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Analysis of Financial Statements

2021/2022
Учебный год
ENG
Обучение ведется на английском языке
4
Кредиты
Статус:
Курс по выбору
Когда читается:
3-й курс, 3, 4 модуль

Course Syllabus

Abstract

The course describes the analysis of financial statements and company valuation. Financial statement analysis is the application of analytical tools, technology and techniques to general-purpose financial statements and related data to derive estimates and inferences useful in business analysis. Financial statement analysis comprise of accounting analysis, financial analysis and valuation. The goal of this course is to equip students with the skills needed to perform financial analysis and interpret financial statements properly.
Learning Objectives

Learning Objectives

  • This course is aiming to provide students the basic skills and techniques to analyze financial statements for the purpose of valuation. Students will learn how to evaluate financial statements and perform prospective and equity analyses. Students will acquire knowledge on how to recast and adjust financial statements to estimate of the intrinsic value of the firm.
Expected Learning Outcomes

Expected Learning Outcomes

  • Have an idea about the place and the role of financial analysis in the system of management of the economic entity.
  • Understand the essence of financial terms and to use them properly.
  • Have basic practical skills in financial statement analysis and interpreting financial information.
  • Demonstrate deep knowledge and critical understanding of theories, principles, concepts and methodologies in financial statement analysis.
  • Apply a set of diagnostics to assess the quality of the accounting in financial statements.
  • Evaluate the impact of financial reporting choices on the quality of accounting information including reported earnings.
  • Use strong analytical skills and apply them to solve practical problems.
  • Work effectively in a team environment.
Course Contents

Course Contents

  • Topic 1. Overview of Financial Statement Analysis
    Types of Business Analysis. Components of Business Analysis. Financial Statements- Basis of Analysis. The Annual Report. Comparative Financial Statement Analysis. Ratio Analysis. Cash Flow Analysis. Specialized Analysis Tools.
  • Topic 2. Financial Reporting and Analysis
    Financial Reporting Environment. Nature and Purpose of Financial Accounting. Concept of Income. Fair Value Accounting. Introduction to Accounting Analysis. Earnings Management.
  • Topic 3. Analyzing Financing Activities
    Liabilities. Leases. Postretirement benefits. Contingencies and Commitments. Off Balance Sheet Financing. Shareholders’ Equity. Liabilities at the “Edge” of Equity.
  • Topic 4. Analyzing Investing Activities
    Cash and Cash Equivalents. Receivables. Prepaid Expenses. Inventories. Introduction to Long-Lived Assets. Plant Assets and Natural Resources. Intangible Assets.
  • Topic 5. Analyzing Investing Activities: Intercorporate Investments
    Passive investments. Investments with Significant Influence. Business Combinations. Derivative Securities.
  • Topic 6. Analyzing Operating Activities
    Income Measurement. Non-recurring items. Revenue and Gain Recognition. Deferred Charges.
  • Topic 7. Cash Flow Analysis
    Statement of Cash Flows. Reporting Cash Flows from Operations. Analysis Implications of Cash Flows. Specialized Cash Flow Ratios.
  • Topic 8. Return on Invested Capital and Profitability Analysis
    Importance of Return on Invested Capital. Components of Return on Invested Capital. Analyzing Return on Net Operating Assets. Analyzing Return on Common Equity.
  • Topic 9. Prospective Analysis
    The Projection Process. Short-term Forecasting.
  • Topic 10. Credit Analysis
    Liquidity and Working Capital. Operating Activity Analysis of Liquidity. Additional Liquidity Measures. What If Analysis. Importance of Capital Structure. Capital Structure Composition and Solvency. Earnings Coverage. Capital Structure Risk and Return.
  • Topic 11. Equity Analysis and Valuation
    Earnings Persistence. Earnings Based Equity Valuation. Earning Power and Forecasting for Valuation.
Assessment Elements

Assessment Elements

  • non-blocking In-class activities
    Individual or in small groups, in-class and oline in LMS, open book
  • non-blocking Midterm test
    Individual, online in LMS, open book
  • non-blocking Team project
    In small groups, online in LMS, open book
  • non-blocking Final exam
    Individual, online in LMS, closed book
Interim Assessment

Interim Assessment

  • Interim assessment (4 module)
    0.5 * Final exam + 0.15 * In-class activities + 0.15 * Midterm test + 0.2 * Team project
Bibliography

Bibliography

Recommended Core Bibliography

  • Financial statement analysis, Subramanyam, K.R., 2014
  • Fridson, M. S., Alvarez, F., & FinancePro. (2011). Financial Statement Analysis : A Practitioner’s Guide (Vol. 4th ed). Hoboken, N.J.: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=517757

Recommended Additional Bibliography

  • Fridson, M. S., & Alvarez, F. (2011). Financial Statement Analysis Workbook : A Practitioner’s Guide (Vol. 4th ed). Hoboken N.J.: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=382138