Course Name (short): Financial Statement Analysis
School: Business
Program(s): Bach Bus Admin Market Manage, Bach Business Admin Accounting, Bach Business Admin Finance, Bach Human Resources, BachBus Admin Spply Chain Mgmt
Program Coordinator(s): Tba
Course Leader or Contact: Tba
Originator: Lynn Easson-Irvine
Designate: Jessica MacDougall
Version: 1.01
Status: Approved (APPR)

Calendar Description
Students interpret financial reports, construct measures of financial performance and analyze the reporting choices made by companies. Students analyze the effects of accounting choices on earnings management.

Typical Instructional Format

Courses may be offered in other formats.

Section I Notes: This course will be delivered in hybrid format.

Detailed Description
This course is an elective course in Bachelor of Business Administration (BBA) Accounting program as well as BBA Finance, BBA Human Resources, BBA Marketing and BBA Supply Chain Management. This course focuses on practical application of the accounting knowledge gained in the core financial accounting courses. The core accounting courses focuses on preparing financial statements, while this course focuses on reading and interpreting the financial statements. The outcomes and learning experiences of these course components will contribute to the students' Creative Learning Portfolio. This course is designed to meet the requirements for the professional accounting programs of study.

Program Context

 Critical Performance
By the end of this course, students will have demonstrated the ability
to use financial statement information to identify opportunities and
solve business problems.

Learning Outcomes
To achieve the critical performance, students will have demonstrated
the ability to:
1.  Interpret financial ratios using financial information. 
2.  Identify the key financial ratios that measure value drivers. 
3.  Apply a framework that links value drivers to shareholder value. 
4.  Explain how business strategy and management actions affect key 
    value drivers.
5.  Identify accounting choices, earnings management and off-balance 
    sheet risks/obligations affecting the quality of accounting 
    information.
6.  Analyze business strategy and competitive advantage as inputs to 
    predicting sustainability of growth and profitability. 
7.  Analyze the cash needs of a business.
8.  Assess how economic fundamentals impact accounting choices. 
9.  Explain shareholder value creation by comparing public company   
    data. 
10. Formulate a strategic plan while considering the organization¿s 
    capabilities and environmental context.
11. Apply a systematic approach to evaluating opportunities and 
    challenges facing a business, using various financial analysis 
    techniques.
12. Link financial statement analysis to valuation models.
13. Demonstrate professional behaviours including:
    a. work effectively in a team environment
    b. meet due dates
    c. produce professional quality assignments
    d. use reference materials responsibly

In-class activities (5 @ 2%)	10%
Group Assignment		30%
Midterm Exam 		        30%
Final Exam		        30%
		               100%

In addition to achieving a minimum 50% overall grade, a student must
have a combined average of at least 50% on the non-group components of
the evaluation plan in order to receive credit for this course.

Textbook(s): 
Course pack compiled by professor containing required articles from
multiple sources.

Wahlen, J., Baginski, S., Bradsaw, M., Financial Reporting and
Statement Analysis: A Strategic Perspective, 7th edition, Nelson Education

Recommended Reading:
Subramanyam, K.R., Wild, John J., Financial Statement Analysis, 10th
Edition, McGraw Hill

Gibson, Charles, H., Financial Reporting and Analysis, 11th Edition,
2008. Cengage Learning 2008

Description:

Module 1: Ratio Analysis
- Profitability analysis
- Risk analysis
- Cash flow projections
- Earnings qualify
Learning Outcomes: 1, 2, 5, 9
In-class Activity: 2%

Module 2: Financial Instruments and Derivatives
- Risk Assessment
- Impairment
- Writedowns
Learning Outcomes: 3, 4, 5, 8
In-class Activity: 2%

Module 3: Earnings sustainability
- Forecasting Financial Statements
- Linkage to future cash flow
- Limitations of financial data
Learning Outcomes: 1, 4, 6, 7, 9
In-class Activity: 2%

Midterm Exam: 30%

Module 4:  Company Valuation and Risk Assessment
- Dividends valuation approach
- Cash-flow based approaches
- Earnings-based approaches
- Market-based approaches
Learning Outcomes: 2, 3, 4, 7, 8, 10, 12
In-class Activity: 2%

Module 5: Earnings management
- Detecting earnings management
- Bankruptcy detection
- Off Balance Sheet Activities 
- Deconstructing Enron fraud
Learning Outcomes: 4, 5, 8, 11
In-class Activity: 2%
Group Assignment: 30%

Final Exam: 30%