The course will introduce methodology and analytic techniques for both the financial dimensions of corporate management and the nature and functionality of financial statements. Case-by-case analysis will introduce issues of financial analysis, revenue recognition, and risk analysis. Accounting analysis, GAAP-FASB principles of accounting treatment on business projects, the valuation of cash flow forecasts, earnings valuation, credit and banking valuation, corporate financial policies for increased shareholder wealth, corporate takeovers, and financial disclosure requirements will be explored.
- Financial analysis and forecasting
- properties of financial statements
- cash flow and ratio analysis
- credit analysis
- GAAP-FASB rules of corporate disclosure
- revenue recognition, financial risk assessment
- financial profitability, financial position
- annual report disclosure
- Capital and operating leases
- sales and direct financing leases
- lease accounting and disclosure requirements
- Earnings valuation
- price-earnings analysis
- earnings-based valuation models
- mergers and acquisitions
- accounting and business valuations
- Credit analysis, financial distress, and risk and bankruptcy models
- corporate financial policies
- equity security analysis
Upon introduction of theory, students will be exposed to practical financial applications, and case studies. Upon completion of each case, students, in groups, will be required to prepare a management report focusing on:
- identification of the most important problem described in the case;
- complete financial and business analysis of quantitative reports, financial statements;
- an evaluation of the various alternatives;
- a recommended course of action with “predicted/forecasted” financial data, based on the recommended course of action.
Methods Of Instruction
Material will be presented within a lecture format.
Means of Assessment
Minimum of 3 evaluations, none of which will exceed 40%, for a total of 100%.
At the end of the course, the successful student should be able to:
- apply financial analysis skills to actual and simulated financial statements;
- analyze corporate, divisional and consolidated financial statements and be able to compare like companies by using ratio analysis;
- extend, revise, or prepare pro forma financial reports;
- present financial findings in a management report.
Textbooks and Materials to be Purchased by Students
- White, G.I., Ashwinpaul, C.S., and Fried, D. The Analysis and Use of Financial Statements, latest ed. Toronto: John Wiley & Sons Canada Ltd. (required)
- Krishna, G.P., Bernard, V.L., and Heady, P.M. Business Analysis and Valuation, latest ed. New York: SouthWestern College Publishing. (optional)
- Helfert, E.A. Techniques of Financial Analysis, latest ed. Toronto: Irwin Publishing. (optional)
- Students are required to have a financial business calculator.