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2017/2018  MA-MMBAO3024U  Financial Statement Analysis and Managerial Economics

English Title
Financial Statement Analysis and Managerial Economics

Course information

Language English
Course ECTS 4 ECTS
Type Mandatory
Level Part Time Master
Duration One Semester
Start time of the course Autumn, Spring
Timetable Course schedule will be posted at calendar.cbs.dk
Study board
Study Board for Master of Business Administration
Course coordinator
  • Jesper Rangvid - Department of Finance (FI)
Main academic disciplines
  • Managerial economics
  • Accounting
Last updated on 30-06-2017

Relevant links

Learning objectives
To achieve the grade 12, students should meet the following learning objectives with no or only minor mistakes or errors: To be awarded the highest mark (12), the student, with no or just a few insignificant shortcomings, must fulfill the following learning objectives:
  • Be able to read and understand financial statements including notes in the annual report
  • Be able to apply financial statements for decision making including profitability analysis, credit analysis and firm valuation
  • Be able to apply microeconomic principles to decision making within a firm
  • Be able to explain how perfectly competitive markets function
  • Be able to apply game theoretic models to analyze strategic situations
Financial Statement Analysis and Managerial Economics:
Exam ECTS 4
Examination form Home assignment - written product
Individual or group exam Individual exam
Size of written product Max. 15 pages
Assignment type Project
Duration Written product to be submitted on specified date and time.
Grading scale 7-step scale
Examiner(s) Internal examiner and second internal examiner
Exam period Summer and Winter
Make-up exam/re-exam
Same examination form as the ordinary exam
A written case assignment based on a case or a subject chosen by the teacher. The assignment must be formulated and given to the students at least nine days prior to the expiration of the deadline. It should be 15 pages long and submitted to CBSLearn. The exam is held internally, and the assignment is put forward and assessed by the relevant faculty.

Alternative examination format: The make-up/re-examination will be held as an oral examination if the number of registered candidates for the make-up examination/re-take examination warrants that it may most appropriately be held as an oral examination.
Course content and structure

Managerial economics deals with resource allocation and strategic decisions made by managers. The course shows how microeconomic principles can be applied to company decision making. The emphasis is on stylized practical problems that may face anyone in a management position. The three main sections of managerial economics are supply & demand analysis, pricing strategy, and the economics of information. Cost analysis is necessary to determine the most cost efficient method of production, including which components are better sourced from other companies. An understanding of costs, together with demand conditions, is also important in deciding how products should be priced. The second part of the course deals with demand, market segmentation, and the use of quality and quantity discrimination. In the final part the focus is on game theort and the role of asymmetric information and here we cover both economic incentives and bidding in auctions.


Financial statement analysis is the process of reviewing and analyzing a company's financial statements to make better economic decisions. Financial statement analysis consists of four main sections. First, we introduce the components of the financial statements including the income statement, balance sheet, statement of changes in owners’ equity and cash flow statement and show how transactions are recorded (basic debit-credit entries) and how these transactions enter into the financial statements. We also address the conceptual differences between accrual and cash flow based accounting. Second, we show how profitability and credit risk can be measured. Key financial ratios are defined and analysed and we discuss why it is crucial that accounting data are measured consistently across time and firms. Third, forecasting is essential as it serves as the foundation for many business decisions including whether to extend loans to firms or estimating the value of a corporation. Thus, we address how to develop prom forma statements (i.e. income statement, balance sheet and cash flow statement), which articulate. We also address how to add realism in the projected earnings and cash flow measures. Finally, we discuss the different valuation approaches and their strengths and weaknesses. The concept of cost of capital is also introduced and different techniques to estimating cost of capital are discussed.



Teaching methods
The course has diverse teaching methods using lectures, cases, readings and discussions. The class meetings are interactive and require ongoing engagement of the students.
Feedback during the teaching period
The feedback
Feedback is given to the student together with the grade when written and oral exams have been evaluated.

The evaluation
At the evaluation unit at CBS’s Economic & Analysis department we ask you to evaluate the overall course. In other words if there has been exercise classes and lectures the evaluation should include both. We evaluate every course and faculty to secure and strengthen the professional level of the offered course.
Student workload
Lectures 34,5 hours
Preparation + Exam 75,5 hours
Expected literature

Syllabus will be available, well in time, before the first session.

Last updated on 30-06-2017