Corporate financial analysis (konwersatorium) - 2018/2019

Course description
General information
Lecturer:dr Piotr Bolibok
Organising unit:Faculty of Social Sciences - Instytut Ekonomii i Zarządzania
Number of hours (week/semester): 2/30
ECTS code:00000-05-0500KON0000
Language of instruction:English
Course objective
C1 – Acquainting students with the purposes and basic methods of assessment of enterprises’ financial position
C2 – Understanding of informational content and applicability of financial statements for analytic purposes
C3 – Conveying knowledge about the limitations of corporate financial analysis
Prerequisites
W1 – knowledge of issues from the course: Economics of enterprise
W2 – knowledge of issues from the course: Analytical technologies in the work of an economist
W3 – analytical skills
W4 – openness to gaining knowledge
Learning outcomes
KNOWLEDGE (W):
A student explains key analytical ratios serving for assessment of economic and financial position of enterprises (K_W13)
A student knows the informational content of key components of financial statements (K_W10)

ABILITIES (U):
A student calculates and interprets basic ratios serving for assessment of economic and financial position of enterprises (K_U06)
A student is able to identify key trends in financial position of an enterprise and to assess their potential impact on firm’s future performance (K_U02)
A student is able to apply necessary adjustments to the data from financial statements for analytical purposes (K_U02)

SOCIAL COMPETENCIES (ATTITUDES) (K):
A student is aware of the complexity of financial processes occurring within enterprises and the need of constant in-service training in the field of corporate finance (K_K01)
Teaching method
Lecture with multimedia presentation and elements of discussion.
Course content description
1. 1. Introduction to corporate financial analysis (scope, users, sources of data, and methods of financial analysis)
2. Informational content of balance sheet
3. Analysis of balance sheet
4. Informational content of income statement
5. Analysis of income statement
6. Informational content of cash-flow statement
7. Analysis of cash flow statement
8. Static liquidity ratios
9. Dynamic liquidity ratios
10. Activity (efficiency) ratios
11. Solvency ratios
12. Cash conversion period ratios
13. Performance ratios
14. Stock market ratios
15. Limitations of financial analysis
Forms of assessment
The final grade shall be given on the basis of a written test (90%) and activity during classes (10%).

Grade 2:
(W) – A student is unable to explain key analytical ratios serving for assessment of economic and financial position of enterprises and does not know the informational content of key components of financial statements
(U) – A student is unable to calculate nor interpret basic ratios serving for assessment of economic and financial position of enterprises. A student is unable to identify key trends in financial position of an enterprise nor to assess their potential impact on firm’s future performance. A student is unable to apply necessary adjustments to the data from financial statements for analytical purposes.
(K) – A student is not aware of complexity of economic processes occurring within enterprises nor the need of constant in-service training in the field of corporate finance

Grade 3:
(W) – A student explains selected analytical ratios serving for assessment of economic and financial position of enterprises and knows the informational content of some components of financial statements
(U) – A student is able to calculate and interpret selected ratios serving for assessment of economic and financial position of enterprises. A student is able to identify some trends in financial position of an enterprise and to partially assess their potential impact on firm’s future performance. A student is able to apply some necessary adjustments to the data from financial statements for analytical purposes.
(K) – A student is aware, to some extent, of complexity of economic processes occurring within enterprises nor the need of constant in-service training in the field of corporate finance

Grade 4:
(W) – A student explains most analytical ratios serving for assessment of economic and financial position of enterprises and knows the informational content of most components of financial statements
(U) – A student is able to calculate and interpret most ratios serving for assessment of economic and financial position of enterprises. A student is able to identify most trends in financial position of an enterprise and to assess their potential impact on firm’s future performance. A student is able to apply a majority of necessary adjustments to the data from financial statements for analytical purposes.
(K) – A student is aware of complexity of economic processes occurring within enterprises nor the need of constant in-service training in the field of corporate finance

Grade 5:
(W) – A student explains all required analytical ratios serving for assessment of economic and financial position of enterprises and knows the informational content of all required components of financial statements
(U) – A student is able to calculate and interpret all required ratios serving for assessment of economic and financial position of enterprises. A student is able to identify all key trends in financial position of an enterprise and to assess their potential impact on firm’s future performance. A student is able to apply all necessary adjustments to the data from financial statements for analytical purposes.
(K) – A student is highly aware of complexity of economic processes occurring within enterprises nor the need of constant in-service training in the field of corporate finance.
Required reading list
Main textbooks:
1. A. Lacey, Corporate financial & risk analysis. Assessment of Industrial, Manufacturing, Trading, Service, and Retail Firms, CreateSpace Independent Publishing Platforme, North Charlestone 2016.
2. S. H. Penman., Financial statement analysis and security valuation, 5th ed., McGraw-Hill Education, New York 2012.

Additional readings:
1. C. S. Warren, J. M. Reeve, J. E. Duchac, Corporate financial accounting, 14th ed., Cengage Learning, Boston 2016.
Field of study: Economics
Course listing in the Schedule of Courses:
Year/semester:Year III - Semester 5
Number of ECTS credits: 3
Form of assessment: Grade