MBA 2425 Financial Accounting

MBA 2425 Financial Accounting

Course code: 
MBA 2425
Department: 
Strategy and Entrepreneurship
Credits: 
4
Course coordinator: 
Ren Mingchuan
Heidi Wiig
Product category: 
Executive
Portfolio: 
MBA China
Semester: 
2019 Autumn
Active status: 
Active
Teaching language: 
English
Course type: 
One semester
Introduction

The primary goals of the course are twofold: (1) to help students read and evaluate financial statements and (2) to further students’ ability to speak the language of accounting. By advancing these skills, students can be a more effective decision-maker and thus better positioned to succeed at their business and professional endeavors.

Learning outcomes - Knowledge
  • Understand basic accounting terminology and be able to draw appropriate inference from key financial metrics.
Learning outcomes - Skills
  • Describe the format, content, and concepts of balance sheets, income statements, statement of cash flows and footnote to financial statements
  • Explain the two-prong process for recording business events, which include (a) Define the four generally accepted accounting principles (GAAP), including the principles of recognition, valuation, presentation, and disclosure and describe the role of GAAP in financial reporting. (b) Describe the basic mechanics of bookkeeping.
General Competence
  • Be able to critically analyze financial statements using various tools and techniques, including common-size financial statements and ratios
  • Recognize that accounting information is embedded in social, cultural, market, and political environments and that financial information can create tensions among decision-makers.
Course content

This course is made up of six topics:

1. Introduction

  • Corporate strategy and financial reporting;
  • Three books: financial accounting, managerial accounting and tax accounting;
  • The Generally Accepted Accounting Principles (GAAP): U.S. GAAP, International GAAP (i-GAAP) and Chinese GAAP (c-GAAP);
  • Companies’ financial statements, i.e. balance sheet, income statement, statement of cash flow, and footnotes;
  • Globalization of accounting and corporate governance;
  • ZTE case, a Chinese telecommunication company.

 

2. Balance Sheet

  • Costco Wholesale’s balance sheet;
  • The layout of balance sheet and its three components: Assets, Liabilities and Shareholders’ Equity;
  •  Double-entry bookkeeping and accounting cycle;
  • Book value Vs market value: the case of U.S. Big Three auto companies (Tesla, GM and Ford).

 

3. Income Statement

  • Costco Wholesale’s income statement;
  • The layout of income statement and its two components: Revenue and Expenses;
  • Accrual accounting Vs cash accounting;
  • The lines between operating and non-operating; recurring and non-recurring activities;
  • Sears: a recent bankruptcy case.

 

4. Statement of Cash Flow

  • Costco Wholesale’s statement of cash flows;
  • Layout of statement of cash flow and its three components: cash flows from operation (CFO), cash flows from investing (CFI) and cash flows from financing (CFF);
  • Direct and indirect methods;
  • Statement of cash flows’ link with balance sheet and income statement.

 

5. Annual Report

  • Companies’ annual reports are made up of: the management discussion and analysis (MD&A), financial statements and audit opinion;
  • Three options: (1) 10K only, (2) 10K and annual report, or (3) wrap annual report;
  • The most critical information in annual reports;
  • Examples of 3M (option 3) and Walmart (option 2).

 

6. Financial Analysis

  • Common-size analysis and ratio analysis;
  • DuPont framework: ROA and ROE;
  • Costco Wholesale’s ratios
  • Operating and cash conversion cycle.
Teaching and learning activities

The course is conducted as a teaching module, where students have classes all day for four subsequent days, a total of 32 hours.

The teaching is practice oriented, with a heavy use of real companies’ financial statements. Also, it focuses on Main Street companies (rather than Wall Street firms), covering manufacture, retail and service companies. References are often made to current popular press publications, such as Wall Street Journal, Business Week, Fortune, Forbes, etc.

Pre-course preparation by all students allows class time to be used most productively, and allow everyone to participate in the discussion which, in turn, enhances the prospect of advancing the financial accounting competencies listed above.

This is a course with continuous assessment (several exam components) and one final exam code. Each exam component will be graded using points on a scale 0 -100. The components will be weighted together according to the information in the course description in order to calculate the final letter grade for the course. Students who fail to participate in one/some/all exam components will get a lower grade or may fail the course. Candidates may be called in for an oral hearing as a verification/control of written assignments.

Specific information regarding the points system and the mapping scale beyond the information given in the course description will be provided in class. This information may be relevant for requirements for term papers or other hand-ins, and/or where class participation can be one of several elements of the overall evaluation.

The course is a part of a full MBA and examination in all courses in the MBA programme must be passed in order to obtain a certificate for the MBA degree.

Software tools
No specified computer-based tools are required.
Additional information

HBS and Other Cases

  • Harvard Business School case: Depreciation at Delta Air Lines and Singapore Airlines (A) (9-198-001);
  • Harvard Business School case: statements of cash flow: three examples (9-193-103);
  • Baoneng-Vanke Saga: A Failed Hostile Takeover in China, by M. Ren.

Corporate Annual Reports

  • Apple (2017);
  • Tesla (2017);
  • Southwest Airlines (2017);
  • Amazon (2017);
  • Lianhua (2017), a Chinese retailer;
  • China Eastern Airline (2008);
  • Spotify (2016), a European streaming company.
Qualifications

Granted admission to the BI-Fudan MBA programme. Please consult our student regulations.

Exam categoryWeightInvigilationDurationSupport materialsGroupingComment exam
Exam category:
Activity
Form of assessment:
Class participation
Exam code:
MBA 24251
Grading scale:
China
Grading rules:
Internal examiner
Resit:
All components must, as a main rule, be retaken during next scheduled course
10No -Individual Class attendance, counts 10% of the total grade
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
MBA 24251
Grading scale:
China
Grading rules:
Internal and external examiner
Resit:
All components must, as a main rule, be retaken during next scheduled course
40No4 Day(s)Group (5 - 6)Group assignments, counts 40% of the total grade.
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
MBA 24251
Grading scale:
China
Grading rules:
Internal examiner
Resit:
All components must, as a main rule, be retaken during next scheduled course
50Yes1 Hour(s)
  • All printed and handwritten support materials
Individual Final quiz, open-book, counts 50% of the total grade
Exams:
Exam category:Activity
Form of assessment:Class participation
Weight:10
Invigilation:No
Grouping (size):Individual
Support materials:
Duration: -
Comment:Class attendance, counts 10% of the total grade
Exam code:MBA 24251
Grading scale:China
Resit:All components must, as a main rule, be retaken during next scheduled course
Exam category:Submission
Form of assessment:Written submission
Weight:40
Invigilation:No
Grouping (size):Group (5-6)
Support materials:
Duration:4 Day(s)
Comment:Group assignments, counts 40% of the total grade.
Exam code:MBA 24251
Grading scale:China
Resit:All components must, as a main rule, be retaken during next scheduled course
Exam category:Submission
Form of assessment:Written submission
Weight:50
Invigilation:Yes
Grouping (size):Individual
Support materials:
  • All printed and handwritten support materials
Duration:1 Hour(s)
Comment:Final quiz, open-book, counts 50% of the total grade
Exam code:MBA 24251
Grading scale:China
Resit:All components must, as a main rule, be retaken during next scheduled course
Type of Assessment: 
Continuous assessment
Grading scale: 
ECTS
Total weight: 
100