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Accounting 432
Financial Statement Analysis Syllabus
WINTER 2011
Instructor: Dr. Yao Tian Classes
Office: BUS 2-32B Lec X5: W 18:30-21:30 (BUS 1-5)
Phone: 492-8008 Office Hour: MW 14:00 to 15:00
E-mail: [email protected] or by appointment Course Description and Objectives:
This course is designed to introduce students to financial statement analysis and financial valuation. Students will learn how to analyze, interpret and use financial techniques in reviewing corporate financial statements. It should be of interest to students in
accounting, finance, and business in general. Some main objectives of the course are:
• Develop a framework to analyze financial statements using prior financial knowledge along with newly acquired financial analysis techniques.
• Obtain a strong understanding of each component of the principal financial statements distributed by corporations.
• Obtain the financial tools necessary to understand all aspects reported within financial statements.
• Learn to evaluate and present the financial results of a company both in peer group and written format.
• Develop knowledge regarding ratio analysis, trend analysis, earnings forecasting, bankruptcy, and financial predictors.
• Develop communication skills necessary to be successful in working in the business environment.
Prerequisite: ACCTG 415 or 412
In-class Activities:
Our classes will be a combination of lectures and discussions of problems. Most of the concepts and techniques taught in this course are best illustrated and learned through problem solving. Therefore, we will analyze problems in class. In addition to attending classes, it is expected that you will read the relevant chapters of the textbook and any other assigned material before coming to class.
Textbook:
Financial Statement Analysis and Security Valuation, Fourth Edition, by Stephen H.
Penman. McGraw-Hill/Irwin, 2010.
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Grades in the course will be assigned on the following basis:
Attendance and Participation:
Term Project (Group):
5%
25%
Mid-term Exam: 30%
Final Exam (Comprehensive): 40%
Total 100%
Notes:
Term Project: Students will work in groups (of four to five) to conduct a case study.
The case will be distributed on March 2nd in class. Each group will analyze the case to prepare a written report, which is to be submitted in class on March 30th. Note that late submission will not be accepted. Organization of groups is entirely up to the students and all members of the group will receive the same mark.
Mid-term Exam: Mid-term exam will take place on Feb 16th in class. There will be no deferred mid-term exam. Students, who miss the mid-term exam with a legitimate and documented reason, will have the weight of the midterm exam reallocated to the final exam. A student who wishes his/her exam be re-evaluated must submit the request within 5 business days after the exam is returned.
Final Exam: Final exam will take place on April 13th in class. The material being tested will be comprehensive, including all chapters covered throughout the course.
There will be no make up exam for the final.
Final Grade: The final percentage mark will be calculated based on the weightings listed above, and a final letter grade will be assigned to the percentage mark in accordance with University Regulations [Section 23.4(5) of the University Calendar].
Grades in this course will be based on a combination of absolute achievement and relative performance.
Code of Student Behavior: The University of Alberta is committed to the highest standards 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 (on line at www.ualberta.ca/secretariat/appeals.htm) and avoid any behavior which could potentially result in suspicions of cheating, plagiarism, misrepresentation of facts and/or participation in an offence. Academic dishonesty is a serious offence and can result in suspension or expulsion from the University.
Classroom Conduct: Any students who are disruptive during class will be required to leave. Continual talking will not be tolerated as it is disruptive to both the instructor and fellow students. All cell phones must be turned off during the class period.
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Preliminary Class Schedule
Date Topics Chapters
Jan12 Introduction to Fundamental Analysis 1, 2
Jan19 How Financial Statements Are Used in Valuation 2, 3
Jan26 Accrual Accounting and Valuation: Pricing Book values 5
Feb 2 Accrual Accounting and Valuation: Pricing earnings 6
Feb 9 The Analysis of the Financial Statements 7
Feb16 Midterm Exam (in class)
Feb23 Reading week - No Classes
Mar 2 The Analysis of Statement of Shareholders' Equity 8
Mar 9 The Analysis of the Balance Sheet and Income Statement 9
Mar16 Analysis of Profitability 11
Mar23 The Analysis of Sustainable Earnings and Growth 12
Mar30 Creating Accounting Value and Economic Value (Case Due in Class)
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Apr 6 Quality of Earnings Analysis 17
Apr13 Final Exam (in class)
