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INDIAN INSTITUTE OF MANAGEMENT, NAGPUR

PGP 2017-2019 (Term 5)


FINANCIAL STATEMENT ANALYSIS
Credits: 3; Hours: 30
Instructor: MV Shivaani
Course description:
The ability to analyse financial statements is a skill that is essential across fields like,
investment banking, commercial lending, corporate finance, and valuation. The information
contained in financial statements is pertinent not only to finance managers but creditors,
investors, consultants, auditors, directors, regulators and employees. Accordingly, this course
provides an opportunity for participants to develop the analytical framework required to
analyse and interpret information contained in annual reports.
On completion of this course, participants will be able to:
 Analyse and interpret the information that firms report in financial statements to assess
profitability, risk, growth and credit standing.
 Assess the quality of reported earnings.
 Analyse the impact of certain accounting choices and estimates made by the managers
on financial number and ratios.
 Identify warning signs/red flags and other sensitive areas in reporting such as earnings
management.
 Conduct financial analysis using current annual reports of listed companies.
Pedagogy:
This course builds on the material in Financial Reporting & Analysis (FRA) course offered in
Term 1. While the FRA course provided a basic understanding of financial statements and
calculation of accounting ratios, this course will equip students with the skills and concepts
required to analyse, interpret and project financial statements.
The methodology consists of critical discussion on cases, review of conceptual articles chapters
from textbook and analysis of current annual reports of listed companies.
Text Book:
K.R. Subramanian,John Wild, Financial Statement Analysis, (Tata McGraw-Hill) (10th
edition).
Reference Books:
(1) Robert N Anthony, David F Hawkins and Kenneth A Merchant Accounting: Text and Cases
(12th Edition)

Evaluation:
 Class preparation and participation 15%
 Group project 25%
 Quizzes 20%
 End term exam 40%

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