FIN510 Financial Statement Analysis



Course Catalog Description

Introduction

This course aims to expand students’ understanding of corporate financial reporting. The course is designed to prepare students to (1) interpret financial statements, (2) evaluate the alignment between business strategies and financial performance, (3) identify potential business risks, and (4) compare 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 covers financial statement information, tools of financial statement analysis, and forecasting and valuation techniq


Campus Fall Spring Summer
On Campus
Web Campus

Instructors

Professor Email Office
Fang-Chun Liu
fangchun.liu@stevens.edu Babbio 412

More Information

Course Outcomes

After completing this course, students will be able to:

  1. Describe the accounting principles for documenting economic events that affect a firm’s financial position;
  2. Demonstrate proficiency in financial reporting mechanics, including the effect of transactions and adjusting entries on financial statements;
  3. Read and understand basic financial statements including the income statement, balance sheet, statement of changes in shareholders’ equity, and statement of cash flows;
  4. Understand the accounting choices that companies make and the implications of these choices for the information presented in a company’s financial statements;
  5. Conduct financial common-size analysis and ratio analysis to evaluate a company short term and long term performance, particularly on the following dimensions: profitability, efficiency, liquidity, and solvency;
  6. Evaluate the alignment between short term financial outcomes and long term strategic goals.

Course Resources

Textbook

  • International Financial Statement Analysis, 3rd edition, by Robinson, Henry, Pirie, and Broihahn. ISBN: 978-1-118-99947-9

Grading

Grading Policies

Grading:

The scale for grades is: A >92; A- 92~90; B+ 89~85; B 84~80; B- 79~75; C+ 74~70; C 69~65; C- 64~60; F<60

  • First Exam: 10%
  • Final Exam: 20%
  • Assignments: 30%
  • Group Term Project: 30%
  • Class Participation: 10%

Exams: The first exam is scheduled on September 20, 2016. It will cover financial reporting mechanics and will require you to prepare financial statements. The comprehensive final exam is scheduled on December 6, 2016.

Make-up Exams will be given only for documented medical or family emergencies, at my discretion. Documentation for emergencies needs to be submitted to me for the consideration of granting a make-up exam. If you have no documentation, you will not get a make-up exam. A grade of 0 will be assigned for unexcused absences. If you have a medical/family emergency, let me know BEFORE the exam – no excuses will be accepted after the scheduled exam time.

Assignments: Periodically, you will be given assignments (normally done by group, the one you choose for completing the final project) to be completed prior to class. You are required to submit the assignments electronically via Canvas AND hand in a hard copy at the beginning of class. Attendance at all class meetings and active involvement in any in-class discussions are expected. In-class group presentations of your assignments are normally required. If you must miss class for an approved reason, you will be responsible for proactively obtaining all materials from a classmate and completing any required group work. Your involvement in in-class discussions and presentations of your group assignment will be evaluated and reflected on your final grade.

Group Term Project: A detailed description of the term project will be distributed and posted on Canvas later in the semester. You will need to form a group – ideally each team should have 4 people. You will prepare the required spreadsheets, calculations, and analyses for the identified companies. The data will be shared with other member(s) of the group in order to prepare the final report comparing these companies on all of the metrics we will study this semester. Each group will need to submit your report electronically via Canvas AND hand in a hard copy at the beginning of class.

The term project presentations should be approximately 20 minutes per group. The presentations will utilize information from your financial statement analysis project and address more subjective questions; you will be provided with a list of suggested topics and will also have flexibility in selection.

Class Participation: Your score will be determined at the discretion of the instructor based on a subjective evaluation of the quality (not necessarily, the quantity) of your participation in the class discussions, and overall contribution to class learning. Regular attendance is a very important part of class participation score and excused absence is limited to two times. Throughout the semester, you are required to take the same seat that you choose on the first day of class (if possible).


Lecture Outline

Topic Reading
Week 1 Ch1: Introduction
Week 2 Ch 2: Financial Reporting Mechanics
Week 3 Ch 3: Financial Reporting Standards
Week 4 First Exam
Week 5 Ch 4: Understanding Income Statements
Week 6 Ch 5: Understanding Balance Sheets
Week 7 No Class (Follow Monday Class Schedule)
Week 8 Ch 6: Understanding Cash Flow Statements
Week 9 Ch 7: Financial Analysis Techniques
Week 10 Ch 8: Inventories
Week 11 Ch 9: Long-Lived Assets
Week 12 Ch 10: Non-Current Liabilities
Week 13 Ch 12: Financial Statement Analysis: Application
Ch 17: Evaluating Quality of Financial Reports
Week 14 Group Term Project Presentation
Week 15 Final Exam