Milestone map
Milestone map
3 milestones
Analyse the Three Core Statements of a Real Listed Company
2–3 weeks
Master the income statement, balance sheet, and cash flow statement for a real publicly listed company. Use an actual filed annual report (10-K in the US, Annual Report for UK companies). Understand how the three statements connect — net income flows from the income statement to retained earnings on the balance sheet and to operating cash flow on the cash flow statement.
Proof required
Submit: (a) the name of your chosen company and a link to the specific annual report used, and (b) a one-page summary for each of the three statements (three pages total) identifying the five most important line items from that company's actual statements — with the specific value for the most recent year and a two-sentence explanation of what each line item reveals about the company's financial health. Use actual dollar/pound values, not percentages.
What gets checked
- Real company and specific annual report year are identified — not a textbook example
- Line items are from the actual filed statements with actual values
- Three-statement connection is explained — where does net income appear on the other two statements for this specific company?
Common mistakes
- Using a simplified teaching tool instead of a real annual report — real statements have complexity that teaching examples hide
- Describing line items in general terms without using the specific values from the chosen company
Resources
What a verifier looks for
- Confirm the annual report is a real filing: check that the link goes to an actual SEC EDGAR or company investor relations page.
- Check the three-statement connection: can the submitter trace the exact net income figure from the income statement to the retained earnings movement and to operating cash flow?
Compute and Interpret Five Key Financial Ratios with Competitor Comparison
2–3 weeks
Using the same company's annual report, calculate five financial ratios: return on equity, net profit margin, current ratio, debt-to-equity, and asset turnover. For each ratio, compute the value from the actual statements, compare against a real named competitor, and interpret what the difference indicates.
Proof required
Submit: (a) a calculation worksheet showing the formula, specific line items used, and computed ratio for each of the five ratios, (b) a competitor comparison for each ratio (one named competitor's ratio with source), and (c) a 600-word analysis explaining what the five ratios together tell you about this company's financial strengths and risks compared to its competitor.
What gets checked
- Calculations show the formula and specific line items — not just the result
- Competitor comparison uses a real competitor's actual ratio with a source
- Analysis is specific to this company — generic ratio interpretation without reference to actual values does not satisfy this requirement
Common mistakes
- Using pre-computed ratios from a financial data site without showing the underlying calculation
- Analysis does not compare against anything — a ratio value is only meaningful in context
Resources
What a verifier looks for
- Ask the submitter to show their working for one ratio: 'Where exactly on the balance sheet did you find the line items for the current ratio?' This reveals whether they can actually read the statements.
- Review the analysis: does it use the specific computed values to make a specific point? 'The current ratio of 1.4 vs Competitor X's 2.1 suggests tighter near-term liquidity' is specific; 'adequate liquidity' is not.
Produce a Financial Health Summary and Defend to a Finance Professional
1–2 weeks
Produce a one-to-two-page financial health summary taking a clear position: given the statements and ratios, what is your overall assessment of the company's financial health and the one or two biggest risks visible in the statements? Present this to a finance professional (accountant, financial analyst, CFO, or equivalent) who will challenge at least two of your ratio interpretations.
Proof required
Submit: (a) the financial health summary (one to two pages maximum) stating your overall assessment and key risks, (b) an attendance record for the review session (reviewer name, credentials, date), and (c) a Q&A log (minimum 300 words) documenting at least two specific challenges from the reviewer and your responses.
What gets checked
- Summary takes a clear position — not neutral description of ratios but an assessment with a direction
- Q&A log shows real challenge to ratio interpretations — not just positive feedback
- Reviewer has relevant financial professional credentials
Common mistakes
- Financial health summary describes the ratios without taking a position
- Review session with someone who does not challenge the analysis
Resources
What a verifier looks for
- Your most valuable challenges probe interpretation: 'Your debt-to-equity is 2.1 — you called this a risk, but is that appropriate for this industry?' The submitter must be able to contextualise.
- Provide a written confirmation (minimum 150 words) of your credentials, the specific interpretations you challenged, and whether the submitter defended their analysis.