82174 - Analysing and Interpreting Financial Statement Lab

Learning outcomes

The course provides students with the main techinques of analysis of financial statement, useful to understand the financial performance of an organization and for strategic decision-making. At the end of the course students are able: (a) to understand the role of profit as a source of financing; (b) to understand some of the important financing considerations that organizations face; (c) to understand how ratios can be used to help analyze an organization's financial statements and how these analyses can be used to take action.

Course contents

This course provides for 40 teaching hours (82174 - 4 credits) and it is integrated with Cost Accounting (79310 - 8 credits), held by prof. Franco Visani, as part of the Accounting for Decision Making Integrated Course (I.C. 82173 - 12 credits in total).

I recommend to study and eventually review the contents of Principles of Accounting (82165) before attending this course.

Course language: English.

This course teaches you how to use financial statement information in analysing a firm's performance and financial position.

Using real-life examples and cases, the course takes you through the main steps of a business performance analysis process:

(1) Introduction to financial statement analysis; - Business analysis and valuation framework; - Conceptual introduction to valuation approaches; - Accounting Analysis 1: Basics of accounting and accounting institutions and their implications for financial statement analysis.

Readings: Palepu, K., P. Healy, and E. Peek, Business Analysis and Valuation: IFRS Edition, Chapter 1.

Additional reading materials will be available on the e-learning Platform of the course: https://elearning-cds.unibo.it/;

(2) Strategy analysis, Competitive strategies and Corporate strategy analysis

Readings: Palepu, K., P. Healy, and E. Peek, Business Analysis and Valuation: IFRS Edition, Chapter 2.

Additional reading materials will be available on the e-learning Platform of the course: https://elearning-cds.unibo.it/;

(3) Accounting analysis for adjusting accounting distortion and steps in Performing Accounting analysis

Readings: Palepu, K., P. Healy, and E. Peek, Business Analysis and Valuation: IFRS Edition, Chapter 3.

Additional reading materials will be available on the e-learning Platform of the course: https://elearning-cds.unibo.it/;

(4) Recasting of financial statements

Readings: Palepu, K., P. Healy, and E. Peek, Business Analysis and Valuation: IFRS Edition, Chapter 3.

Additional reading materials will be available on the e-learning Platform of the course: https://elearning-cds.unibo.it/.

 

MID TERM OPTIONAL EXAM on parts 1, 2, 3, and 4.

 

(5) Accounting distortions and accounting adjustments for performance analysis

Readings: Palepu, K., P. Healy, and E. Peek, Business Analysis and Valuation: IFRS Edition, Chapter 4.

Additional reading materials will be available on the e-learning Platform of the course: https://elearning-cds.unibo.it/.

(6) Financial analysis by ratios for performance assessment in a benchmarking context: profitability, liquidity, solvency ratios.

Readings: Palepu, K., P. Healy, and E. Peek, Business Analysis and Valuation: IFRS Edition, Chapter 5.

Additional reading materials will be available on the e-learning Platform of the course: https://elearning-cds.unibo.it/.

 

II PARTIAL EXAM on parts 5 and 6, ONLY FOR STUDENTS WHO PASSED THE MID TERM EXAM.

Readings/Bibliography

Palepu, K., P. Healy, and E. Peek, Business Analysis and Valuation: IFRS Edition, Cengage Learning, 4th Edition, 2016, ISBN 9781473722651, chapters from 1 to 5 only.

Additional mandatory reading materials and exercises/assignments useful to pass the exam will be available on the e-learning platform of the course: https://elearning-cds.unibo.it/

Teaching methods

Course Language: English

 

The course consists of lectures, interactive discussions and exercises and thus requires active participation. It provides:

- Traditional lectures

- Case Study Analysis

- Project e team works

- Exercises

- Readings

 

The key purpose is to provide questions and insights to students in understanding the topic of the course. In doing so, alongside the traditional lectures, will be provided opportunities for discussion and intervention for students.

 

 

Assessment methods

STANDARD ASSESSMENT

The final mark will be obtained by passing:

- a final written exam* (2 hours), in form of exercises, case studies, open questions or, alternatively,

- the mid-term and second partial written exams* (weighting 15 points each and lasting 1 hour). To undergo the second partial exam a sufficient mid-term exam is required.

 

ATTENDING STUDENTS' OPTION

ATTENDING students (i.e. attending at least 70% of teaching hours) have the option to choose and alternative assessing method. In this case, the final mark will be obtained as a combination of:

- a written mid-term exam* (15 points maximum), the same as the standard assessment;

- a team work** (3 students maximum) including the financial analysis of a real case, with discussion during the last 2 lessons (9 points maximum);

- during the second partial written exam*, an exercise on part 5 of the program, i.e. accounting distortions and accounting adjustments for performance analysis (6 points maximum).

Moreover, attending students can obtain up to 2 additional points on the final mark, based on class participation and class assignments' correction.

 

The mark of Analysing and Interpreting Financial Statement Lab will be integrated with the mark of Cost Accounting (prof. Franco Visani), with a weight of 4/12, given its 4 credits in relation to the total 12 credits of Accounting for Decision Making.

 

* Bring your calculator.

** TEAM WORK INSTRUCTIONS:

-The team work concerns the financial analysis of a firm.

-Students will form the groups (max 3 members) and will choose the business case to study.

-This part of the assessment involves your soft skills (team building and presentation). All team members have to take part in the presentation.

-Presentation is due on the last two classes.

-The class presentation should be undertaken in PowerPoint format; a hard copy of your slides and the related report should be submitted to the lecturer for assessment purposes, as well as an electronic copy (excel spreadsheets included), by the same dates by email to monica.bartolini4@unibo.it.

-The presentation should take 20 minutes.

-You will be assessed on the quality of both your report and presentation, that should include a list of key issues highlighted by your case.

-The other students/groups and the teacher might pose you questions.

Teaching tools

Exercises, slides, additional mandatory reading materials and curse information will be available at https://elearning-cds.unibo.it/

Office hours

See the website of Monica Bartolini