GRA 6212 Financial Reporting and Analysis
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APPLIES TO ACADEMIC YEAR 2016/2017 |
GRA 6212 Financial Reporting and Analysis
Responsible for the course
Hans Robert Schwencke, Sverre Dyrnes
Department
Department of Accounting - Auditing and Business Analytics
Term
According to study plan
ECTS Credits
6
Language of instruction
English
Introduction
Financial statement analysis has proven to be useful in a wide range of business decisions. Equity analysts use it as a foundation for their projections of the earnings potential of a company. Credit analysts use it as a tool to analyse operating and financial risks and to determine whether loans should be granted or extended.
The annual report is the primary document in financial statement analysis. This course adopts a user’s perspective in reviewing accounting practices, procedures and disclosure requirements. We will not discuss the mechanics that the companies go through in preparing the information included in annual reports. Instead, we will examine where to find the information and what it indicates about the structure, strategy and performance of the company.
This course does not address the theory of, nor the quantitative techniques used in valuing securities. This is the main objective in course GRA 6210 Business Analysis and Valuation Using Financial Statements. Instead, the course demonstrates how financial information can be used to evaluate a company’s past performance and present circumstances to be able to contemplate what might transpire in the future. At that point, the mission of financial statement analysis is accomplished.
Learning outcome
The objective of this course is to enable you to comprehend and critically evaluate the financial information included in corporate annual reports. In this course you will learn financial statement analysis from the point of view of the primary and everyday users of financial statements: company managers, lenders and stock analysts.
Prerequisites
All courses in the Masters programme will assume that students have fulfilled the admission requirements for the programme. In addition, courses in second, third and/or fourth semester can have spesific prerequisites and will assume that students have followed normal study progression. For double degree and exchange students, please note that equivalent courses are accepted.
Compulsory reading
Books:
Stephen Penman. 2013. Financial Statement Analysis and Security Valuation. 5. McGraw-Hill. 2, 8-13, 15-18, 20
Other:
For this course there may be hand-outs, articles or other types of relevant material
Recommended reading
Books:
Guenther, David A. 2005. Financial reporting and analysis. McGraw-Hill/Irwin
Petersen, Christian V. and Thomas Plenborg. 2012. Financial statement analysis : valuation, credit analysis, executive compensation. Financial Times Prentice Hall
Stickney, Clyde P., Paul R. Brown, James M. Wahlen. 2007. Financial reporting, financial statement analysis, and valuation : a statetegic perspective. 6th ed. Thomson South Western
White, Gerald I., Ashwinpaul C. Sondhi, Dov Fried. 2003. The analysis and use of financial statements. 3rd ed. Wiley
Course outline
- Financial Statement Ananlysis: An Introduction
- Financial Statements and the Annual Report
- Understanding the Income Statement, the Balance Sheet and the Cash Flow Statement
- Reformulation of the Balance Sheet, the Income Statement and the Cash Flow Statement
- Financial Statement Analysis
- Forecasting
- Accounting Flexibility and Accounting Quality Analysis
Computer-based tools
Learning process and workload
A course of 6 ECTS credits corresponds to a workload of 160-180 hours.
There will be a mixture of lectures and case presentations/discussions. At the start of the course the students will be allocated to teams consisting of 3-5 students. During the course the teams will be required to work with and to present case solutions.
For all students to obtain maximum benefit from this class it is essential that each student participates. Please check It's learning before the start of the course to get the schedule. The course starts immediately at the beginning of the semester.
Please note that it is the student’s own responsibility to obtain any information provided in class that is not included on the course homepage/It's learning or text book.
Examination
Your course grade will be based on the following activities and weights:
30 % Assignment (mid-term paper) - group of max. 3 students
70 % Final 3-hour written examination - individual
| Form of assessment | Weight | Group size |
| Assignment | 30% | Group of max 3 students |
| Written examination 3 hours | 70% | Individual |
Specific information regarding student assessment will be provided in class. This information may be relevant to requirements for term papers or other hand-ins, and/or where class participation can be one of several components of the overall assessment. This is a course with continuous assessment (several exam components) and one final exam code. Each exam component is graded using points on a scale from 0-100. The final grade for the course is based on the aggregated mark of the course components. Each component is weighted as detailed in the course description. Students who fail to participate in one/some/all exam components will get a lower grade or may fail the course. You will find detailed information about the points system and the mapping scale in the student portal @bi. Candidates may be called in for an oral hearing as a verification/control of written assignments.
Examination code(s)
GRA 62125 - Assignment (mid-term paper) accounts for 30 % of the final grade.
GRA 62126 - Written 3-hour examination accounts for 70 % of the final grade.
Both evaluations must be passed in order to get a grade in the course.
Examination support materials
BI approved exam calculator
Bilingual dictionary
Permitted examination support materials for written examinations are detailed under examination information in the student portal @bi. The section on support materials and the use of calculators and dictionaries should be paid special attention to.
Re-sit examination
It is only possible to retake an examination when the course is next taught. The assessment in some courses is based on more than one exam code. Where this is the case, you may retake only the assessed components of one of these exam codes. All retaken examinations will incur an additional fee. Please note that you need to retake the latest version of the course with updated course literature and assessment. Please make sure that you have familiarised yourself with the latest course description.
Additional information
Honour code. Academic honesty and trust are important to all of us as individuals, and are values that are integral to BI's honour code system. Students are responsible for familiarising themselves with the honour code system, to which the faculty is deeply committed. Any violation of the honour code will be dealt with in accordance with BI’s procedures for academic misconduct. Issues of academic integrity are taken seriously by everyone associated with the programmes at BI and are at the heart of the honour code. If you have any questions about your responsibilities under the honour code, please ask. The learning platform itslearning is used in the teaching of all courses at BI. All students are expected to make use of itslearning.