Consolidated Financial Reporting and Analysis

Consolidated Financial Reporting and Analysis

Term 5 – PGP (open to PGPEM)

                          Faculty: Ana Marques

• Overview

The course is designed to provide an understanding of financial reporting and give students the ability to (i) interpret and analyze companies’ consolidated financial statements, (ii) understand why firms report certain information, and (iii) be sophisticated users of financial accounting information. Such knowledge is valuable for future analysts, consultants, auditors, etc. We will follow IFRS (International Financial Reporting Standards) and mention the differences between these and US GAAP when relevant to our study.  

• Course materials

There are two textbooks used in class:

• “Financial Accounting and Reporting”, by Elliott and Elliott – 16th edition, Prentice Hall (E&E)
• “Financial Statement Analysis and Security Valuation”, by Penman – 5th edition, McGraw Hill (P)

Each week is dedicated to one topic. The slides for class are based on the books, but will also include other information, such as news articles, reports, and findings from previous research. Some exercises will also be included on the slides, so bring a calculator to class. If you can’t attend a lecture, please get the slides, read the assignments and don’t fall behind.

• Evaluation of students’ performance

Grades will be determined using the following factors and relative weights:

Final exam:             50%

Group project:         20%

Homework:             20%

Case studies:          10%

The final exam is closed book, mandatory and comprehensive. It will include a section of short questions (true/false and multiple choice questions), some questions about the materials discussed in class and one exercise. Students are not allowed to consult any materials. You will fail this class if you do not obtain a grade of at least 9 (out of 20) on it. This exam will take 1 hour and 30 minutes.

Group project: students will, during the first week of class, form groups of 4 or 5 students and choose one firm out of a list (see appendix). There will be no repetitions – 1st come, 1st served. Groups will be formed in the first class. I will ask students to collect and analyze financial information from their firm and compare it with its peers.^[1] This will imply handing in a 3 to 4-page report frequently. All groups will present in class once during the course, for 15 minutes. In order to avoid free riding at the end of the course each student will evaluate the work of his/her group colleagues. Based on this the individual grades can vary up to 2 points (out of 20), either up or down.