Financial Creditors Customers and Suppliers Potential Investors Management and Board Purpose of Financial Statements Equity Shareholders Monitoring Investment Management Banks and Financial Creditors Analyzing Risk For Credit Decisions Customers and Suppliers Analyzing Risk For Credit Decisions Potential Investors Analyzing Risk for Investment Decision Management and Board Business Management / Oversight Purpose Comfort from Risk Credit Risk Investment Risk Management Risk Employment Risk Purchase Risk Purpose of Financial Statements Offense – Statement preparers Vs Defense – Statement Users ( Auditors) Example Companies Netflix, Inc. (Simpler) Symbol: NFLX (NASDAQ) Total Revenues of $150 million Rapidly growing, entrepreneurial company Aspen Technology, Inc. (Complex) Symbol: AZPN (NASDAQ) Total Revenues of $320 million Complex, struggling company Core Financial Statements