ACCOUNTG 597 - Financial Statement Analysis
Financial Statement Analysis (FSA) (ACCOUNTG 441) provides a broad framework for using financial statement analysis to evaluate a firm’s business operations and to predict its future condition. It is designed to achieve two main objectives. The first is to appreciate and understand the connections between firms’ operation strategies and their financial statements. This understanding then serves as the basis for the second objective, which is to develop a critical, user’s perspective to analyze and interpret financial statements to gain further insights into firms’ performance.
To achieve these objectives, important tools and skills are taught throughout the course with cases based on actual companies’ financial statements. Main topics include, but are not limited to, ratio and profitability analysis, analysis of the statement of cash flows, pro forma forecasting, (credit and governance) risk analysis and earnings quality analysis.
The course is targeted to a wide range of students, including those preparing for careers in general management as well as in investment banking, financial analysis and consulting. The material is designed for students with little or no background in security analysis.
The course assumes a solid understanding of financial accounting at the level of ACCOUNTG340 and of financial management at the level of FINANCE350. Students are also expected to be comfortable with working with Excel spreadsheets and with collecting data from various databases.
The course has little or no overlap with other accounting electives, specifically ACCOUNTG342 (Corporate Financial Reporting) and ACCOUNTG 442 (Valuation). Students uncomfortable with core financial accounting concepts are highly recommended to take Corporate Financial Reporting (ACCOUNTG342) before, or concurrent with, FSA. The topics covered in FSA are designed to precede, and to complement, those discussed in Valuation (ACCOUNTG 442).
A course packet of readings, lecture notes, financial statements, and cases is required. Course text to be announced.
There will be a course pre-assignment consisting of selected readings. There is no deliverable due the first day of class.