Financial Statement Analysis
MGT 513
Course Description:
Accounting addresses the measurement, aggregation, and evaluation of economic information useful for decision making. In Financial Statement Analysis, we will focus on a subset of this construct, which is labeled general purpose external financial accounting and reporting.
General purpose statements are those provided to individuals who do not have the authority to compel management to provide the information they desire. These individuals differ from taxing authorities or others who have specialized needs, but also the authority to compel enterprises to furnish the information they desire. Managers, directors, and others may have access to additional internal (and often proprietary) information. Recalling MGT 312, Managerial Accounting, much of the data analyzed in that class was proprietary to the firms profiled in the cases you studied. The techniques we will learn are equally applicable to internal financial analysis but we focus on external financial statements because those documents are in the public domain. Nonetheless, the techniques we will learn are directly applicable to internally produced financial data. In fact, the inclusion of internal (proprietary) data serves to enrich the analyses.
Financial accounting and reporting refers to statements prepared in accordance with Generally Accepted Accounting Principles (GAAP) promulgated by the Financial Accounting Standards Board (FASB). As we discuss at the end of the course, the FASB and the International Accounting Standards Board (IASB) are working toward global convergence of financial accounting standards. The European Union adopted those standards, International Financial Reporting Standards (IFRS), for financial statements prepared on or after January 1, 2005. Given similarities between IFRS and GAAP (a February 2004 PricewaterhouseCoopers study finds US GAAP similar to IFRS on 40 of 79 dimensions examined), many of the topics and concepts we study will become even more widely applicable.
This course provides a broad framework for using financial statements and other SEC required regulatory disclosures in business analyses. Emphasis is placed on developing a critical, general manager's perspective for interpreting required financial disclosures, understanding the types of financial information available in the public domain and their purposes, developing an appreciation of (some of) the inherent ethical conflicts that may color managers' and sell-side analysts' disclosures, and formulating an approach to evaluating an enterprise's overall financial reporting and the implications of that analyses from the perspective of a potential shareholder or creditor. The course objectives are reinforced through the course reading materials, assigned problems, in class problem solving, and class discussions..
A basic understanding of financial accounting, finance, and Excel is assumed. This course is useful for individuals planning careers in investment banking, portfolio management, corporate finance, management consulting, and security analysis.
SPECIAL NOTE: enrollment in MGT411 (prerequisite listed below) concurrently is acceptable
2 Credit(s)
Prerequisite(s):
Faculty:
- Charles Kile, Jr. (View Profile)
Subject Area(s):
- Accounting and Taxation
Program(s):
- MBA
- MS Finance
Please Note: Not all courses are scheduled each semester. Complete class schedules are available upon enrollment.
