FINANCIAL STATEMENT ANALYSIS

Academic Year: 2016/2017 2nd Semester

Instructor(s): Cristina Neto de Carvalho and Sofia Pereira

Course Description:

Financial Statement Analysis introduces students to intermediate financial accounting

issues. Tangible and intangible assets, leases, changes in Shareholders equity, Statement of
Cash flows and Consolidation are the main topics covered. IAS/ IFRS standards are vast and
complex. The course does not aim at covering in detail all the topics. However, in this second
semester, students will be asked to read and interpret some IAS/ IFRS standards. The
identification of the specific and relevant statement to answer a research question is part of the
course objectives.
The course adopts the decision-maker perspective of accounting, emphasizing the relation
between the reported data and the underlying economic events that generated them, providing
prospective users of financial statements with a clear understanding of the accounting
fundamentals as effective financing and investment decision-makers.
A deep financial statement analysis will be required. Students will be asked to prepare a
fundamental analysis of a listed company. The course will end with the final presentation and
discussion of these reports.

Course Objectives:

 Detailed analysis of Tangible, Intangible, Leases and Equity items;

 Determine the impact of different financial reporting alternatives and of management
choices on the recognition and valuation of operations;
 Prepare and interpret Cash-flow statements;
 Understand the relevant concepts for consolidation of accounts;
 Produce a well-structured financial report’s analysis linking the financial statements
examination to company’s strategy and to its investment and financial decisions.
Course Content and scheduling:

WEEK TOPIC READINGS

Week 1 Working Capital Chapter 12. Pages 760-764

Week 2 Property, Plant and Equipment Chapter 7

Week 3 Investment properties. Government Grants

Week 4 Intangible Assets: Concept and Valuation Chapter 7; IAS 38

Week 5 Leasing Chapter 9

Week 6 Statement of Cash Flows Chapter 11

MIDTERM
Shareholders' Equity: additional, stock
Week 7 Chapter 10
issues, dividends, treasury shares
Statement of Changes in SE and ROE Chapter 10
Week 8
analysis and decomposition Chapter 12. Pages 766-772
Week 9 Guest speaker: an investor’s relation
Creative Accounting
Week 10 Consolidation Financial Statements: Chapter 8
purpose and main concepts
Consolidation of Accounts: Purchase
Week 11 Chapter 8
method and Equity method
Week 12 Financial Statement Analysis - Revisions Chapter 12

Grading:

 Mid-Term exam: 30.0%

 Final exam: 40.0% (minimum 9.5)
 Class participation/ Active learning: 15.0%
 Group financial report and oral presentation: 15.0%
  The Final exam will be compulsory for the students who:
 Have a final course grade between 8 and 9.5
 Have an average between the two written exams below 9.5

Bibliography:

NOTE THAT THE TEXT BOOK IS PREPARED UNDER IFRS AND NOT US GAAP
 Financial Accounting – International Financial Reporting Standards. Harrison, Horngren,

Thomas and Suwardy. 9e. Global Edition. Pearson Education.

 MyAccountingLab (a web-based learning software issued by the publisher Pearson)
 Course materials including lecture handouts, class exercises and solution notes are
available for download from Moodle.
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Biography:

Prof. Cristina Neto de Carvalho, holds a PhD in Business Administration (UCP), a MBA in
Business Administration (UNL) and a BA in Economics (UCP). She lecturers Financial Reporting
and Analysis in the Masters and Executive Education Programs. She has previously taught
Corporate Governance, Finance and Performance Management and Control. Her main areas of
academic interest include: risk management, corporate governance and creative financial
reporting. She has published papers in finance refereed journals and academic international
handbooks and her work was presented at leading finance conferences.

Prof. Sofia Pereira holds a BA in Business Administration (UCP). She is the Executive Director of
the Center for Applied Studies in Catolica-Lisbon and is a Teaching Assistant for Finance &
Accounting courses in undergraduates programs and MBAs. She also lectures Finance &
Accounting modules in the Executive Education Programs
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Contact(s) and Office hours:
e-mail: cnc@ucp.pt
Phone: +351.917.25.14.14
Office hours: By appointment
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