SAQA All qualifications and part qualifications registered on the National Qualifications Framework are public property. Thus the only payment that can be made for them is for service and reproduction. It is illegal to sell this material for profit. If the material is reproduced or quoted, the South African Qualifications Authority (SAQA) should be acknowledged as the source.
SOUTH AFRICAN QUALIFICATIONS AUTHORITY 
REGISTERED UNIT STANDARD: 

Evaluate companies based on their financial statements 
SAQA US ID UNIT STANDARD TITLE
12883  Evaluate companies based on their financial statements 
ORIGINATOR
SGB HET Accountancy and Financial Management 
PRIMARY OR DELEGATED QUALITY ASSURANCE FUNCTIONARY
FASSET - Financial and Accounting Services SETA 
FIELD SUBFIELD
Field 03 - Business, Commerce and Management Studies Finance, Economics and Accounting 
ABET BAND UNIT STANDARD TYPE PRE-2009 NQF LEVEL NQF LEVEL CREDITS
Undefined  Regular  Level 6  Level TBA: Pre-2009 was L6  15 
REGISTRATION STATUS REGISTRATION START DATE REGISTRATION END DATE SAQA DECISION NUMBER
Reregistered  2018-07-01  2023-06-30  SAQA 06120/18 
LAST DATE FOR ENROLMENT LAST DATE FOR ACHIEVEMENT
2024-06-30   2027-06-30  

In all of the tables in this document, both the pre-2009 NQF Level and the NQF Level is shown. In the text (purpose statements, qualification rules, etc), any references to NQF Levels are to the pre-2009 levels unless specifically stated otherwise.  

This unit standard does not replace any other unit standard and is not replaced by any other unit standard. 

PURPOSE OF THE UNIT STANDARD 
This unit standard is intended for people working in, or who wish to work in, the Financial Markets sector.

Persons credited with this Unit Standard can identify the four basic financial statements (balance sheet, income statement, cash flow statement and statement of owner's equity) and are able to evaluate the liquidity, efficiency, profitability and risk of the company using standard financial ratio analysis. 

LEARNING ASSUMED TO BE IN PLACE AND RECOGNITION OF PRIOR LEARNING 
It is assumed that the learner is competent in Communication and Mathematical Literacy at NQF level. 

UNIT STANDARD RANGE 
"The four basic Financial statements" include:
  • The balance sheet
  • The income statements
  • Statement of capital structure
  • Cash generation statement

    "Financial Ratios" include:
  • Liquidity ratios such as the current ratio, the quick ratio and interest cover
  • Leverage ratios such as the debt to capital employed and total liabilities to total assets
  • Profitability ratios such as sales growth, gross profit margin, gross profit to sales, operating profit to sales, net profit margin, selling and admin expenses to sales, return on assets and return on capital employed
  • Efficiency ratios such as number of debtors days, creditors days, inventory days, inventory turnover to cost of sales, fixed asset turnover, cash conversion days
  • Shareholder information such as earnings per share, dividends per share, price earnings ratio, earnings yield, dividend yield, dividend cover 

  • Specific Outcomes and Assessment Criteria: 

    SPECIFIC OUTCOME 1 
    Construct the four basic financial statements 

    ASSESSMENT CRITERIA
     

    ASSESSMENT CRITERION 1 
    1. A conceptual framework for financial statements is reviewed and an explanation is given of the different components of the framework and the purpose and relative value of each. 

    ASSESSMENT CRITERION 2 
    2. Information for reporting purposes (financial accounting) is differentiated from information for decision purposes (management accounting). 

    ASSESSMENT CRITERION 3 
    3. Financial items and categories are allocated to the correct statement for a set of accounts. 

    ASSESSMENT CRITERION 4 
    4. The relationship between items on the different statements is made apparent with examples. 

    ASSESSMENT CRITERION 5 
    5. The principles of GAAP (Generally Accepted Accounting Practice) relating to the financial statements are applied for a set of accounts. 

    SPECIFIC OUTCOME 2 
    Identify factors affecting the sustainability of economic entities 

    ASSESSMENT CRITERIA
     

    ASSESSMENT CRITERION 1 
    1. Revenue stream generation activities of a firm are identified using financial statements. 

    ASSESSMENT CRITERION 2 
    2. The characteristics of financial success are identified with examples. 

    ASSESSMENT CRITERION 3 
    3. The role of various financial ratios in determining the firm's financial viability is discussed in relation to two companies. 

    SPECIFIC OUTCOME 3 
    Analyse the firm to establish its financial viability 

    ASSESSMENT CRITERIA
     

    ASSESSMENT CRITERION 1 
    1. The financial viability of the firm is evaluated using the four basic financial statements and ratios. 

    ASSESSMENT CRITERION 2 
    2. The financial state of affairs of the firm is compared meaningfully to industry benchmarks or norms. 

    ASSESSMENT CRITERION 3 
    3. The financial consequences of various managerial decisions are predicted for two companies using financial statement analysis, and alternative recommendations are made when necessary to prevent financial failure. 

    SPECIFIC OUTCOME 4 
    Report on the financial viability of the firm 

    ASSESSMENT CRITERIA
     

    ASSESSMENT CRITERION 1 
    1. The report is constructed using the firm's best practice requirement or template. 

    ASSESSMENT CRITERION 2 
    2. The analysis findings are provided in writing using graphical information and an oral presentation is made of the main points. 

