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2010/2011  KAN-ASC_AS20  Financial Statement Analysis

English Title
Financial Statement Analysis

Course Information

Language English
Point 15 ECTS (450 SAT)
Type Mandatory
Level Full Degree Master
Duration One Semester
Course Period Autumn
Time Table Please see course schedule at e-Campus
Study Board
Study Board for MSc in Economics and Business Administration
Course Coordinator
Christian V. Petersen
Main Category of the Course
  • Economics, macro economics and managerial economics
Last updated on 29 maj 2012
Learning Objectives
Aim of the course
The purpose of ’Financial Statement Analysis for Decision Makers’ is to provide the students with the rigorous tools that are needed to carry out financial statement analysis from a decision oriented perspective.

At the exam the students must be able to:
Describe how elements in the annual report are recognized, measured and classified.
Analyse a firm’s profitability, growth and risks based on the analytical profit and loss statement and balance sheet
Calculate and interpret financial ratios that describe a firm’s economic well being.
Assess accounting quality in a firm’s financial data.
Value firms based on a variety of valuation models.
Demonstrate the ability to assess the strengths and weaknesses of various economic decision models used for valuation, credit rating and incentive program purposes.
Prerequisite
Access requirements for non-ASC students Students are expected to possess knowledge about accounting including bookkeeping at least at the bachelor level. Admission req. Bachelor level
Marking Scale 7-step scale
Exam Period December/January
Individual 4-hour written exam, written and electronic aids allowed cf. ‘Rules for using electronic aids during written examinations’ and ‘Regulations for written tests at CBS’. The exam is external, graded by a teacher and an external censor, cf. General Degree Regulation § 25, S.no.2. The regular exam will take place in January. Make-up/ re-exam takes place in February/Marts
Examination
Prerequisites for Attending the Exam
Course Content

Accounting information is used by decision makers as input to a variety of decision models. The required accounting information depends on the specific task at hand (e.g. valuation) and the decision model applied (e.g., discounted cash flow model). For instance, analysts within corporate finance use financial statement analysis to determine the historical level of profitability in order to estimate future earnings.

The course contains the following core elements:
Introduction to the elements of the annual report.
Methods for measuring profitability (the ability to create value for shareholders), growth and operational and financial risks
Assessment of accounting quality (earnings quality)
Budgeting
Firm valuation
Accounting issues in compensation contracts and credit analysis

Learning process
Research and theory based lectures are mixed with exercises and cases. Lectures provide the students with the necessary tools to make financial analyses. Through cases the students learn how to apply theory and use a variety of decision models in practice.

Teaching Methods
Student involvement is an integral part of the course. The course offers plenty of opportunities for students to participate actively through discussions and casework. They get plenty of opportunity to apply theory to practical issues (e.g., estimate firm value by applying different valuation models).

Development of individual and social skills (competencies)
Candidates are trained in presenting solutions to a variety of issues in financial statement analysis and valuation. Student presentations include verbal as well as written communication. Students are responsible for their own learning. They are encouraged to engage in study groups.
Literature

Christian Petersen and Thomas Plenborg: “Financial Statement Analysis for decision makers” (draft).
Financial Reporting, Financial Statement Analysis, and Valuation. Sixth edition
Selected articles