2019 Financial Statement Analysis and Valuation

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Academic unit or major
Graduate major in Industrial Engineering and Economics
Instructor(s)
Nagata Kyoko 
Course component(s)
Lecture
Day/Period(Room No.)
Mon7-8(西9号館, 414号室)  Thr7-8(西9号館, 414号室)  
Group
-
Course number
IEE.D432
Credits
2
Academic year
2019
Offered quarter
1Q
Syllabus updated
2019/5/10
Lecture notes updated
-
Language used
English
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Course description and aims

Financial statements are a critical source of the information about a company, and financial literacy is one of the essential abilities for any person in business world and capital market participants. To develop financial literacy, this course begins with the basics of financial statement analysis and valuation, and then goes further to in depth corporate analysis by assessing quality of financial information and an environment in which various decisions are made. Throughout the course, students study each subject in a practical setting using real-world financial reports and events. “Learning by doing” in the class will help students improve ability to understand and analyze the issues that corporate managers face when they make decisions, assess quality of financial information, and detect earnings management.
The objective of this course is to help students become sophisticated users of financial statement information. This course aims to develop students' understandings of the environment in which management choices are made, what the options are, how financial information is used for various types of decisions, and how to avoid misusing financial information.

Student learning outcomes

Students will have better understandings of the following issues:
- Financial statement analysis
- Valuation using financial metrics
- Incentives and conditions for earnings management
- Techniques and tools used in earnings management
- How corporate governance affects management decisions

Keywords

Financial statements
Earnings management
Corporate governance
Capital market
Valuation

Competencies that will be developed

Intercultural skills Communication skills Specialist skills Critical thinking skills Practical and/or problem-solving skills
-

Class flow

This course will use a variety of methods including lectures, readings, case assignments, and discussions, with special focus on group works. Study teams of two to three students will be formed to discuss various topics in lectures and complete team assignments including presentations.

Course schedule/Required learning

  Course schedule Required learning
Class 1 Overview Understand of the aim of this course Forming students' team
Class 2 What financial statements can tell us Understand the role of balance sheet and income statement
Class 3 Introduction of the target company Making short presentation of your target company
Class 4 How and when actions & events affect the number Understand the basic process of preparing financial statements
Class 5 Financial statement analysis 1 Understand basic financial ratios
Class 6 Financial statement analysis 2 Understand bacic financial ratios
Class 7 Valuation using fundamental analysis 1 Understand basic valuation methodology
Class 8 Valuation using fundamental analysis 2 Understand basic valuation methodology
Class 9 Preliminary investment decisions Making short presentation of the preliminary investment decision
Class 10 Incentives and conditions for earnings management Understand incentive for managers to manage earnings.
Class 11 Tools and techniques of earnings management Understand how managers manage earnings.
Class 12 Environment for earnings management Understand environment of managers including governance structure
Class 13 Final investment decision 1 Make final presentation and discussions.
Class 14 Final investment decision 2 Make final presentation and discussions.
Class 15 Wrap up Give and receive feedback.

Textbook(s)

Handout will be available at every session.

Reference books, course materials, etc.

Chuck Kremer, Ron Rizzuto, John Case, Managing by the numbers : A Commonsense Guide To Understanding And Using Your Company's Financials, Basic Books, (2000/5/15)

Assessment criteria and methods

Course grade will reflect the following emphases:
- Homework/class assignments (60%)
- Class participation (40%)

Related courses

  • TBD

Prerequisites (i.e., required knowledge, skills, courses, etc.)

Interests in the course subject.

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