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Regular version of the site
2020/2021

Financial Statement Analysis

Type: Mago-Lego
Delivered by: Department of Finance
When: 3 module
Language: English
ECTS credits: 3

Course Syllabus

Abstract

The course describes the analysis of financial statements. Financial statement analysis is the application of analytical tools 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 forecasting.
Learning Objectives

Learning Objectives

  • The goal of this course is to equip students with the skills needed to perform financial analysis and interpret financial statements properly.
Expected Learning Outcomes

Expected Learning Outcomes

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

Course Contents

  • Topic 1. Overview of Financial Statement Analysis
    Types and Components of Business Analysis. Financial Statements- Basis of Analysis. The Annual Report. Comparative Financial Statement Analysis. Ratio Analysis.
  • Topic 2. Financial Reporting and Analysis
    Financial Reporting Environment. Concept of Income. Fair Value Accounting. Earnings Management.
  • Topic 3. 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 4. Credit Analysis
    Liquidity and Working Capital. Additional Liquidity Measures. Importance of Capital Structure. Capital Structure Composition and Solvency. Earnings Coverage. Capital Structure Risk and Return.
  • Topic 5. Cash Flow Analysis
    Statement of Cash Flows. Reporting Cash Flows from Operations. Analysis Implications of Cash Flows. Specialized Cash Flow Ratios.
  • Topic 6. Prospective Analysis
    Prospective Analysis. The Projection Process. Short-term Forecasting.
Assessment Elements

Assessment Elements

  • non-blocking Midterm Test
    The midterm test will take the form of a 2-hour (80 min) open book test: individual, online. The test consists of 40 questions and tasks of the topics: 1,2,3.
  • non-blocking Final Test
    The final test will take the form of a 2-hour (80 min) open book test: individual, online. The test consists of 40 questions and tasks of the whole course content.
  • non-blocking Exam: Team Project
    In small groups, written report, with follow-up online presentation, open book
Interim Assessment

Interim Assessment

  • Interim assessment (3 module)
    0.4 * Exam: Team Project + 0.4 * Final Test + 0.2 * Midterm Test
Bibliography

Bibliography

Recommended Core Bibliography

  • Financial statement analysis, Subramanyam, K.R., 2014

Recommended Additional Bibliography

  • Cope, A. T., & Robinson, T. R. (2015). International Financial Statement Analysis (Vol. Third edition). Hoboken, New Jersey: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=946119