Professional Documents
Culture Documents
COURSE BASICS
Credit Hours
Lecture(s)
Recitation/Lab (per week)
Tutorial (per week)
3
Nbr of Lec(s) Per Week
Nbr of Lec(s) Per Week
Nbr of Lec(s) Per Week
Duration
Duration
Duration
COURSE DISTRIBUTION
Core
Elective
Open for Student Category
Close for Student Category
COURSE DESCRIPTION
Whether you watch analysts on CNBC or read articles in The Wall Street Journal, you'll hear experts insisting on the importance of
"doing your homework" before investing in a company. In other words, investors should dig deep into the company's financial
statements and analyze everything from the auditor's report to the footnotes. But what does this advice really mean, and how
does an investor follow it? This course is to answer these questions by providing a succinct yet advanced overview of financial
statements analysis. If you already have a grasp of the definition of the balance sheet and the structure of an income statement,
this course will give you a deeper understanding of how to analyze these reports and how to identify the "red flags" and "gold
nuggets" of a company. In other words, it will teach you the important factors that make or break an investment decision.
COURSE PREREQUISITE(S)
1.
COURSE OBJECTIVES
1.
2.
3.
Strengthen students understanding of the accounting principles, methods and disclosures underlying financial
statements.
Examine the impact that the choice of accounting methods and management estimates have on financial
statements.
Consider how reported financial statement information can be adjusted to create more useful input for financial
analysis
LEARNING OUTCOMES
Identify and apply tools and techniques for the appropriate analysis of financial statements.
Analyze the information contained in the financial statements and all additional notes and reports which form part
of the financial report of an organization.
Analyze the effects of financial reporting choices on financial statement and ratios.
Analyze and interpret financial statement and accompanying disclosures and to evaluate financial reporting quality.
Write an effective report that analyses and provides justification for decision making.
Discuss and debate a variety of topics including the ethical and global perspectives in application of financial
reporting standard and choices and analyze the effects respectively
Indicate below how the course learning objectives/outcomes specifically relate to any program learning goals and objectives.
15%
5%
5%
25%
20% (10 % report + 10% presentation)
30%
Project: The financial statement analysis project is aimed at developing students understanding of and practical skills in financial
statement analysis and valuation. It is also designed to enhance teamwork, analytical and communication skills. To complete this
project, you are required to form teams of either 3 or 4 members. Each team must select a different industry and obtain approval
from the lecturer. Each team member must select a company within the approved industry and analyze the companys financial
reports using the FSA tools identified in the course. The group must also complete an industry comparative analysis of the 2
companies. Written reports must be submitted. Additionally, each group is required to formally present the findings of the
individual and group analyses to the class.
An overall group mark will be awarded to each student but the lecturers reserve the right to provide a reduced mark where a
student has provided a sub-standard individual company analysis. Further details on the nature and requirements of the project will
be discussed early in the course.
EXAMINATION DETAIL
Midterm
Exam
Yes/No:
Combine Separate:
Duration:
Preferred Date:
Exam Specifications:
Yes
Combined
1 Hour and 40 Minutes
During last week of examinations
Closed Books & Closed Notes
Final Exam
Yes/No:
Combine Separate:
Duration:
Exam Specifications:
Yes
Combined
1 Hour and 40 Minutes
Closed Books & Closed Notes
COURSE OVERVIEW
SESSION
4-6
TOPICS
RECOMMENDED
READINGS
SESSION OBJECTIVES
Analysis of Inventories {
Impact of change in prices;
Alternative
methods
of
computing cost; Adjustments
from LIFO to FIFO; Financial
ratio effect; Reporting and
measurement
issues;
Empirical
perspectives;
Market reactions to method
changes; Is a change to LIFO
good news or bad news?}
Case: Inventory Analysis of
Nucor
The Capitalization Decision {
Acquiring the asset: The
capitalization
decision;
Capitalization of interest
costs;
Intangible
assets
Analysis of Long Lived Assets}
Case: Software Capitalization
at IBM
Analysis of Depreciation and
Impairment
{Depreciation
Methods: analysis of fixed
asset disclosures; Impairment
of long lived assets; Liabilities
for
asset
retirement
obligations}
11-12
13-15
Analysis
of
Financing
Liabilities { Long term debt;
debt with equity features;
effects of changes in interest
rate; }
8-9
10
16
17
18-19
20-22
Interoperate
Investments
{Investment in securities;
Analysis
of
marketable
securities; Equity method of
accounting;
Consolidations
and comparison}
23-24
Analysis of
Operations
25
26-27
28
Multinational
A Synthesis
Students Presentations
N/A
N/A
TEXTBOOK(S)/SUPPLEMENTARY READINGS