Module ECON42915: FINANCIAL STATEMENT ANALYSIS

Department: Business School (Economics and Finance)

ECON42915: FINANCIAL STATEMENT ANALYSIS

Tied To

• L1K209: Accounting and Finance (see Postgraduate Handbook 2011-2012 for details)
• N3K209: Finance (Accounting and Finance)

Pre-requisites

Corequisites

Excluded Combinations

Aims

• This module has been designed to extend students’ knowledge of financial statements gained from Corporate Reporting. The aim is therefore to critically evaluate the main models and techniques used by analysts to extract information from the statements in order to answer questions relating to corporate performance, risk, and the forecasting of earnings.

Content

• Revision of financial statements
• Basics of analysis
• Liquidity of short-term assets; related debt-paying ability
• Long-term debt-paying ability
• Profitability
• Decision-making and statement of cash flows for investors
• Extended analysis: specific industries
• Voluntary disclosures
• Accruals and earnings management.

Learning Outcomes

• By the end of this module students should:
• have an advanced knowledge and critical understanding of the importance and concepts of corporate financial reporting;
• have an advanced knowledge and critical understanding of the information needs of management for control and decision-making;
• have an advanced knowledge and critical understanding of how firms create value and how these values are reflected in the financial statements;
• have an advanced knowledge and critical understanding of the fundamental models of corporate valuation and their relationship to published financial data;
• have an advanced knowledge and critical understanding of the essential requirements for accounting treatments for some important items in financial statements.

• have acquired specialist knowledge of the main financial analysis techniques used by analysts and be able to apply these tools to published financial statements to assess corporate performance and prospects.

• Written Communication;
• Planning, Organising and Time Management;
• Problem Solving and Analysis;
• Using Initiative;
• Numeracy;
• Computer Literacy.

Modes of Teaching, Learning and Assessment and how these contribute to the learning outcomes of the module

• The module will be delivered by a combination of lectures, practical sessions, case studies and guided reading appropriate for conveying the specialist knowledge and skills set out in the learning outcomes.
• The summative assessment is a financial statement analysis designed to test students’ knowledge, understanding, and ability to apply techniques of financial statement analysis.

Teaching Methods and Learning Hours

Summative Assessment

Formative Assessment

Work prepared by students for practical sessions; answers to questions either discussed during a practical session, or posted on DUO.