    ASSESSMENT CRITERION 3 
    3. Recommendations are made regarding investment in the firm. 


    UNIT STANDARD ACCREDITATION AND MODERATION OPTIONS 
    Accreditation and moderation:

    Accreditation for this Unit Standards shall be from the FASSET Education and Training Quality Assuror through formative and summative assessment by a registered Assessor. Assessment should be contextual and be conducted in the workplace as far as possible.
  • Assessors must be registered as an Assessor with the FASSET ETQA or with an ETQA that has a Memorandum of Understanding with the FASSET ETQA
  • Moderators must be registered as assessors with the FASSET ETQA or with an ETQA that has a Memorandum of Understanding with the FASSET ETQA
  • Training providers must be accredited by the Fasset ETQA or with an ETQA that has a Memorandum of Understanding with the FASSET ETQA
  • Moderation should include both internal and external moderation where applicable
  • The Fasset ETQA will co-ordinate all moderation activities in accordance with its policies and procedures 

  • UNIT STANDARD ESSENTIAL EMBEDDED KNOWLEDGE 
    A demonstrated understanding of:

    The terminology relating to the Financial Markets and instruments. 


    Critical Cross-field Outcomes (CCFO): 

    UNIT STANDARD CCFO COLLECTING 
    Collect, analyse, organise and critically evaluate information. For example, a great deal of information about an organisation's profitability, viability, and management effectiveness can be gathered through critically analysing information available in their financial statements, and conclusions based on such analysis can be of value to investors. 

    UNIT STANDARD CCFO COMMUNICATING 
    Communicate effectively using visual, mathematical and / or language skills in the modes of oral and / or written persuasion. For example, mathematical skills are essential in the analysis of figures. 

    UNIT STANDARD CCFO SCIENCE 
    Use science and technology effectively and critically, showing responsibility towards the environment and health of others. For example, calculations can be performed with greater ease and rapidity using computer technology. 

    UNIT STANDARD CCFO DEMONSTRATING 
    Demonstrate an understanding of the world as a set of interrelated systems by recognizing that problem-solving contexts do not exist in isolation. For example, the various ratios and calculations performed during financial analysis can be related meaningfully to one another to draw relevant business conclusions about the organisation. 

    REREGISTRATION HISTORY 
    As per the SAQA Board decision/s at that time, this unit standard was Reregistered in 2012; 2015. 

    UNIT STANDARD NOTES 
    Terminology:

    Terminology relating to the Financial Markets can be found in "Who owns Whom's Dictionary of Stock Market Terms" published by Who owns Whom/PSG Online in 2001. ISBN 1-919850-04-X.

    Values:

    The use of tasks and materials in the learning event plan should not discriminate against learners on any grounds proscribed in the Bill of Rights and should promote the orientations outlined in the critical cross-field outcomes. 

    QUALIFICATIONS UTILISING THIS UNIT STANDARD: 
      ID QUALIFICATION TITLE PRE-2009 NQF LEVEL NQF LEVEL STATUS END DATE PRIMARY OR DELEGATED QA FUNCTIONARY
    Core  50481   National Certificate: Financial Markets and Instruments  Level 6  Level TBA: Pre-2009 was L6  Reregistered  2023-06-30  BANKSETA 
    Fundamental  23653   National Diploma: Financial Markets  Level 6  NQF Level 06  Reregistered  2023-06-30  FASSET 


    PROVIDERS CURRENTLY ACCREDITED TO OFFER THIS UNIT STANDARD: 
    This information shows the current accreditations (i.e. those not past their accreditation end dates), and is the most complete record available to SAQA as of today. Some Primary or Delegated Quality Assurance Functionaries have a lag in their recording systems for provider accreditation, in turn leading to a lag in notifying SAQA of all the providers that they have accredited to offer qualifications and unit standards, as well as any extensions to accreditation end dates. The relevant Primary or Delegated Quality Assurance Functionary should be notified if a record appears to be missing from here.
     
    1. AAR Trading and Projects (Pty) Ltd 
    2. Absa Learning & Development 
    3. Chartall Business College 
    4. Felix Risk Training Consultants 
    5. Full Value Financial Services (Pty) Ltd 
    6. Fungi Business Consulting (Pty) Ltd 
    7. Injabulo Home Grown Learning and Development Solutions 
    8. Jewel Training Solutions 
    9. K2020192300 (South Africa) (Pty) Ltd 
    10. Korbicom (Pty) Ltd 
    11. LFS Learning Solutions (Pty) Ltd 
    12. Maharishi Invincibility Institute NPC 
    13. MAT 007 (PTY) LTD 
    14. Ndiwatendi General Enterprise (PTY) Ltd 
    15. Nedbank Ltd 
    16. Octopus Training Solutions 
    17. Riaphathutshedza (PTY) LTD 
    18. The Academy of Financial Markets 
    19. The Facilitation Workshop 
    20. The Institute of Literacy Advancement 
    21. UCS Education and Training Services (Pty) Ltd 
    22. Welltec Academy (Pty) LTD 



    All qualifications and part qualifications registered on the National Qualifications Framework are public property. Thus the only payment that can be made for them is for service and reproduction. It is illegal to sell this material for profit. If the material is reproduced or quoted, the South African Qualifications Authority (SAQA) should be acknowledged as the source.