The Cash Flow Statement represents the pivotal concept of our class: our focus will be on how to prepare it and interpret its contents.
Other related topics are:
• Accounting data quality and earnings management
• Balance sheet statement and income statement “reengineering”
• Profitability analysis
• Solvency analysis
The main topics the class deals with are analyzed in very good international handbooks. These books are particularly fitting:
• P. M. Bergevin, Financial Statement Analysis: An Integrated Approach, Upper Saddle River (N.J.), Prentice Hall, 2002
• P. Easton ‐ M.L. McAnally ‐ G. Sommers ‐ Xiao‐Jun Zhang, Financial Statement Analysis and Valuation, 4th edition, Cambridge Business Publishers, 2015
• S.H. Penman, Financial Statement Analysis and Securities Valuation, McGraw Hill International Edition, 2010
• C.P. Stickney – P. R. Brown – J. M. Wahlen, Financial Reporting, Financial Statement Analysis, and Valuation, Thomson South‐Western, 2007
• R. Subramanyam – J. J. Wild, Financial Statement Analysis, McGraw Hill‐Irwin, 2009
• G. I. White – A. C. Sondhi – D. Fried, The Analysis and Use of Financial Statements, John Wiley, 2003
Students are free to choose the source to draw from. Once your choice is made, only a few selected chapters should be studied. The chapters of each book that are the most related to the class contents are:
• Bergevin, 1‐6, 8‐14
• Easton et al., 1‐4, Appendix B
• Penman, 3, 7‐11, 15, 17‐19
• Stickney et al., 1, 3‐6
• White et al., 2‐4, 17‐18
• Subramanyam et al., chapters: 1, 2, 6‐8, 10
A student is also free to shape his/her personal handouts, by gathering chapters selected from the recommended handbooks.
More information and didactic materials can be found on the class website: www.fiancialstatementanalysis.eu.
Obiettivi Formativi
This course would like to equip you with the knowledge to read, interpret and analyze financial statement data in order to make informed business decisions regarding investment, credit, or resource allocation. Such skills are required for equity and credit analysts, executives, bankers, auditors, consultants and other users of financial information.
Prerequisiti
The course assumes you have a solid grasp of financial accounting concepts and principles. You should also have some notions in finance.
Metodi Didattici
The course is based on lectures and tutorials. Lectures will systematically treat concepts and analytical tools you are requested to use. Coherently with an international master class approach, lectures aim at offering you a conceptual framework to manage the different phases of your analysis and draw your attention to some significant issues. Each tutorial is conceived to give students a practical application of previously studied theoretical notions; thus, we will apply analytical tools to conduct an extensive analysis of a real company, by using its current financial statements. We will spend a third of our class time working on tutorials. You are encouraged to prepare for tutorials in teams. Team discussions will enable each of you to better understand assignments, readings, and lectures.
A mix of theoretical lectures, tutorials, and discussions provides an interactive learning environment, allowing you to achieve a better understanding of the economic meaning of the financial statement contents. More information about didactic materials can be found on the course website www.financialstatementanalysis.eu
Altre Informazioni
More information and other didactic material can be found on the class website: www.financialstatementanalysis.eu
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Modalità di verifica apprendimento
At the end of our class, your preparation will be assessed by means of an individual test. Students are also encouraged to write a financial analysis report. In this case, the course grade will take into account both students’ results, in this proportion:
• Individual test 60%
• report 40%
In any case, to pass your exam you must get a passing grade in your individual test and report.
For students who will take part in class meetings on a regular basis (and only for them), the course grade will also factor in class participation. The grade for class participation only works in your favor: if you actively attend class meetings, you could earn up to three points to add to your individual test and report average grade.
The individual test is a written test.
If you have prepared a financial analysis report, you are requested to do three intertwined exercises, working on some financial statements that you will be given. One exercise focuses on the financial statement reengineering; one deals with a cash flow statement preparation; the last exercise is a brief ratio analysis concerning a company’s profitability and solvency conditions. After calculating some ratios that are considered the most fitting, you have to comment on the accounting results. You will have two hours to carry out your work.
For students who do not present a financial analysis report, the final exam consists of an analysis of a listed company’s financial statements. Students have to work out a report where they present a comment structured in four sections:
1. analysis of the business background of the company
2. comment on the financial statements’ quality
3. analysis of profitability
4. analysis of solvency
All the statements in the report have to be justified and supported with the analysis of specific accounting data. Analyzing solvency, students are requested to present a “reengineered” cash flow statement. The test lasts 3 hours. To prepare the business background analysis, a week before the exam, students will be informed, by e-mail, on the branch of industry which the company to be analyzed works in.
More information about Exam and grading can be found on the class website: www.financialstatementanalysis.eu
Programma del corso
Detailed information about the program is available on the course website www.financialstatementanalysis.eu