Financial Statement Analysis Handout 2015

Topics: Financial statements, Balance sheet, International Financial Reporting Standards Pages: 7 (1463 words) Published: July 7, 2015
IBS Hyderabad
Academic Year: (June 2015 – October 2015)

Course Handout
Course Name: Financial Statements AnalysisSemester: III Faculty Name:

Room No: F-206 Wing No: F Block
Consultation Hours: between
Mobile No: 98494 68134 Email:

Course Objective:
To enable students have an in-depth understanding of analysing Financial Statements including various assets, liabilities, and equity. To enable the student to extend the understanding of analyzing and interpreting financial statements of all types of business entities. To enable students to apply the tools and techniques including ratio analysis to analyze and interpret the financial statements.

Learning Outcomes:
At the end of the course, the student will be able to:
Analyze and interpret the information provided in the financial statements of different business entities. Demonstrate the ability to apply various tools and techniques to analyze financial statements including using of ratios. Demonstrate the ability to use critical thinking, analysis and synthesis for effective decision making

Recommended Text Book:
The Analysis and Use of FINANCIAL STATEMENTS – Gerald. I. White, Ashinpaul. C. Sondhi and Dov Fried - Third Edition - Wiley Publications

Suggested books:
Financial Accounting: Reporting & Analysis - Earl K.Stice & james D. Stice – South Western CENGAGE Learning (Publication) Analysis of Financial Statements - Charles H.Gibson - South Western CENGAGE Learning (Publication) Financial Statement Analysis - John J.Wild, K.R.Subramanyam & Robert F.Halsey - Tata McGraw Hills (Publication

Session No.
Key Concepts
Learning Outcomes
Case Details
Chapter Reading
1 – 2

Overview of Annual Report and overview of Financial statement Analysis Overview of Financial Statements, Annual Report, Contents, Users of Financial Statements, Utility of Financial Statements, etc. Identify and explain information sources in Annual report and how analysts use the information in Financial Statement analysis.

Annual Report of Tata Steels
Chapter 1: Framework for Financial Statement Analysis

Utility of FS in the business analysts and valuation
Revise Financial statement analysis – tools and techniques learnt in earlier semester. HBS Note: Financial Statement Analysis

Financial Reporting and Regulations
Indian AS, IFRS, International Accounting Standards, Functioning of IFRS and various documents that guide the users of financial statements Explain the role of standard setting bodies.
Describe the ongoing barriers to developing one universally accepted set of financial reporting standards The IASB at a Crossroads: The future of International Financial Reporting Standards (B) Chapter 1: Framework for Financial Statement Analysis

Analysis of Cash Flows
Aalysing in detail Cash Flow Statement of the firm
Compare and contrast the case flows from Operating, Financial and Investing Activities Analyze and interpret cash flow statement
Statement of Cash Flows – Three Examples
Chapter 3: Analysis of Cash Flows
Analysis of Inventories
Inventory Pricing methods and valuation of Inventories, impact of change in methods, and utility of info in decision making Describe the rules in measurement of inventory at the lower of cost and net realizable value List the presentation and disclosures requirements

Interpret the ratios to evaluate inventory management.
Merrimack Tractors and Mowers: LIFO or FIFO?
Chapter 6: Analysis of Inventories
6 – 8
Analysis of Fixed Assets
Fair Value of Fixed assets, capitalization vs. expensing and its impact Distinguish between capitalized cost and expensed costs and their impact on Financial Statements. Describe the different depreciation methods, their assumptions on financial statements Describe the different amortization methods of intangibles, impairment of assets, presentation and...
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