Goals:
The aim of this course is to prepare students to be able to understand, analyse and interpret the financial statements of the companies (balance sheet, profit and loss statement, annual report, statement of changes in equity and statement of cash flows) in order to make intelligent investment decisions.
Content:
The course of financial statement analysis starts introducing the need for reporting of financial information and integrating the agency problem, the users, sources and limitations of financial information, the basic analysis tools (percentages, variation rates and ratios), and the role of IFRS and consolidated accounts. This introduction is followed by a comprehensive study and interpretation of the main financial statements (balance sheet, profit and loss statement, annual report, statement of changes in equity and cash flow statement). The course concludes with the analysis of the financial position of a firm (liquidity, solvency, financial equilibrium and self-financing), the management of current capital (working capital, funding needs, operating cycle and cash conversion cycle) and the firm’s profitability (ROA, ROE and ROI).
Literature:
· Gibson, Ch. (2013) Financial Statement Analysis, 13th Edition. Mason.
· Fridson, M. and Alvarez, F. (2011) Financial Statement Analysis: A Practitioner's Guide, 4th Edition. Wiley.
· Ross, S. A., Westerfield, R. W. and Jaffe, J. (2010) Corporate finance, 9th Edition. McGraw-Hill.
