Student guide Facoltą di Economia A.A. 2004/05 Lauree Triennali

Financial statement analysis
Alessandro Cortesi
Davide Moro
Aim of the course
The course provides an overview of the use of financial accounting information for evaluating past performances and predicting future performance of a company or a division.
This course is designed to prepare students to interpret and analyze financial statements effectively. The viewpoint is that of the user of financial statements. We discuss each financial reporting issue in terms of its effect on assessments of a firm's profitability and risk. We then apply the analytical tools and concepts in competitor analysis, credit decisions and valuation. This course is designed primarily for students who expect to be intensive users of financial statements as part of their professional responsibilities.
The main goal of the course is thus to provide students with a broad, practical perspective to work on financial statement analysis. According to this, students will be ask to develop a project work consisting in a financial statement analysis report and to present it at the end of the course.
The course will mainly deal with the following topics:
-          accounting analysis;
-          how the financial statements integrate with each other;
-          what the key numbers are in the various financial statements;
-          how to analyse investment, financing and operating
-          how one assesses a firm’s profitability and the factors that affect profitability;
-          a reasonable assessment of the financial condition of the firm;
-          whether the firm is worthy of credit.
-          how to assess value creation for alternative strategic options
Written examination structured as following:
-           Open questions and multiple choices about the main topics of the course
-           Exercises: application of tools and techniques for financial statement analysis
Reading list
Textbook: Financial Statement Analysis – International Edition, Wild J.J., Subramanyam K.R., Halsey R.F. (eight edition), McGraw-Hill, 2003. ISBN: 0-07-123277-X.
Cases & Exercises: contained within the textbook and provided by the lecturers