25743 Corporate Financial Analysis
UTS: Business: Finance and EconomicsCredit points: 6 cp
Subject level: Postgraduate
Result Type: Grade and marksRequisite(s): ((22747 Accounting for Managerial Decisions OR 22784 Accounting: Concepts and Applications) AND 25765 Corporate Finance)
These requisites may not apply to students in certain courses.
There are also course requisites for this subject. See access conditions.
Handbook description
This subject develops students' abilities to conduct corporate financial analysis both for lending and investment purposes. Students are able to reconstruct cash flow statements from other financial statements, analyse reasons for corporate failure and project financial statements.
Subject objectives/outcomes
On successful completion of this subject, students should be able to:
- comprehend the latest developments in corporate financial analysis and develop skills necessary to assess a variety of financial information for lending and investment purposes
- analyse reasons for corporate failure, using topical case studies
- understand the necessity to reconstruct cash flow statements from other financial statements in order to assess cash solvency, cash inadequacy and hence the proficiency of the company's ability to manage liquidity
- understand that many of the traditional tools of corporate financial statement analysis fail to reveal the true condition of the company due to the fundamental nature of accounting
- analyse which ratios and techniques of analysis to use, as well as the limitations of fundamental analysis from a statistical and theoretical viewpoint
- apply techniques to project cash flows for use in valuation methodologies.
Contribution to graduate profile
To develop students' abilities to conduct corporate financial analysis both for lending and investment purposes. Students will be able to reconstruct cash flow statements from other financial statements, analyse reasons for corporate failure and which financial factors are crucial. Students will also be able to project cash flows for use in valuation methodologies.
Teaching and learning strategies
The subject will be taught using a combination of lectures and workshops. These classes will be supplemented with both printed and electronic learning materials and resources. The UTS web-based communication tool (UTSOnline) will be used to share information and encourage interaction between staff and students. Students will also use appropriate computer software such as spreadsheets and word processors to complete assigned tasks.
Content
- Analysis of financial statements and information
- Cross sectional and time series analysis of financial information, leading to the development of ratio analysis
- Foundations of liquidity analysis — analysis of the operating cash cycle, economic fundamentals for analysis of liquidity, cash flow analysis, liquidity indicators, analysis of the management of liquidity statements
- Use of financial information in solvency analysis, leading to rating and distress prediction methods
- Forecasting and valuation using financial statement information.
Assessment
Assessment item 1: Minor case studies (Individual)
| Objective(s): | 2, 3 and 5 |
| Weighting: | 20% |
| Task: | The assignment is designed to assess students' understanding of the theories and concepts to demonstrate that students have met objectives 2, 3 and 5. |
Assessment item 2: Major case study (Group)
| Objective(s): | 2, 3 and 5 |
| Weighting: | 20% |
| Task: | The assignment is designed to assess students' understanding of the theories and concepts to demonstrate that students have met objectives 2, 3 and 5. |
Assessment item 3: Final Exam (Individual)
| Objective(s): | 1-6 |
| Weighting: | 60% |
| Task: | This exam, consisting of multiple choice and short answer questions, will test students' understanding of the theory and their ability to apply the theory to financial management decisions. |
Required text(s)
Michayluk, D, Corporate Financial Analysis, UTS Custom Publication, Thomson, 2009
