FINANCIAL STATEMENT ANALYSIS

Course Description

This course is organized to help students to analyze and interpret the financial statements. Students will use the financial statements to decide the capital structure and solvency, profitability and liquidity positions of companies. This course will also teach students comparative analysis, vertical analysis, trend analysis, and ratio analysis to perform the analysis of financial statements. On successful completion of this course, all students will have developed knowledge and understanding of: Measuring and Estimating Costs, Accrual-based Versus Cash-flow-based Performance Measures, Cost of Capital, Credit Analysis, Growth Analysis, Decision Making, vertical analysis, trend analysis, and ratio analysis to perform the analysis of financial statements and Valuation and Accounting Quality.

FINANCIAL STATEMENT ANALYSIS

Evaluation Tools (Active Term)

No evaluation items have been defined.

Course outcomes

1. 01 primary financial statements
2. 02 profitability analysis,
3. 03 growth analysis
4. 04 liquidity risk analysis
5. 05 decision making.
6. 06 Valuation
7. 07 Cost of Capital
8. 08 Credit Analysis
9. 09 Profitability Analysis

Course Syllabus

Reference Books & Course Materials

1. 01 Subramanyam: Financial Statement Analysis, 11th Ed. International Edition, McGraw Hill
2. 02 Plenborg, T and Petersen, C, 2011. Financial Statement Analysis: Valuation - Credit Analysis - Executive Compensation, Pearson Publishing.

Learning Outcomes

1. L01 Explain business analysis and its relation to financial statement analysis. SOLO 3
2. L02 Apply several basic financial statement analysis techniques SOLO 5
3. L03 Describe the relevance of accounting information to business analysis and valuation, and identify its limitations. SOLO 2
4. L04 Analyze and interpret the financial statement as a preview to more detailed analyses. SOLO 4
5. L05 Explain cash management and its implications for analysis. SOLO 3
6. L06 Describe and analyze intangible assets and their disclosures SOLO 2
7. L07 interpret consolidated financial statements. SOLO 5
8. L08 Analyze financial reporting for intercorporate investments SOLO 4
9. L09 Explain the consolidation of foreign subsidiaries and foreign currency translation SOLO 3
10. L10 Analyze revenue and expense recognition and its risks for financial statement analysis. SOLO 4
11. L11 Describe and interpret interest costs and the accounting for income taxes SOLO 2
12. L12 Explain the relevance of cash flow in analyzing business activities. SOLO 3
13. L13 Describe the preparation and analysis of the statement of cash flows. SOLO 2
14. L14 interpret cash flows from operating activities SOLO 5
15. L15 analyze return on common shareholder's equity and its role in the analysis SOLO 4
16. L16 Explain the return on invested capital and variations in its computation SOLO 3
17. L17 Analyze return on net operating assets and its relevance for analysis. SOLO 4
18. L18 Explain operating and financial leverage SOLO 3
19. L19 Describe the importance of prospective analysis. SOLO 2
20. L20 Explain the process of projecting the income statement, the balance sheet, and the statement of cash flows. SOLO 3

Program Outcomes

1. P01 PO1 Become competent in searching and comprehending the relevant academic articles, interpreting the information learnt or obtained via various channels and absorbing exceptional knowledge in their field.
2. P02 PO2 Devoted themselves to be a qualified researcher and knowledge worker in their field all throughout their life and career.
3. P03 PO3 Demonstrated that they developed their individual capabilities through written projects, assignments and presentations that they will independently implement both in academia and work contexts.
4. P04 PO4 Gained key practical skills and knowledge which need to be implemented in their own research and business work environment.
5. P05 PO5 Been able to implement critical and analytical thinking and analyses into their studies, research and work.
6. P06 PO6 Become proficient in adopting the gained knowledge into practice and research in a critical, and analytical way.
7. P07 PO7 Become experts in using information technology tools for their studies, research and workplace in an ethical and safely environment by sharing and transferring their knowledge.
8. P08 PO8 Succeeded in working, researching and forming partnerships with their colleagues/team members in a global environment.
9. P09 PO9 Proved themselves capable of disseminating and sharing knowledge, sustainingly communicating with others, in any global workplace or research setting.
10. P10 PO10 Become capable of interpreting and transferring their qualified knowledge into practice and research.
11. P11 PO11 Dedicated themselves to applying advanced academic studies and enrolled themselves in work or non-work projects related to environmental approaches and ethical issues.

Po-Lo Matrix