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2020/2021  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
  • Blended learning
Last updated on 26-06-2020

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 formHome assignment - written product
Individual or group examIndividual exam
Size of written productPlease see text below
No maximum number of pages, students have 2 hours to complete the assignment.
Assignment typeWritten assignment
DurationWritten product to be submitted on specified date and time.
Grading scale7-point grading scale
Examiner(s)One internal examiner
Exam periodAutumn
Make-up exam/re-exam
Same examination form as the ordinary exam
Description of the exam procedure

On-line test

 

Final exam - Financial Statement Analysis:
Sub exam weight80%
Examination formHome assignment - written product
Individual or group examIndividual exam
Size of written productMax. 15 pages
Students have 4 hours to complete the assignment.
Assignment typeWritten assignment
DurationWritten product to be submitted on specified date and time.
Grading scale7-point grading scale
Examiner(s)One internal examiner
Exam periodWinter
Make-up exam/re-exam
Same examination form as the ordinary exam
Description of the exam procedure

On-line test. 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
The teaching will be a combination of:
Prerecorded lectures.
Online sessions, where students can ask questions regarding the prerecorded lectures and discussion of solutions to cases/exercises.
On campus activities will primarily consists of discussion of solutions to cases/exercises


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 26-06-2020