Course 2026-2027 a.y.

Main topics are:

• Introduction to Financial Statements Analysis (FSA)
• Analysis of the Income Statement: reformulation choices, core vs. non-core operating income, unusual items, operating income and EBITDA.
• Analysis of the Balance Sheet: from the liquidity to the managerial format; reformulation options, ratios, and alternative measures of financial indebtedness.
• The ratio system: analysis of ROI and ROE; from financial leverage to operating liabilities leverage; linkage between financials and KPIs.
• Analysis of the Cash Flow Statement: reformulations and ratios; Creative Cash Flow Reporting and empirical evidence.
• Non-GAAP Earnings: the manager's perspective and the investor/analyst perspective on Street Earnings.
• Accounting for Intangibles and the influence of different accounting principles (IFRS vs. local GAAP) on FSA.
• Accounting Quality Analysis: identifying 'red flags' through FSA.
• Forecasting financial statements and operating performance.
• Valuation: theory and practice applied to FSA.
• FSA from the auditor's perspective.

• Understand the discretionary choices an analyst has to make in order to assess the financial statements (and the related reformulations and ratios) coherently with the objectives of the financial analysis (decision-making process).
• Understand the definitions and measurement options underlying the concepts of core operating income and unusual items in order to measure the persistent income-based results.
• Understand the relevant alternatives for the analysis of the profitability.
• Understand the relevant choices in order to prepare and analyze the cash flow statement and the relevant cash-based ratios.
• Understand how the adopted accounting standards influence the financial analysis.
• Understand how to approach the analysis of the relationships between financials and KPIs and their relevance to build a forcasting model.
• Understand the relevance of Non-GAAP metrics.
• Understand the logic underlying the accounting quality.

At the end of the course students will be able to...

• Define and measure the core operating income and the related ratios.
• Define and measure unusual items in order to analyze persistent or recurring income.
• Define and measure all the ratios commonly used in professional practice.
• Prepare and analyze the cash flow statement and related reformulations and ratios.
• Reconcile GAAP and non-GAAP earnings and critically assess the informational content of management-reported measures.
• Assess accounting quality and identify red flags using FSA techniques.
• Build a forecasting model of financial statements and apply standard valuation approaches to a public company.
• Conduct a comprehensive financial statement analysis of a public company, integrating industry analysis, KPIs, and sensitivity analysis.
• Design, prompt, and iterate on a Generative AI assistant to support an end-to-end FSA workflow, while retaining full accountability for the output.

• Lectures
• Guest speaker's talks (in class or in distance)
• Practical Exercises
• Collaborative Works / Assignments

This edition of the course adopts a continuous assessment approach designed to develop both technical proficiency in FSA and the professional skills required to apply that knowledge in practice. Lectures and in-class exercises introduce the core techniques; group activities translate those techniques into real-world deliverables.

During the course teachers will present several incidents and case studies that are all based on real companies. Exercises and quantitative examples will also be presented by the teachers.

Group composition and continuous assessment.

At the beginning of the course, students form groups (number to be determined during the first class). Each group works together throughout the semester on a structured set of activities that form the core of the continuous assessment.

The educational and operational goal is for each group to function as a team of analysts.

A good team should be able to appoint a leader to whom they can delegate class participation and presentation of their findings.

Therefore, attendance (registered with the university's specific tool) is not required for all group members: instructors will ensure that at least one group member is present at each session, even on a rotating basis.

In this way, instructors want to encourage groups to operate as a true team of professionals and encourage students to take on responsibilities when representing the entire group.

Group activities include (tentative):

1)    Group project:

a)    AI-supported FSA. Each group selects a public company and conducts a comprehensive financial statement analysis throughout the course. The deliverables at the end of the course are: (i) a working AI assistant designed to support the FSA process, and (ii) the FSA report on the selected company, produced with the support of that agent. Students remain fully accountable for the accuracy, interpretation, and judgment underlying the report; the agent is a tool, not a substitute for analytical reasoning.

b)    Video updates on the group project. Throughout the course, each group records a small number of short video updates summarizing project progress, methodological choices, and open questions. The videos are used by the instructor to provide structured feedback during the course and to monitor the iterative development of both the AI agent and the analysis. Detailed instructions will be posted on the course platform.

2)    Group assignments on specific topics. Short structured assignments distributed during the course to consolidate the techniques presented in class.

3)    In-class Case discussions led by groups. On selected sessions, designated groups lead the discussion of a real-world case, guiding the class through the analysis, the diagnostic framework, and the implications for an external user of the financial statements.

Use of AI in this course.

Generative AI tools are an integrated part of the learning experience

Attending students are assessed through continuous assessment, which combines group activities and a final individual exam:

1)    Group works and activities: 70% of the final grade. This component includes:

• 50% - the group project (AI assistant + FSA report + Periodic Video Tapes),
• 10% - 2 group short assignments distributed during the course,
• 10% - 3 group-led case discussions.

The exact internal allocation across these components will be communicated at the beginning of the course in the final version of the syllabus.

3)    Final individual exam: 30% of the final grade. The exam is written and covers the technical content of the course (reformulations, ratios and cash flow statement; approximately the first half of the sessions). It combines short exercises, multiple-choice questions, and matching questions, and lasts approximately 45 minutes.

Non-attending students are assessed exclusively through a final individual written exam, which represents 100% of the final grade.

The comprehensive final exam covers all the sessions and all the materials indicated in the syllabus, and lasts approximately 1 hour and 15 minutes.

The exam is structured as follows:

1. Exercises, multiple-answer questions, and quantitative and qualitative multiple-choice questions designed to assess students' knowledge and ability to apply the concepts covered in the first part of the course: FSA techniques (concepts, reformulations, and ratios).
2. Multiple-answer and multiple-choice questions designed to assess students' knowledge and understanding of the main conceptual and quantitative aspects covered in the second part of the course: advanced applications of FSA.

Available on the course website:

• Slides (required).
• Short readings (required).
• Exercises and questions grouped by topic (required).
• Supplemental professional and academic readings (optional, not required for the final exam).
• Detailed instructions for the group project, including the AI assistant design template and video-update guidelines;
• Detailed instructions for the short assignments.

Suggested (but not required) Textbooks:

• Financial Reporting, Financial Statement Analysis and Valuation, 10th Edition, James M. Wahlen, Stephen P. Baginski, Mark Bradshaw, March 2022
• Thomas R. Robinson, International Financial Statement Analysis, CFA Institute, Wiley, 4/e, 2020.

Available on the course website:

• Slides (required).
• Short readings (required).
• Exercises and questions grouped by topic (required).
• Supplemental professional and academic readings (optional, not required for the final exam).

Suggested (but not required) Textbooks:

• Financial Reporting, Financial Statement Analysis and Valuation, 10th Edition, James M. Wahlen, Stephen P. Baginski, Mark Bradshaw, March 2022
• Thomas R. Robinson, International Financial Statement Analysis, CFA Institute, Wiley, 4/e, 2020.