Advanced Financial Analysis
Module description
This is an optional course whose principal function is to ensure that you are able to use the tools needed for analysing annual reports. You will learn how to critically assess the content of annual reports and how to make sense of reported numbers. Specifically, in this course you will learn several approaches to the analysis of published financial statements such as of companies whose shares are traded on a stock exchange and which follow IFRS. The course will also discuss reporting incentives of company’ managers and how these may affect the quality of financial statements. In this course you will learn how to adjust reported numbers, and assess performance based on the revised figures, in view of these reporting incentives.
Full module specification
| Module title: | Advanced Financial Analysis |
|---|---|
| Module code: | BEAM063 |
| Module level: | M |
| Academic year: | 2020/1 |
| Module lecturers: |
|
| Module credit: | 15 |
| ECTS value: | 7.5 |
| Pre-requisites: | |
| Co-requisites: | BEAM024 Advanced Financial Accountinge |
| Duration of module: |
Duration (weeks) - term 2: 11 |
Module aims
The principal aim of this module is to enable students to review annual reports critically and to apply the fundamental tools used by investment analysts such as financial statement analysis, credit analysis and cross-industry analysis. The module builds on the theoretical accounting knowledge that the students gain from their Term 1 courses and extends it to a practical sphere to enable them to engage in detailed financial statement analysis.
ILO: Module-specific skills
- 1. develop a framework for assessing a firms financial performance and position that is useful to fund managers, financial analysts, strategy advisors and the stakeholders of the company
- 2. apply the different approaches used to perform financial statement analysis
- 3. explain and discuss the discretion available to managers in preparing financial statements
- 4. determine and apply appropriate analyst adjustments to a companys financial statements to facilitate comparison with another company
- 5. critically interpret and analyse a firms financial performance and position from its annual reports
ILO: Discipline-specific skills
- 6. apply a set of structured techniques to reach a well-defined decision within a noisy environment, where a clearly defined unique solution does not exist
- 7. communicate in writing a detailed and convincing company assessment, appropriate both to a practitioner as well as an academic audience
ILO: Personal and key skills
- 8. demonstrate an ability to undertake independent study and manage time effectively
- 9. demonstrate problem solving skills
Learning activities and teaching methods (given in hours of study time)
| Scheduled Learning and Teaching Activities | Guided independent study | Placement / study abroad |
|---|---|---|
| 28 | 122 | 0 |
Details of learning activities and teaching methods
| Category | Hours of study time | Description |
|---|---|---|
| Lectures | 22 | 11 x 2-hour lectures |
| Tutorials | 6 | 3 x 2-hour tutorials |
| Guided Independent Study | 62 | Reading assigned financial statements, reviewing class notes, supporting materials and preparing for class discussion and tutorials |
| Guided Independent Study | 60 | Preparing for assessments |
Formative assessment
| Form of assessment | Size of the assessment (eg length / duration) | ILOs assessed | Feedback method |
|---|---|---|---|
| Review exercises. Each lecture is accompanied by a review exercise. These will be of exam-level difficulty. | 1-1.5 hours of independent work | 1-9 | Suggested solutions on ELE |
| Tutorial exercises. Each tutorial will have several questions. These will be of exam-level difficulty | 2-3 hours of independent work followed by 2 hours of in-class discussions | 1-9 | Suggested solutions on ELE |
Summative assessment (% of credit)
| Coursework | Written exams | Practical exams |
|---|---|---|
| 0 | 100 | 0 |
Details of summative assessment
| Form of assessment | % of credit | Size of the assessment (eg length / duration) | ILOs assessed | Feedback method |
|---|---|---|---|---|
| In-class test | 30 | 50 minutes | 1-9 | Written feedback |
| Examination | 70 | 2 hours | 1-9 | Suggested solutions on ELE |
Details of re-assessment (where required by referral or deferral)
| Original form of assessment | Form of re-assessment | ILOs re-assessed | Timescale for re-assessment |
|---|---|---|---|
| Examination and in-class test | 2-hour written exam | 1-9 | August Examination Period |
Syllabus plan
- Course overview and introduction
- Ratio analysis
- Operating vs. financial items in financial statement
- Reformatting and analysis of the cash flow statement
- Analysis of taxes
- Earnings management
- Fixing reported numbers – depreciation and R&D
- Off balance sheet debt
- Coursework test
- Pension accounting and related disclosure
- Catch-up, review and feedback
Indicative learning resources - Basic reading
- Palepu, K., Healy, P. and Peek, E. (2016), Business Analysis and Valuation – IFRS edition (4th ed.), Andover: Cengage Learning Business Press.
Supplementary reading:
- Penman, S.H. (2006) Financial Statement Analysis and Security Valuation (3rd ed.), London: McGraw-Hill.
- Picker et al. (2016) Applying IFRS Standards, (4th ed.) Wiley.
Module has an active ELE page?
Yes
Origin date
01/04/2016
Last revision date
19/12/2017