Into the Boardroom
Decoding company accounts
It's not just senior executives who need to know how well their organisation is doing; everyone would benefit from a deeper understanding of what a company’s stock market performance actually means. This two-part programme uses a realistic drama to explain a subject that many people grapple with.
Video 1: Profits of doom — Executive Andrew King discovers what the financial accounts are really saying when he is offered the chair of Mega. As his son Peter examines the data, the truth behind Mega's apparently exceptional performance is revealed. When Peter explains concepts such as hedging and gearing, it is clear that Mega has deep-seated problems.
Video 2: What’s good for the shareholder —Andrew then investigates Cosmic Corporation, deciding to take the chair. Peter agrees the company is sound, but examines how Cosmic uses its assets, and compares 'like with like’ – equalising different ages and financing methods to gain a true picture. Peter also explains shareholder value: Cosmic’s shares must earn more than a risk-free investment. After this incisive analysis of what shareholders look for, Andrew changes his mind…
This revealing programme will guide people in how to: compare returns against real asset values; look at potential, not just past growth; judge profits against those of similar companies; recognise that rising share price may not mean rising shareholder value; and understand that 'opportunity cost' will add shareholder value.
The key outcomes:
- Learn how to look beyond profits and see true state of a company’s performance
- Be a better judge of a company’s riskiness
- Increase understanding of topics such as hedging and gearing
Learning Chapters:
Part 1:
- Is your firm as good as you think?
- The point of no returns
- What is PE ratio?
- Profits
- Re-cap
- Gearing, ratios and hedging
- Summary 1
Part 2:
- Profits over performance
- Share price reflects future expectations
- Shareholder value
- Opportunity costs
- The beta
- Summary 2
Style: Humorous Drama


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