Financial Analysis

The financial analysis course starts with a presentation of basic financial statements and prescribed chart of accounts for microfinance institutions and the government. The heart of the course is the method for adjusting financial statements to account for subsidies, donations, inflation and adequate loan loss provisioning. Recognizing these adjustments to the financial statement reveals the true financial performance of an MFI. International, local and best practice financial standards are used to determine the quality of the financial performance. These include the PEARLS Monitoring System, COOP-PESOS, EAGLE, Microfinance Standards to all Types of Philippine MFIs, and CAMELS Rating System. Different areas for financial analysis will also be tackled, including efficiency, portfolio quality, profitability and financial structure. Finally, the course also discusses measures of effectiveness that determine an MFI’s success in achieving its social mission.