30024 - FINANCIAL STATEMENTS ANALYSIS
Course taught in English
The course assumes a good knowdlege of basic financial accounting. You should be reasonably familiar with with basics (mostly covered in Accounting Module 1 and Accounting Module 2) of accounting for external users main concepts: preparation, formats, dissemination and basic interpretation of financials information conveyed through financial statements. Additional knowledge of basics of statement analysis, corporate finance and business valuation, are welcome but not necessary.
Efficient resource allocation, and wise investment decisions play a key role for economic growht, worldwide. Invested resources are to be invested where additional wealth can be generated (i.e. good investments) and inefficient capital/resource allocation must be avoided as it is disfunctional for the entire financial ecosystem. The most relevant information outlet - on an external user perspective - are the financial statements. Therefore, the quality of the financial reporting process, financial statement analysis, measurement of accounting quality, and subsequent firms’ valuation are key tools for investment decisions. They help investors (current or potential), as well as analysts, and any other potentially interested stakeholder to better assess: firms’ profitability, risk and future performance. A process that plays a central role for capital market functioning, investment decisions, portfolio and corporate management, and more broadly for the economy as a whole. This course aim at providing you in information set to properly assess investment opportunities using accounting publicly released information.
The main topics covered in this course are:
- A refresh of basic accounting concepts and main tools
- The Analysis of Financial Statements
- Earnings Quality analysis: determinants, economic consequences and proxy.
- Firms’ valuation using the most common valuation techniques.
- An overall understanding of role and responsibility of key players in the financial information field (analysts, investor relators, and so on)
At the end of the course you will be famialir with:
- financial accounting process, preparation and dissemination of related infor.
- Accounting standard and firms' disclosure
- Financial Analysis using financial statements on key dimension such: Profitability, Liquidity and Solvency
- Financials Forecasting
- Bankruptcy and Fraud Detection
- Assessment of Accounting quality and its determinants and relevant measurement tools.
- Firms Valuation main valuation techniques
- Interplay among information senders and receivers (e.g. Investor relation managers, analysts and investors).
Students will be able to manage real cases and build, interpret and report on firms’ overall “quality”. At the end of the course you will be able to implement an analysis of firms’ financial statements, assess its quality of earnings, deliver a firm valuation and, finally and potentially make an investment recommendaiton.
- Face-to-face lectures
- Guest speaker's talks (in class or in distance)
- Group assignments
- Interactive class activities (role playing, business game, simulation, online forum, instant polls)
A) Group Assignment goal is twofold. First it fosters group working, time management and "search of data". Second, as it is also presented in class improves students ability on preparation of strctured reports and presentation skills.
B) Guetst speakers will introduce students to hot and relevant topic such the "value of ESG and sustainability" on firms valuation; the valuation of firms in the M&A process and the role played by investor relators in current "social media driven" days.
|Continuous assessment||Partial exams||General exam|
The final grade of the course is determined as a sum of: Group Projects and a Final Written Exam.
Group Projects are worth 11 points
Final Exam is worth 20 points.
Final Grade is on total of 31 points.
For non attending Students the Final Exam is as per attending students (20 points total).
As substitute of Group Projects "Non-attending students" are to deliver 3 individual projects similar in spirit to the ones related to Group projects of attending students (11 points total)
Antonio Marra. (2021). Financial Statement Analysis. Firms’ Analysis and Valuation. McGraw-Hill, In press.
- Lecture notes
- Additional readings (research papers) uploaded on Blackboard.