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FINANCIAL ANALYSIS

Syllabus

EN IT

Learning Objectives

LEARNING OUTCOMES:
provide basic knowledge on financial statement analysis tools and instruments

KNOWLEDGE AND UNDERSTANDING:
recognize relationship among statements and to be able to distinguish main elements in financial statements. Lastly, the ability to intepret the financial dynamics of listed firms

APPLYING KNOWLEDGE AND UNDERSTANDING:
to be able to provide a basic financial statement analysis and to understand its results

MAKING JUDGEMENTS:
expressing opinion about the overal financial health of listed firms

COMMUNICATION SKILLS:
to be able to explain, adopting a differences in differences approach, why some companies perform better than others

LEARNING SKILLS:
Capacity of gradually acquiring the drivers of performance of different firms

Prerequisites

Have been succeed in a basic courses of financial accounting and related recognition and measurement of the most important items in financial statements

Program

The course is designed to provide you with a basic understanding of financial statement analysis. Specific attention will be devoted in providing students basic instruments as common size analysis, restatements, ratios. Then other intermediate instruments will be provided as the cash flow analysis, detection of the investing and financing activities rationale, earnings forecast and the overall evaluation about the quality of financial reports. Moreover, part of the course will be devoted at disentagling the relationship between book values and market values and basics of financial valuation and modelling.

Here below, the tentative program that will be covered during the six weeks of the course:

First week: The relationship among Financial statements and new trajectories in the financial reporting landscape;

Second week: The basis for the analysis: decomposing and recomposing FSs and related reclassification. Vertical and horizontal common size analysis;

Third week: Ratio analysis;

Fourth week: Non-recurring items, business seasonality and financing and dividends distribution policies;

Fifth week: Book values vs Market values. technical analysis and reflections about stock market under and over valuations;

Sixth week: The big picture and mock exam.

Books

Robinson et al., (2020) International Financial Statement Analysis, 4th edition, Wiley. Chapters 1, 2, 7 in full, Chapter 4: only paragraphs 6, 7 and 8 (subparagraphs included), Chapter 5: only paragraph 7 (subparagraphs included), Chapter 6: only paragraph 4 (subparagraphs included).
Papers and book chapters recommended by the instructor. All these readings are necessary for successfully completing the exam.

Bibliography

Subramanyam (2014), Financial Statement Analysis, 11th edition, McGraw-Hill. This book is recommended for students that would like to dig more into the subjects. Other readings will be recommended by the instructor during the course.

Teaching methods

Teaching Hours and Teaching Methods

Teaching methods:
Lecture 60%
Exercises, Discussion and group presentation, guest lectures 40%
(Homework assignments are the basis for class discussion)

Non-attending students will find the practical case and the presentation made by guest speaker will be make available on the course web page.

Exam Rules

Group Project presentation and report 40%
Final exam 60%
Total 100%
The following factors are considered in the class participation and they can give to students additional individual bonuses:

1. Volunteering answers to questions or asking good questions.
2. Responses to discussion questions.
by the way, there will not be differences in the evaluation system and related rewards between attendants and non-attendants. The latters can benefit some bonuses by demonstrating their good attitudes and understanding during the group project presentations. The results of written trials will be make available on the course web page as soon as will become available.

Students will succeed in the exam by getting a grade equal or higher than 18/30. Below 18 student will be rejected and invited to attempt again at a future date after having deepened the lackings reported.
Within the range of positive grades (from 18 to 30) it is possible to recognize the following sub-range and related features:
18-20. The student can succeed in the light of a very basic understanding of all topics and ability to report and discuss them with a very minor critical approach.
21-23. The student got the basics well and is able to understand and quickly well-debrief the major concepts and issues faced during the course.
24-26. The student is mature with respect to the course contents and related understand. He/she can fairly report all concepts in a correct manner by well balancing synthesis and analysis
27-29. The understanding is full and appreciable. The student not only has learned much, he/she is also able to infer his/her knowledge in connection with other subjects and discipline and he/she is also able to open up future critical issue.
30- 30 cum laude. The student's preparation and performance is outstanding. He/she is at ease in perfectly respond to whatever issue around those faced during the course. He/she is able to make connection and bridges in the vast field of business administration and this attitudes demonstrate the student's potential to succeed in the job market in the areas related with the course.