FIN510 Financial Statement Analysis


Course Catalog Description

Course Objectives

This course deals with:
(1) Interpretation of financial statements,
(2) Evaluation of the alignment between business strategies and financial performance,
(3) Identification of potential business risks, and
(4) Comparison of performance of different companies.
The course introduces business analysis and valuation techniques and utilizes real world data to help students comprehend financial statement analysis tools. Topics cover financial statement information, tools of financial statement analysis, and forecasting and valuation techniques. By the end of this course, you should be able to
• Demonstrate proficiency in financial reporting mechanics, including the effect of transactions and adjusting entries on financial statements, and the construction of financial statements
• Read and understand financial statements including the income statement, balance sheet, statement of changes in shareholders’ equity, and statement of cash flows
• Understand the accounting choices that companies make and the implications of these choices for the information presented in a company’s financial statements
• Use common-size analysis and ratio analysis to evaluate a company on the following dimensions: profitability, efficiency, liquidity, and solvency.



Course Format and Structure

Course Logistics
• Our weeks will run from Monday to Sunday. I will post information for the upcoming week by Sunday evening, so that when you log in on Monday mornings, you can begin the new week.
• Given the importance of Announcements, please check your Canvas Account settings to ensure that Notification Preferences for Announcements are set to “Notify me right away.”
• Adherence to deadlines is an important part of being a professional, and this course is no exception. Course requirements must be completed and submitted by the specified deadline. Due dates and delivery time deadlines are defined as Eastern Time (as used in Hoboken, NJ). To encourage you to stay on schedule, grade penalties will be applied to late assignments.

Instructor Contact Information
• I will typically respond on the same business day to any email received during working hours. As noted above, please include “FIN 510” in the email subject line.
• I am available to schedule meetings by appointment Monday through Friday through the semester.




Instructors

Teaching Professor Email Office
Dr. Elaine Henry
ehenry1@stevens.edu Babbio Center Room: 408

More Information

Course Requirements

Course Participation: Attendance, In-class Activities
Attendance at all classes is expected. Each member of the class is expected to arrive, be seated, and be ready for class on time, and to stay in class for the entire session. Participation also includes fully participating in all in-class activities and discussion board. If you are unwell and cannot attend a class, please contact me via email to arrange alternative participation.
Assignments
Specific instructions and point weighting for each assignment will be provided during the semester. Assignments will be given most weeks following class on Thursday and will usually have a due date of the following Monday by end of day. As noted, grade penalties will be applied to late assignments.
Exams
There will be two exams during the course as listed on the course schedule. The first exam will cover financial reporting mechanics including preparation of financial statements. Following the first exam, additional assignments may be given to ensure your full understanding of basic financial reporting. The format of the final will be discussed later in the semester.

Course Resources

Textbook

  • Required Text: International Financial Statement Analysis (CFA Institute Investment Series), 4th edition, 2020 by Thomas R. Robinson, Elaine Henry, and Michael A. Broihahn.
    This text is published by the CFA Institute and includes parts of the CFA (Chartered Financial Analyst) curriculum. Authors of the text are not compensated based on quantity of sales. Also, please note that the accompanying workbook is NOT required
    Other Materials
    Class notes (lecture slides) and some other related materials will be available on Canvas, which can be accessed at: stevens.edu/canvas. It is important that you regularly check Canvas and your Stevens e-mail account so that you do not miss any important course announcements. For course access or support, contact the TRAC at 201-380-6599 or 201-216-5500.
    For exams, students may use one of the calculator models authorized for use during CFA program exams:
    • Texas Instruments BA II Plus (including BA II Plus Professional)
    • Hewlett Packard 12C (including the HP 12C Platinum, 12C Platinum 25th anniversary edition, 12C 30th anniversary edition, and HP 12C Prestige)

Grading

Grading Policies

There is no provision for extra-credit assignments. Any letter grades will be based on the mean and standard deviation of grades on all assessments. Thus, grades for individual items provide an indication of your performance during the course but are approximations of the letter grade that would be calculated when grades for all assessments are included.

Weights
1 Participation(attendance and in-class activities) 12%
2 Midterm Exam 25%
3 Assignments 28%
4 Final Exam 35%

Lecture Outline

Class Date Topic Chapter Assignment
Week 1 2-Sep Overview of Financial Statement Analysis Ch 1
Week 2 9-Sep Financial Reporting Standards & Review of Mechanics of Financial Accounting Ch 2 Assignment 1
Week 3 16-Sep Income Statements Ch 3 Assignment 2
Week 4 23-Sep Balance Sheets Ch 4 Assignment 3
Week 5 30-Sep The Statement of Cash Flows Ch 5 Assignment 4
Week 6 7-Oct MIDTERM
Week 7 14-Oct Financial Analys is Techniques Ch 6
Week 8 21-Oct Inventory Ch 7 Assignment 5
Week 9 28-Oct Long-lived Assets Ch 8 Assignment 6
Week 10 4-Nov Intercorporate Investments Ch 13 Assignment 7
Week 11 11-Nov Non-current Liabilities Ch 10 Assignment 8
Week 12 18-Nov Financial Reporting Quality & Evaluating Quality of Financial Reports Ch 11 Ch 17 Assignment 9
25-Nov NO CLASSES. THANKSGIVING
Week 13 2-Dec Application of Financial Statement Analysis Basics of Forecasting and Valuation Ch 6 Ch 12
Week 14 9-Dec Course Recap & Presentations Assignment 10
Final Exam