Course description

Financial Statement Analysis

Introduction

Financial statement analysis has proven to be useful in a wide range of business decisions. Equity analysts use it as a foundation for their projections of the earnings potential of a company.  Credit analysts use it as a tool to determine whether loans should be granted or extended.

The corporate annual report is the primary document in financial statement analysis.  We will examine where to find relevant information and what it indicates about the "health of the company". The course demonstrates how financial information can be used to evaluate a company's past performance and present circumstances as well as what might transpire in the future (forecasts).

Course content

  • The Financial Statement Analysis Process
  • The Corporate Annual Report
  • The Financial Statement Analysis Report
  • Some Important Financial Statement Analysis Issues
  • Understanding the Income Statement, the Balance Sheet and the Cash Flow Statement
  • Financial Reporting Quality Analysis
  • Adjusting and Reorganizing Financial Statements
  • Financial Statement Analysis of Past Performance
  • Simple Forecasting

Learning outcome knowledge

The objective of this course is to enable the students to comprehend and critically evaluate the financial information included in corporate annual reports and other sources. The students will learn financial statement analysis from the point of view of the primary and everyday users of financial statements: company managers, lenders and stock analysts.

Exam organisation

  • Written assignment: 30%
  • Written exam: 70%