30526 - FINANCIAL ANALYSIS AND PERFORMANCE MEASUREMENT

The course assumes a good command of basic financial accounting topics.

This course has two primary goals. First, it intends to develop students’ skills in understanding, analyzing, and interpreting financial statements. Conceptually, the course emphasizes that producers and users of financial statements have different objectives and informational needs. At the same time, the course is applied in that it teaches students how to analyze actual financial statements data to make informed business decisions and assessments. Second this course is designed to broaden and deepen students’ conceptual and technical understanding of accounting as it is used for management purposes. The emphasis in the course is on financial controls, which provides the dominant form of control in the vast majority of decentralized organizations. This module provides support in business decisions, evaluation of organizational performance, or in evaluation of others (and/or be evaluated) through the use of financial and non-financial information.

The first part of the course (sess. 1-12) has the goal to advance your understanding of how financial statements could be analyzed in order to appreciate performances. After a short introduction on what financial analysis is and what it should consider, this goal is accomplished through the following steps:

• Understanding balance sheets, income statements and statement of cash flow.
• Quantitative Analysis
• From Quantitative to qualitative analysis
• Red Flags on financial analysis

The second goal of the course is to focus on management and control systems for ensuring good enterprise control. Using financial controls requires managers to make decisions about:

• Responsibility structures.
• Performance measures.
• Performance evaluations.
• Rewards and incentives.

• Be knowledgeable users of financial statements as part of their professional responsibilities as financial analysts or managers.
• Understand the structure of performance measurement systems in complex environments.

Carry-out the following analyses:

• Business strategy analysis.
• Accounting analysis.
• Financial analysis.
• Analysis of responsibility and performance management systems.

• Face-to-face lectures
• Online lectures
• Exercises (exercises, database, software etc.)
• Case studies /Incidents (traditional, online)
• Individual assignments
• Group assignments

• Individual assignments will be delivered via Respondus Lockdown browser and will consist of multiple choice (qualitative and quantitative) questions.
• Group assignments consists in a case study to be prepared with your classmates, and delivered in due date. Groups will be composed at the beginning of the course. 2 sessions will be devoted to presentation of group works.

The evaluation of attending students will be based on: A. 2 Group assignments (one for each part of the course) receiving a maximum of 10 points in total (5 points each); B. 4 assignments delivered during the course (2 for part1 and 2 for part2). Each assignment will consist of 10 multiple choice questions to be solved in 15 minutes, and will be delivered through respondus lockdown browser. Each assignment allows max 2 points. At the end of the course, the 3 assignments with highest value will be considered (1 date can be missed without consequences). Assignment C. The Final Exam. The time allowed for attending and not attending students is the same, but attending students will have to answer to less questions. Max points collectable with final exam: 16 more details in detailed syllabus. The individual assignments and the exam questions which will be asked to all students will test step by step their knowledge and understanding by assessing their dominance of key basic notions and models presented in the course, like their ability to be knowledgeable users of financial statements as part of their professional responsibilities as financial analysts or managers, and their understanding of the structure of performance measurement systems in complex environments. Instead, the group work (or the additional questions in the exam dedicated only to non attending students) will be focused on assessing the students ‘ability to apply their knowledge and understanding, more in details applying models to complex reality, recognising elements firm specific ad adapting models to specific reality carrying out the following analyses: business strategy analysis, accounting analysis, financial analysis, analysis of responsibility and performance management systems.

The evaluation of non-attending students will be based, only, on the same final exam as attending students. All questions need to be answered and will be graded a maximum of 31 points. Since the structure of the final exam for non attending students is the same as for the attending, please refer to the paragraph in that section about the correspondence between assessment methods and the intended learning outcomes.

• Slides, exercises and cases are uploaded on Bboard platform.
• Articles and papers (for the first part of the course) are uploaded on blackboard platform.
• Text book (for the second part of the course): K.A. MERCHANT, W.A. VAN DER STEDE, Management Control Systems: performance measurement, evaluation and incentives, 2017, 4th edition, (ISBN-13: 9781292110554 (print) / 9781292110585 (PDF) / 9781292181875 (ePub). Chapter included are specified in the detailed schedule).