20221 - FINANCIAL STATEMENTS ANALYSIS (ADVANCED COURSE)
CLMG - M - IM - MM - AFC - CLAPI - CLEFIN-FINANCE - CLELI - ACME - DES-ESS - EMIT
Course taught in English
Go to class group/s: 31
The course major educational objective is the analysis of financial statement interpretation issues from the perspective of professional analysts in an international context.
Successful completion of this course enable students to use financial analysis formats and ratios in the perspective of: industry and competitor analysis perspective, credit analysis, equity analysis, (fraud) audit analysis.
Particular relevance is given to analysis and discussion of problems, incidents and case studies for real-world companies, in order to develop students' skills in identifying critical financial statement areas.
- Introduction to Financial Statements Analysis.
- Analysis of Income Statement: overall reformulation choices.
- (cont.) Unusual items.
- (cont.) Focus on operating income.
- Analysis of Balance Sheet: liquidity format and managerial format.
- (cont.) Managerial format.
- The ratio system: analysis of ROI (return on investment).
- The ratios system: analysis of ROE (return on equity).
- Analysis of the Cash Flow Statement: IAS 7.
- (cont.) Analysis of the Cash Flow Statement.
- (cont.) Empirical Research and Case Study.
- The influence of Accounting Principles (IFRS vs Local GAAP) on FSA.
- FSA for a listed group of companies: Case Study.
- FSA and financial forecasts in the perspective of credit and equity analysis; preparation and evaluation of the reasonableness of financial forecasts; sensitivity analysis; Case Study.
- Fraud Analysis: how to identify the "red flags" through FSA; Case Study.
A final written exam, identical for attending and not attending students. Written exam duration: 1.45 or 2.00 hours. Format of questions: multiple choice (answers: numbers or sentences); true/false, numerical exercises (ex. reformulation of cash flow statement, calculation of some ratios etc.). No: questions about case studies (discussed in classroom) and readings (they are optional). Teachers provide all the examples of exercises, multiple choice and true/false.
Available on the course website: slides (required), short readings (required), exercises and questions grouped by topic (required); supplemental readings (optional). For some topics (ex. cash flow statement preparation): basic materials (slide + exercises): students have to study these basic materials before lectures.
Basic financial accounting (book-keeping; accounting standards; basic financial statement analysis); Corporate Finance and Business Valuation.
Recommended: IFRS (International Financial Reporting Standards).