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University of Alberta, Alberta School of Business Departiment of Accounting and Business Analytics
Syllabus Fall 2021
Accounting 630(X01): Financial Statement Analysis
Professor: Jack Stecher BUS B-09 T 6:00–9:00
Office Hours: By appointment
Course Objectives, Learning Goals, and Content
This course focuses on improving your ability to analyze financial reports and understand the intrinsic value of debt and equity securities, with an emphasis on equity securities. After completing the course, you will add two valuable tools to your skill set:
• financial statement analysis
• accounting-based equity valuation
Course Materials
The recommended textbook for the course is
• Lundholm and Sloan, Equity Valuation and Analysis, Fifth edition.
This text is not required, and should be viewed a complement to the material we cover. The main course materials will be financial reports from publicly traded companies. We will not use Harvard cases or anything similar, but will instead work with financial reports as you will actually encounter them. I will post financial statements (or links to them), problem sets, articles, lecture slides, and the like on the course website.
Exam and Course Project
You will take an in class, open book/open note midterm exam and will write a two-part final course project.
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The project involves a detailed analysis of a publicly traded company. You will complete the first part individually and the second part in a group of two or three. I will post requirements on the course website. You must receive my approval for the company you choose to analyze. The first part will be written, and will be due just before the reading week (i.e., on November 2nd). The second will include a written part and an in-class/online presentation. The presentations will take place in the last two weeks, and the written part of the second is due on the last day of class.
Grading
The grading breakdown is as follows:
Course Policies
Policy about course outlines can be found in Course Requirements, Evaluation Procedures and Grading of the University Calendar(§23:4(2)).
Attendance: I do not grade on attendance or participation. We are all adults, and I will not penalize you in any way whatsoever for missing classes. Instead, I will do my best to
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boost attendance by making classes worth attending. That said, you are responsible for all the material we cover in class and for any announcements I make in class. Additionally, class will be a mixture of lectures, discussions, and trading experiments. These activities will be useful for building your networks and learning from each other, in ways that are difficult or impossible to replicate outside of class.
Homework and Written Work: Turn in all homework and written work electronically.
I am willing to grant extensions for homework (though not for the midterm or the course project), provided I receive the homework before solutions are posted to the course website or covered in class.
Code of Student Behavior: The University of Alberta is committed to the highest stan- dards of academic integrity and honesty. Students are expected to be familiar with these standards regarding academic honesty and to uphold the policies of the University in this respect. Students are particularly urged to familiarize themselves with the provisions of the Code of Student Behavior (online athttp://www.governance.ualberta.ca) and avoid any behavior which could potentially result in suspicions of cheating, plagiarism, misrepresenta- tion of facts and/or participation in an offence. Academic dishonesty is a serious offence and can result in suspension or expulsion from the University.
Tentative Course Timetable
Sep 7 . . Course Overview and Introduction; review of present value; review of main financial statements
Sep 14 . . . Operating information in financial statements Sep 21 . . . Consolidations; time permitting, divestitures Sep 28 . . . Valuation, Part I Oct 5 . . . Valuation, Part II Oct 12 . . . In class midterm Oct 19 . . . Guest speaker; cost of capital, Part I Oct 26 . . . Guest speaker; cost of capital, Part II Nov 2 . . . Dupont analysis Nov 9 . . . .No class, Reading week Nov 16 . . . Bankruptcy risk Nov 23 . . . Cash flow analysis; forecasting Nov 30 . . . Special topics; presentations Dec 7 . . . Presentations
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COVID Related
The University published new measures for fall return to campus athttps://www.ualberta.
ca/news/2021/08/new-measures-for-fall-return-to-campus.html. This class fully adopts the most recent measures to keep everyone safe.
Face masks: It is unlikely to maintain a minimum of 2 meters between instructor or among students in the classroom. Therefore, all participates are required to wear face masks in the classroom, unless the university lifts this requirement.
Staying home when sick: Anyone who has any of the following COVID-19 symptoms is required to isolate for 10 days from the onset of symptoms, or until they receive a negative COVID-19 test result.
• Fever
• Cough
• Shortness of breath or difficulty breathing
• Loss of sense of smell or taste
• Sore throat (adults only)
• Runny nose (adults only)
Staying home and taking care of yourself when sick is important for your health and reduces exposure to others.