Corporate Performance: Financial Statement Analysis

Curriculum guideline

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Course
FINC 3380
Discontinued
No
Course code
FINC 3380
Descriptive
Corporate Performance: Financial Statement Analysis
Department
Finance
Faculty
Commerce & Business Administration
Credits
3.00
Start date
End term
Not Specified
PLAR
No
Semester length
15 Weeks X 4 Hours per Week = 60 Hours
Max class size
35
Contact hours
Lecture: 4 Hours Total: 4 Hours
Method(s) of instruction
Lecture
Seminar
Learning activities

Material will be presented within a lecture format.

Course description
The course will introduce methodology and analytic techniques for both the financial dimensions of corporate management and the nature and functionality of financial statements. Case-by-case analysis will introduce issues of financial analysis, revenue recognition, and risk analysis. Accounting analysis, GAAP-FASB principles of accounting treatment on business projects, the valuation of cash flow forecasts, earnings valuation, credit and banking valuation, corporate financial policies for increased shareholder wealth, corporate takeovers, and financial disclosure requirements will be explored.
Course content
  1. Financial analysis and forecasting
    • properties of financial statements
    • cash flow and ratio analysis
    • credit analysis
    • GAAP-FASB rules of corporate disclosure
    • revenue recognition, financial risk assessment
    • financial profitability, financial position
    • annual report disclosure
  2. Capital and operating leases
    • sales and direct financing leases
    • lease accounting and disclosure requirements
  3. Earnings valuation
    • price-earnings analysis
    • earnings-based valuation models
    • mergers and acquisitions
    • accounting and business valuations
  4. Credit analysis, financial distress, and risk and bankruptcy models
    • corporate financial policies
    • equity security analysis

 

Upon introduction of theory, students will be exposed to practical financial applications, and case studies.  Upon completion of each case, students, in groups, will be required to prepare a management report focusing on:

  • identification of the most important problem described in the case;
  • complete financial and business analysis of quantitative reports, financial statements;
  • an evaluation of the various alternatives;
  • a recommended course of action with “predicted/forecasted” financial data, based on the recommended course of action.
Learning outcomes

At the end of the course, the successful student should be able to:

  1. apply financial analysis skills to actual and simulated financial statements;
  2. analyze corporate, divisional and consolidated financial statements and be able to compare like companies by using ratio analysis;
  3. extend, revise, or prepare pro forma financial reports;
  4. present financial findings in a management report.
Means of assessment

Minimum of 3 evaluations, none of which will exceed 40%, for a total of 100%.

Students may conduct research as part of their coursework in this class. Instructors for the course are responsible for ensuring that student research projects comply with College policies on ethical conduct for research involving humans, which can require obtaining Informed Consent from participants and getting the approval of the Douglas College Research Ethics Board prior to conducting the research.

Textbook materials

Textbooks and Materials to be Purchased by Students

  • White, G.I., Ashwinpaul, C.S., and Fried, D.  The Analysis and Use of Financial Statements, latest ed.  Toronto: John Wiley & Sons Canada Ltd.  (required)
  • Krishna, G.P., Bernard, V.L., and Heady, P.M.  Business Analysis and Valuation, latest ed.  New York: SouthWestern College Publishing.  (optional)
  • Helfert, E.A.  Techniques of Financial Analysis, latest ed.  Toronto: Irwin Publishing.  (optional)
  • Students are required to have a financial business calculator.
Prerequisites

FINC 2345 or FINC 2340

Equivalencies

Courses listed here are equivalent to this course and cannot be taken for further credit:

  • No equivalency courses