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2019/2020  KAN-CASCO1001U  Financial Statement Analysis

English Title
Financial Statement Analysis

Course information
Language English
Course ECTS 15 ECTS
Type Mandatory
Level Full Degree Master
Duration One Semester
Start time of the course Autumn
Timetable Course schedule will be posted at calendar.cbs.dk
Study board
Study Board for MSc in Economics and Business Administration
Course coordinator
  • Ole Vagn Sørensen - Department of Accounting (AA)
Main academic disciplines
  • Accounting
  • Economics
Teaching methods
  • Face-to-face teaching
Last updated on 20-06-2019

Relevant links
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.
Course prerequisites
Students are expected to possess knowledge about accounting including bookkeeping at least at the bachelor level.
Admission req.
Bachelor level
Examination
The exam in the subject consists of two parts:
Midterm - Financial Statement Analysis:
Sub exam weight20%
Examination formWritten sit-in exam on CBS' computers
Individual or group examIndividual exam
Assignment typeMultiple choice
Duration2 hours
Grading scale7-point grading scale
Examiner(s)One internal examiner
Exam periodAutumn
AidsLimited aids, see the list below:
The student is allowed to bring
  • USB key for uploading of notes, books and compendiums in a non-executable format (no applications, application fragments, IT tools etc.)
  • Non-programmable, financial calculators: HP10bll+ or Texas BA II Plus
  • Books (including translation dictionaries), compendiums and notes in paper format
The student will have access to
  • Access to the personal drive (S-drive) on CBS´ network
  • Advanced IT application package
Make-up exam/re-exam
Same examination form as the ordinary exam
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, the programme office will inform the students that the make-up examination/re-take examination will be held as an oral examination instead.
Description of the exam procedure

 

 

 

Final exam - Financial Statement Analysis:
Sub exam weight80%
Examination formWritten sit-in exam on CBS' computers
Individual or group examIndividual exam
Assignment typeWritten assignment
Duration4 hours
Grading scale7-point grading scale
Examiner(s)One internal examiner
Exam periodWinter
AidsLimited aids, see the list below:
The student is allowed to bring
  • USB key for uploading of notes, books and compendiums in a non-executable format (no applications, application fragments, IT tools etc.)
  • Non-programmable, financial calculators: HP10bll+ or Texas BA II Plus
  • Books (including translation dictionaries), compendiums and notes in paper format
The student will have access to
  • Access to the personal drive (S-drive) on CBS´ network
  • Advanced IT application package
Make-up exam/re-exam
Same examination form as the ordinary exam
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, the programme office will inform the students that the make-up examination/re-take examination will be held as an oral examination instead.
Description of the exam procedure

Multiple Choice questions can be an integrated part of the exam set.
Course content, structure and pedagogical approach

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.
Description of the 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.
Feedback during the teaching period
Feedback will be given in the form of Multiple Choice questions and review questions during the course.
Student workload
Participation in lectures 66 hours
Preparation for lectures 312 hours
Preparation for exam 40 hours
Exam 4 hours
Expected literature

Christian Petersen and Thomas Plenborg: “Financial Statement Analysis for decision makers” (draft).
Financial Reporting, Financial Statement Analysis, and Valuation. Sixth edition
Selected articles
Last updated on 20-06-2019