Post-Graduate Diploma in Management

(PGDM)

Area: Finance
Course Title Financial Reporting and Analysis

Course Faculty:
Name:
Contact:
Email:
Office:
Student Meeting Hours:

Course Description:
The course focuses on basic techniques of Financial Accounting. It has been designed to enable
the students to prepare, comprehend and analyze corporate financial statements. The course is
designed to provide an understanding of the role and relevance of accounting function in an
organization and also the basic concepts, techniques and methodologies relevant to accounting
function. Course coverage includes: Preparation, understanding of financial statements including
Cash Flow statements of Corporate Organizations, Accounting of Property Plant and Equipment,
and Analysis of Published Annual Reports with respect to various financial ratios. Current
Developments like New Schedule VI has been incorporated in the course structure.

Learning Objectives:
This course endeavors to develop students with the following specific learning objectives
1. To develop an understanding of the nature of accounting and its role in business
decision-making.
2. To prepare, comprehend and analyze financial statements demonstrating both
technical and analytical capabilities (sub goal 1.1).
3. To develop a working knowledge of using Annual Reports.
4. To be able to apply accounting tools and techniques for better decision
making.

Pedagogy:
The course shall be delivered essentially through a fusion of lectures, exercises, and by
discussing real life financial statements to develop students ability to read and analyze them.
Total 20 sessions of 1 hr 15 minutes each would be conducted Students are encouraged to
interact with the faculty during the entire duration of course delivery and particularly during
analyzing situations.

Course Requirements:
i.

Since much of the course material requires class discussion, it is important that you are
prepared for the class and present and defend your ideas. Preparation for class includes
having read the assigned material.

ii.

The class will be divided into a number of groups. For all group assignments, each group
will submit its recommendations/solutions meeting the deadlines specified by the faculty.
Late submissions will not be accepted.

iii.

Class participation will be based on the value you add to the class through your
questions, statement, and comments. It is the quality of these that is more important than
the quantity.

iv.

This course involves lots of numbers. Students are advised to bring to the class a
calculator.

v.

Mobile phones shall strictly be switched off before the start of each session. Silent mode
is not permissible to ensure focused learning. Laptops/tablets can be used by the students
in the classroom only upon the instruction of the faculty.

Evaluation
Quiz
Class Participation
Project
End Term
Specific
Method
Quiz

:
:
:
:

Assessment

Class Participation
Project / Cases
Assignments

End
Term
Examination

20%
10%
20%
50%
Intended objectives to be assessed
1
2 (1.1) 3
4

Group Project
The group project will be an important learning tool of the course. It is essentially an application
of the classroom learnings. The project shall be assigned by the faculty at the end of session 16.
The project, while not being highly complicated, will require some deep thinking by the students
before forming a conclusion.

Assignments
i.
ii.

Short Case Report: A short case report may need to be submitted.

Additional assignments may be given during the course.

Recommended Text Book

3

Financial Accounting A Managerial Perspective, 5e, R Narayanaswamy, PHI

Reference Books
1. Financial Accounting Reporting and Analysis, 7e, E K Stice & J D Stice, Thomson South-Western.
2. Accounting Text and Cases, 12e, Robert N. Anthony, David F. Hawkins and Kenneth A. Merchant,
Tata McGraw Hill.
3. Essentials of Financial Accounting, 2e, Asish K. Bhattacharya, PHI
4. Financial Accounting, Weygandt, Kieso, Kimmel, Wiley
5. Introduction to Financial Accounting, 9e, C.T. Horngren, G. L. Sundem, J.A. Elliott, and D. Philbrick,
Pearson Prentice Hall.
6. Financial Reporting and Management Accounting, William J Bruns Jr., Thomson South-Western.

Journals

The Chartered Accountant

Management Accountant
Finance India
Journal of Accounting and Finance

Relevant Websites

www . icai.org : ICAI

www . my icwai.com :ICWAI
www. Icsi .edu : ICSI
www.mca.gov.in
www.clb.nic.in
www.fasb.org
www.iasb.org

Course Outline: Session/Module/Reading Material

Sessions 1 - 2: Introduction to Accounting: Accounting defined, Accounting principles, Concepts and
conventions, Importance of financial accounting and its economic implications from different
stakeholders perspective, Basic accounting terminologies, Types of accounts, Accounting process through
double entry system of book keeping. Recording financial transactions: introduction to journal and ledger
entry rules, Practice exercise.
Sessions 1 & 2 (150 minutes)
20 minutes
Definition of
Accounting.

