Financial Statements Analysis

Through financial statements, an organization’s management communicates the true economic picture of their business to external users of financial reports. However, management has superior information about the underlying economic reality of the implemented accounting policies. Due to noise from estimation errors or a distortion from management’s accounting choices (earnings management), the financial statements might not depict a true and fair view. To enable users of financial statements to make substantive assumptions in forecasting an organization’s future performance, an in-depth examination of the financial statements is essential.

“Successful investing is anticipating the anticipations of others”

John Maynard Keynes (05/06/1883 – 21/04/1946), British economist

Van Clamsfield International Ltd. provides a robust sensitivity analysis in order to assess the validity of the financial statements, thereby employing:

1. An examination of the organization’s business strategy, competitive advantage, benchmark against industry standards and analysis of critical success factors and risks;
2. An investigation that is focused on the substance of the applied accounting treatments; how accurately do the organization’s financial statements reflect true business value;
3. Research of the business economics of the firm; uncovering actual operating and financial performance by assessing financial parameters and cash flows;
4. Prospective dissection allows for the synthesis of the insights from the analysis of strategy, accounting treatments and the assessment of the underlying financial status quo of the organization.

After the construction of the above-mentioned framework, Van Clamsfield International Ltd. renders an attestation on the value of an organization and constructs a meaningful forecast of the organization’s future performance. Business valuation analysis and forecast has proven to be useful in several business application contexts:

1. Mergers and acquisitions (pricing and financing);
2. Corporate governance;
3. Securities (investor objectives and effective approaches);
4. Credit (distress and turnaround);
5. Corporate communication strategy (management and investors);
6. Corporate restructuring;
7. Capital structure/debt/dividend policy (reaching the optimal long-term mix);
8. Fraud risk (the effectiveness of internal control systems);
9. Project investment valuation, required return, financing decision of new projects;
10. General business analysis (business plans).

Van Clamsfield International Ltd. comprehends management’s accounting and disclosure policies and therefore has the ability to extract inside information from public data in order to meet the information needs of investors, who wish to establish an organization’s incumbent and future performance.