Financial Analysis and Reporting (2235.YR.003924.1)

General information

Type:	OBL	Curs:	1	Period:	S semester
ECTS Credits:	4 ECTS

Teaching Staff:

Group	Teacher	Department	Language
Year 1	Giulia Redigolo	Economía, Finanzas y Contabilidad	ENG

All financial and economic decisions in both the private and public sectors use accounting information as the basis for action. Good control of the accounting allows not only to explain past financial decisions but also to initiate strategic actions, grounded on useful financial information, and lead the business into new directions. Financial Statements are the primary information firms publish about themselves; they are the lens on a business. Financial Statement Analysis calibrates the lens to bring the business into focus.

Financial reporting has its own language, multiple users and may take a variety of forms. Accounting systems and rules may also differ across firms and countries. While all this may confuse you in the process of learning, it should not discourage you from taking the challenge. To fully appreciate financial reporting and its implications, you will first need to learn the underlying accounting concepts and relationships. Good analysis comes from good understanding. Equipped with the fundamentals of accounting, you would be able to understand financial reporting, interpret financial information, implement useful analyses and forecast future trends. You will discover the relevance of financial reporting and analysis, and turn it into a useful tool with its variety of applications as shaped by the interaction of management, policy makers, investors, and other stakeholders.

The course of Financial Analysis and Reporting will prepare you to understand how businesses and business strategies work, how they generate value, and how the value they generate is captured (or not captured!) in financial statements.
At the end of the course, students will:

1. Become familiar with the use of the accounting terminology and understand to some extent accounting regulation;
2. Understand the economic context of the financial reporting and the interplay between different interested parties in this process;
3. Interpret trends and uncover red flags in the main financial statements (balance sheet, income statement, cash flow statement);
4. Distinguish the interrelation between then main financial statements and understand their limitations;
5. Understand and interpret the basic ratios related to the company's liquidity, financial position and profitability;
6. Be able to predict the impact that a change in internal (e.g., accounting method) or external factors (e.g., economic conditions) may have on the financials of a company;
7. Assess and estimate the quality of financial reporting, identify potential management practices and envision possible adjustments;
8. Distinguish permanent accounting methods from temporary accounting choices.

1. INTRODUCTION TO FINANCIAL STATEMENTS and REPORTING

2. THE ANALYSIS OF FINANCING ACTIVITIES

3. THE ANALYSIS OF INVESTMENT ACTIVITIES

4. BUSINESS COMBINATIONS and CONSOLIDATION

5. THE ANALYSIS OF OPERATING ACTIVITIES

6. THE ANALYSIS OF LIQUIDITY and PROFITABILITY

7. QUALITY OF EARNINGS and CONSERVATIVE ACCOUNTING

The course combines lectures with examples, cases and academic research evidence. Lectures are delivered by the Professor. The course implies class discussion and student involvement.
Participants will work on cases/examples that will allow them to deepen and solidify their understanding of the core accounting concepts, and to practice with the application of financial reporting and analysis tools.

ASSESSMENT BREAKDOWN

Bibliography:
- Business Analysis and Valuation - IFRS Edition, by K.G. Palepu, P.M. Healy, E. Peek (last edition)
- Financial Statement Analysis and Security Valuation, by Stephen Penman (3rd edition)
- Financial Accounting and Reporting: A Global Perspective, by H. Stolowy, Y. Ding, L. Paugam (2020 Ed)

- International Financial Reporting Standards Official Pronouncements, IFRS Foundation

Additional Bibliography or Materials:
-Cases, scientific articles or any additional bibliography will be made available on the course moodle.

Group	Teacher	Department
Year 1	Giulia Redigolo	Economía, Finanzas y Contabilidad