Equip the student 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.
Prerequisites
Solid grasp of financial accounting concepts and principles. Some notions of finance are also required
Teaching Methods
Lectures and tutorials
Type of Assessment
Individual test and term project
Course program
The Class is divided into three integrated parts:
1. Gathering and assessing information. Financial analysis requires an analyst to know what information he/she needs (in particular, financial information), where to look for that infor-mation, and how to assess its quality.
2. Adjusting financial information. Accounting data presented in the GAAP-based financial statements has to be reformulated to show business activities, i.e. how a company works, and creates value. The reengineering process deals with all the statements, the cash flow statement included. In a few cases, it is up to the analyst to prepare the cash flow statement, therefore the Class also shows how to prepare this statement starting from scratch.
3. Elaborating financial information. To delve into the economic contents of the reformulated financial statements, an analyst has to zero in on a company’s growth, profitability, liquidity, and long-term solvency. A set of ratios to measure these strands of a company's activity is presented.