BA_FA Financial Analysis

University of Finance and Administration
Summer 2021
Extent and Intensity
2/1/0. 5 credit(s). Type of Completion: zk (examination).
Teacher(s)
Ing. Kateřina Kalinová (seminar tutor)
Guaranteed by
Ing. Kateřina Kalinová
Department of Finance – Departments – University of Finance and Administration
Contact Person: Lenka Pokorná
Prerequisites
There are no prerequisites for this course.
Course Enrolment Limitations
The course is offered to students of any study field.
Course objectives
At the end of the course students will acquire skills in basic methods used in assessment of financial performance of businesses – i.e. in financial analyses. Students will will be able to understand the chosen assessment techniques, ratio indicators and comprehensive methods of financial analysis. They will also learn how to interpret various ratios and how to interpret results of financial analysis. The Financial Analysis course serves as a foundation for follow up courses focused on controlling and financial management.
Learning outcomes
At the end of the course students will be able to
understand and interpret the basic financial statements
identify major functions of the financial analysis including its users
choose the proper financial analysis method
interpret various ratios
evaluate financial performance of the business based on the financial analysis methods
interpret results of financial analysis
formulate recommendations based on financial analysis
Syllabus
  • 1. Main terms of financial analysis (FA); the essence, procedure and the sources of financial analysis information; basic structure of balance sheet, profit & loss statement and cash flow statement; limitations of basic financial reports.
  • 2. Methods of financial analysis and their classification; interpretation of the ascertained FA values; horizontal and vertical analysis; assessment of their explanatory power.
  • 3. Ratio indicators as the cornerstone in FA; their importance and the explanatory power of the individual ratio indicators of FA ; liquidity ratios – current, quick and cash ratio.
  • 4. Solvency ratios - debt and coverage ratios, importance of the financial structure of the company, WACC.
  • 5. Profitability ratios - profit levels, ratios of ROA, ROE, ROS, ROCE and their explanatory power, influence of leverage.
  • 6. Activity ratios – the speed and time period of turnover; indicators of fixed asset coverage; cash conversion cycle and its role in the effective financial management.
  • 7. DuPont breakdown of ROE and ROA, Pyramid Decompositions, and their explanatory power.
  • 8. Capital market ratios - P/E, P/S, P/BV, dividend payout - their role in the investors´ decision making process; industry specific ratios.
  • 9. Cash flow ratios - CFO/revenue CFO/equity, CFO/assets; situations requiring use of CF ratios.
  • 10. MVA and EVA indicators.
  • 11. Comprehensive FA indicators – bankruptcy models – Altman Z-score of 1968 and 1983 known as the ZETA Model.
  • 12. Comparative financial analysis - summary of the semester project, practical example of real life companies.
Literature
    required literature
  • ROBINSON, Thomas R. International financial statement analysis. 2nd ed. Hoboken, N.J.: John Wiley, c2012, xxvii, 1009 p. ISBN 04-709-1663-X.
    recommended literature
  • BIERMAN, Harold a Seymour SMIDT. Financial management for decision making. London: Collier Macmillan, c1986, xix, 842 p. ISBN 00-231-0030-3.
  • HILLMAN, A, Richard F KOCHANEK a Noah P BARSKY. Principles of accounting: a focus on analysis and interpretation. 9th ed. Mason, Ohio: Thomson, c2004, CH 14 - 17. ISBN 0759320462.
  • SCHROEDER, Richard G, Myrtle CLARK a Jack M CATHEY. Financial accounting theory and analysis: text and cases. 10th ed. Hoboken, NJ: Wiley, c2011, xi, 612 p. Beckova edice ekonomie. ISBN 04-706-4628-4.
  • BRIGHAM, Eugene F. Financial management: theory and practice. 13th ed. Mason, OH: South-Western Cengage Learning, c2011, xxxi, 1152 s. ISBN 978-1-4390-7809-9.
Teaching methods
PS: (full time students) 2 hours per week of lectures and 1 hour per week of seminars (2/1); KS: (part time students) 6 seminars (90 min each). Lectures for present studies will be split into theoretical as well as practical part. Theoretical parts will be always explained on practical examples on seminars.
Students in full time study program should attend 75% of seminars as a minimum. Students in part time study program should attend 50% of seminars as a minimum.
Assessment methods
Credit: Active participation at practical lessons (seminars), elaboration of written seminar work and presentation or series of the online quizzes covering the knowledge in the particular topic, will be specified
Examination: Written test (can be online), presentation (can be recorded i.e. online) - will be specified
Language of instruction
English
Further comments (probably available only in Czech)
The course can also be completed outside the examination period.
Information on the extent and intensity of the course: 12 hodin KS/semestr.
The course is also listed under the following terms Summer 2013, Summer 2014, Summer 2015, Summer 2016, Summer 2017, Summer 2018, Summer 2019, Summer 2020.
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