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. To be able to interpret and evaluate the discussions on the theoretical aspects of International Banking and Finance.
2. To be able to identify regional and global problems that directly or indirectly affect financial issues, to develop solutions and strategies based on evidence and research.
3. To be able to define, evaluate and interpret the classical and current theories of international banking and finance policies and strategies, differences and relationships between them.
4. To have social, scientific and ethical values in the collection, interpretation, announcement and application of data in the field of international banking and finance and to assimilate these values.
5. To be able to follow, understand, interpret and analyze the changing trends in banking and financial activities in the world at an advanced level, and apply innovation and innovative working principles.
6. To be able to set goals and take initiatives to achieve them, to be creative and open to criticism and to have professional competencies at an advanced level.
7. To have an advanced level of foreign language to follow and use the information in the field and to communicate with colleagues.
8. To have advanced computer software and hardware knowledge required by the field of International Banking and Finance, and to be able to use information and communication technologies at an advanced level.
9. To be able to use theoretical and practical knowledge gained in the field of International Banking and Finance at an advanced level.
10. To be able to benefit from other fields that form the basis of financial policies and to understand the interaction between these disciplines.
11. To be able to examine the basic problems in the field of International Banking and Finance with scientific methods, to interpret and evaluate the data.
12. To be able to take responsibility individually and as a team member to solve complex problems encountered in practice related to International Banking and Finance, and to produce solutions.
13. To be able to critically evaluate the knowledge and skills acquired in the fields of International Banking and Finance, to determine learning needs and to carry the learning process to an advanced level.
14. To inform experts or non-experts on financial issues, to share their ideas and problems and solution methods by supporting them with quantitative and qualitative data.

Po-Lo Matrix