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JOHN CABOT UNIVERSITY
COURSE CODE: "FIN/ACCT 311"
COURSE NAME: "Financial Statement Analysis"
SEMESTER & YEAR:
Spring 2024
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SYLLABUS
INSTRUCTOR:
Barbara Sveva Magnanelli
EMAIL: [email protected]
HOURS:
MW 10:00 AM 11:15 AM
TOTAL NO. OF CONTACT HOURS:
45
CREDITS:
3
PREREQUISITES:
Prerequisite: ACCT 201 with C or above
OFFICE HOURS:
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COURSE DESCRIPTION:
This course is designed to prepare students to interpret and analyze financial statements in order to be able to assess the performance of the company, take investment decisions, financing decisions and other decisions that rely on financial data. The course focuses on how to interpret numbers of the financial statements included in the annual report. The course focuses on the evaluation of the performance of the company, investigating its profitability, liquidity and solidity analysis, to check the economic and financial conditions of the company. The course also investigates the intrinsic equity value of the firm, comparing it to its book value. The aim of this course is to provide the students with a framework for analyzing the company’s performance, estimating also its future possible outcome, and valuing its equity. The course combines topics that vary from accounting, finance, and business strategy and applies them to financial decision making.
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SUMMARY OF COURSE CONTENT:
The course is delivered through a continuous mix of theory session and practical sessions. The course focuses on valuation tools used by practitioners as well as
academics and analysists.
The course will focus on three main topics. First, the performance analysis based on ratios will be conducted, in order to test the profitability and the financial equilibrium of the firm. To investigate the performance, tools such use the proper usage of the notes to the financial statement will be proposed. Then, the cash flow statement construction and analysis will be performed. This topic integrates the performance analysis and completes the investigation about the cash usage and generation of the company. Finally the course proposes the equity evaluation through methods that allow to capture the intrinsic value of a firm, such as the residual earnings model, which is used by financial analysts to take investments decisions, starting the evaluation from the financial statement numbers.
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LEARNING OUTCOMES:
The main objective of the financial statement analysis course is to provide the necessary information required by the financial statement users to be used in the decision making process or in the investment decisions, assessing the current and past performance of the company, as well as forecasting the success of the business in the future.
At the end of the course, the students should be able to provide reasonably
accurate comments and forecasts about the firm’s performance and firm’s equity value,
including profit, asset and liabilities balance and cash flows analysis.
Thus, by the end of the course students should be able to:
• Have a framework for analyzing a business performance
• Be familiar with the firm’s documents, balance sheet, income statement and cash flow statement
• Be proficient at calculating and interpreting financial ratios
• Understand major valuation models
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TEXTBOOK:
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REQUIRED RESERVED READING:
RECOMMENDED RESERVED READING:
| Book Title | Author | Publisher | ISBN number | Library Call Number | Comments |
| Financial Reporting, Financial Statement Analysis and Valuation | James M. Wahlen, Stephen P. Baginski, Mark Bradshaw | Cengage | 0357722094 | | |
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GRADING POLICY
-ASSESSMENT METHODS:
| Assignment | Guidelines | Weight |
| Midterm | | 30% |
| Group Project | | 25% |
| Final Exam | | 35% |
| Class Participation | | 10% |
-ASSESSMENT CRITERIA:
AWork of this quality directly addresses the question or problem raised and provides a coherent argument displaying an extensive knowledge of relevant information or content. This type of work demonstrates the ability to critically evaluate concepts and theory and has an element of novelty and originality. There is clear evidence of a significant amount of reading beyond that required for the course.
BThis is highly competent level of performance and directly addresses the question or problem raised.There is a demonstration of some ability to critically evaluatetheory and concepts and relate them to practice. Discussions reflect the student’s own arguments and are not simply a repetition of standard lecture andreference material. The work does not suffer from any major errors or omissions and provides evidence of reading beyond the required assignments.
CThis is an acceptable level of performance and provides answers that are clear but limited, reflecting the information offered in the lectures and reference readings.
DThis level of performances demonstrates that the student lacks a coherent grasp of the material.Important information is omitted and irrelevant points included.In effect, the student has barely done enough to persuade the instructor that s/he should not fail.
FThis work fails to show any knowledge or understanding of the issues raised in the question. Most of the material in the answer is irrelevant.
-ATTENDANCE REQUIREMENTS:
Attendance and active involvement in discussions and other class activities is essential. Major exams cannot be made up without the permission of the Dean's Office. The Dean's Office will grant such permission only when the absence was caused by a serious impediment, such as a documented illness, hospitalization or death in the immediate family or other situations of similar gravity. Absences due to other meaningful conflicts, such as job interviews, family celebrations, travel difficulties, student misunderstandings or personal convenience, will not be excused. Students who will be absent from a major exam must notify the Dean's Office prior to that exam. Absences from class due to the observance of a religious holiday will normally be excused. Individual students who will have to miss class to observe a religious holiday should notify the instructor by the end of the Add/Drop period to make prior arrangements for making up any work that will be missed.
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ACADEMIC HONESTY
As stated in the university catalog, any student who commits an act of academic
dishonesty will receive a failing grade on the work in which the dishonesty occurred.
In addition, acts of academic dishonesty, irrespective of the weight of the assignment,
may result in the student receiving a failing grade in the course. Instances of
academic dishonesty will be reported to the Dean of Academic Affairs. A student
who is reported twice for academic dishonesty is subject to summary dismissal from
the University. In such a case, the Academic Council will then make a recommendation
to the President, who will make the final decision.
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STUDENTS WITH LEARNING OR OTHER DISABILITIES
John Cabot University does not discriminate on the basis of disability or handicap.
Students with approved accommodations must inform their professors at the beginning
of the term. Please see the website for the complete policy.
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SCHEDULE
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Week 1
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Introduction To The Course
Review of the financial statements
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Week 2
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Reformulated Financial Statement – the Strategic Balance Sheet, the NOPAT
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Week 3
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The Profitability Analysis Part I (ROCE, RNOA, Profit Margin, Asset Turnover)
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Week 4
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The Profitability Analysis Part II(WCC Duration, Fixed Assets Turnover, NFO, NFA and Financial Leverage)
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Week 5
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The Profitability Analysis – Case Studies
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Week 6
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The Financial Equilibrium – Solidity and Liquidity analysis
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Week 7
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The Financial Equilibrium – Case Studies
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Week 8
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Cash flow Statement – Part I – Indirect Method
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Week 9
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Cash flow statement – Part II – Direct Method
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Week 10
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Cash flow statement – Case Studies and Discussion
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Week 11
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Cash flow statement – Case Studies and Discussion
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Week 12
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The Residual Earnings Model
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Week 13
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The Residual Earnings Model– Case Studies and Project work presentations
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Week 14
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Project Presentations and Review
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Week 15
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Final Exam
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