Insegnamento mutuato da: B019215 - FINANCIAL STATEMENT ANALYSIS Laurea Magistrale in FINANCE AND RISK MANAGEMENT - FINANZA E GESTIONE DEL RISCHIO
Lingua Insegnamento
english
Contenuto del corso
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 Valua‐ tion, 4th edition, Cambridge Business Publishers, 2015
• S.H. Penman, Financial Statement Analysis and Securities Valuation, McGraw Hill International Edi‐ tion, 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 select‐ ed 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 recom‐ mended handbooks.
A good handbook to have a look at to know something more about financial ratios is:
• Bragg S.B., Business Ratios and Formulas. A Comprehensive Guide, J. Wiley and sons Inc., 2002 (downloadable from class’ website)
In the detailed description of class meetings (see section 10), the chapter of the handbook that, in my opinion, fits best the topic of each meeting is shown. Additional readings are also suggested.
More information and didactic materials can be found on the class website: www.fiancialstatementanalysis.eu. On the website, you will find the assignments for the tutorials. Please, log in to the website as soon as possible to receive a weekly newsletter in order to be informed on class activities.
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 re‐ source allocation. Such skills are required for equity and credit ana‐ lysts, 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 didactic activity is based on lectures and practicum.Theoretical 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 designed to give students a practical application of a previously studied theory; so, we will review the framework and apply analytical tools to conduct an extensive fundamental analysis of real companies using their current financial statements. Tutorials will take up approximately one third of our course.
A mix of lectures, cases, and discussions provides an interactive learning environment, allowing you to achieve a better understanding of the economic meaning of the financial statements proceedings.
Altre Informazioni
More information and other didactic material can be found on the class website: www.financialstatementanalysis.eu
Please, login to the website as soon as possible to receive a weekly newsletter and be in-formed of all the class activities.
Modalità di verifica apprendimento
For students who take part in the class meetings
For students who will take part in class meetings on a regular basis (and only for them), the course grade will take into account your performance in three different activities, in this proportion:
• Exam 60%
• Term Project 40%
• Class participation: extra credit
In any case, to pass your exam you will at least have to get a passing grade in your final exam and team project. The grade for class participation will only work in your favor: if you actively attend class meetings, you will earn up to three points that could be added to your exam and team project average grade.
Exam
The final exam is a written test. You will have two hours to carry out your work.
Students are requested to do three exercises. 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 com‐ pany’s profitability and solvency conditions. After calculating some ratios that are considered the most fitting, you have to comment on the accounting results.
To prepare their report, students are allowed using a spreadsheet and a Word file. For this reason, the test will be held in building D15.
For students who do not take part in at least 80% of lectures and tutorials, the final exam is a written test, which lasts 3 hours. They are not requested to prepare a term project.
In the written test, students analyze the financial statements of a real company. They have to work out a narra‐ tive report structured in four sections:
• analysis of the business background of the company
• comment on the financial statements’ quality
• analysis of profitability
• analysis of solvency
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.
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.
To prepare their report, students are allowed using a spreadsheet and a Word file. For this reason, the test will be held in building D15.
Programma del corso
Detailed information about the course's program is available in the full syllabus. Download it from the course's website www.financialstatementanalysis.eu (course files)