20 minutes
Accounting
principles,
Concepts
and
conventions,
GAAP,

10 minutes
Importance of
financial
accounting
and
its
economic
implications
from different
stakeholders
perspective

30 minutes
Basic
accounting
terminologies,
Types
of
accounts.

20 minutes
Accounting
process
through
double entry
system
of
book keeping

20 minutes
Recording
financial
transactions:
introduction
to journal and
ledger entry
rules

30 minutes
Indian
accounting
standards
Concluding
the
class
discussion
(5/10
minutes)

Readings:
Financial Accounting: A Managerial Perspective, R. Narayanaswamy, PHI, 5/e. Chapters 1 and 2.

Sessions 3-7:

Preparation of Financial Statements: Statement of Profit and Loss with and

without adjustments. Preparation of Balance Sheet, Detail discussion on balance sheet structure
and statement of profit and loss.

120 minutes
Preparation
of
Statement of Profit
and Loss with and
without adjustments.

Practice
exercise.

75 minutes
Preparation
of
Balance Sheet

70 minutes
Discussion
on
balance
sheet
structure
and
statement of profit
and loss.
Integration of Trial
Balance with the
Financial
statements

110 minutes
Complete
exercise
on
trial balance
and financial
statement.
Concluding the class
discussion
(5/10
minutes)

Readings: Financial Accounting A Managerial Perspective, 5e, R Narayanaswamy, PHI,

Chapters 3 & 4, Chapter 7, pp. 303-306, and Chapters 8, 9, and 10.

Session 8-9: Property, Plant & Equipment: Methods of calculating the periodic depreciation
charge Straight Line Method; WDV Method, Sum-of-years digits. Methods of recording
depreciation in the accounting books.
5

60 minutes
Methods
of
calculating
the
periodic
depreciation
charge Straight
Line
Method;
WDV
Method,
Sum-of-years
digits method

30 minutes
Provision
of
depreciation and effect
of
depreciation
on
companies.

60 minutes

Practice
exercise.

Accounting
standard
governing depreciation.

Readings: Financial Accounting A Managerial Perspective, 5e, R Narayanaswamy, PHI,

Chapter 7.

Session 10-11: Introduction to Annual Report New Schedule VI

40 minutes
Detailed understanding
of the structure of New
Schedule VI

110 Minutes
Understanding the real life financial
statements picked up from the annual
report of a reputed company.

Readings:
Relevant case material to be distributed in the class.

Sessions 12 - 16: Financial Statement Analysis

Horizontal and Vertical Analysis, Ratio analysis: Current Ratio, quick ratio, inventory turnover,
receivables or debtors turnover, creditors turnover, total assets turnover, fixed assets turnover,
current assets turnover, capital turnover, defensive-interval ratio, Debt-Equity ratio, Debt to
capital ratios, interest coverage, dividend coverage, total coverage, gross profit margin, net profit
margin, expenses ratios, ROA, ROCE, ROE, EPS (AS-20), DPS, Dividend pay-out ratio, P/E
ratio, Earnings yield, Net Worth.
Sessions 12 - 16 (375 minutes)
45 minutes
Overview of FSA. Tools
of financial statement
analysis

90 minutes
Horizontal and vertical analysis.
Exercises and interpretations

240 minutes
Ratio analysis with examples and their
interpretation and comparison.

Readings:
Financial Accounting A Managerial Perspective, 5e, R Narayanaswamy, PHI, Chapter 11.

Sessions 17 - 18: Cash Flow Statement

Purpose, preparation & interpretation of Cash Flow statement
6

Sessions 11 & 12 (150 minutes)

40 minutes
Cash Flow Statement

35 minutes
Interpretation of Cash Flow
statement

75 minutes
Practice exercises

Readings:
Financial Accounting A Managerial Perspective, 5e, R Narayanaswamy, PHI, Chapter 12, pp.
531-536 and pp. 550-551.

Sessions 19 - 20: Project Report / Presentations