Financial Statement Analysis for Investors

Lecturer: 

Keith Dyer FCA

Module description

The Financial Statement Analysis for Investors module is designed as an introduction to financial reporting and to the complexities of financial statement analysis for students with little or no background in accounting.

The above outcomes will be addressed in lectures and classes.  Students will be expected to have read the appropriate chapter references prior to the lectures, which may sometimes be interactive. The class questions should be studied and attempted prior to the classes so that further issues may be developed.  Suggested solutions to all of the questions used in the module will be provided.

The module will comprise one 3 hour session each week, which will consist of a lecture and group work.  There will also be a 1 hour class each week.

The key topics covered are:

  • How does business work?  Where does a company’s money come from and where does it go?
  • An overview of accounting and financial reporting to show how the items we have identified above appear in the company’s financial statements.
  • Financial ratio analysis.  Analysing the financial statements to gain an understanding of the underlying business.
  • How accountants measure and report.  What values do the financial statements contain.               
  • Business combinations and consolidated accounts
  • Creative accounting and fundamental analysis

Learning outcomes 

By the end of the module, students will be expected to be able to:

understand the accounting framework and the conceptual basis of financial reporting;

  • understand financial statements, accounting reports and the accounting vocabulary;
  • apply and calculate suitable financial ratios using published accounting data so that you can look through the numbers to the underlying business;
  • understand the behaviour and limitations of financial ratios;
  • appreciate how assets, liability and earnings numbers may be affected by accounting policy choice, creative accounting and international differences in accounting.

Assessment

  • 1 group assignment (approx 2,000 words to be submitted by Dec/Jan (25%)
  • 2-hour exam in January (75%)
 

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