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25743 Corporate Financial Analysis

Warning: The information on this page is indicative. The subject outline for a particular semester, location and mode of offering is the authoritative source of all information about the subject for that offering. Required texts, recommended texts and references in particular are likely to change. Students will be provided with a subject outline once they enrol in the subject.

UTS: Business: Finance
Credit points: 6 cp

Subject level:

Postgraduate

Result type: Grade and marks

Requisite(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 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 perform industry analysis, identify participants' motivations and accounting deficiencies, forecast financial statements and value companies.

Subject objectives/outcomes

Upon successful completion of this subject students should be able to:

  1. apply the latest developments in corporate financial analysis including management and industry analysis to develop skills necessary to assess a variety of financial information for lending and investment purposes and for predicting corporate failure
  2. use accounting information including reconstructed cash flow statements from other financial statements to assess the proficiency of the company's ability to manage liquidity as well as identify the company’s prospects in the corporate life cycle
  3. question the true condition of the company as reported from accounting numbers and identify the motivations of players as well as how to adjust accounts to address financial analysts’ concerns
  4. examine appropriate ratios and techniques of analysis to use, and execute these procedures while also noting their limitations
  5. execute different valuation methodologies.

This subject also contributes specifically to the following Program Learning Objectives:

  • be able to access and critically analyse relevant information for business decisions (PLO1.1)
  • generate integrated solutions in decision making (PLO2.2)
  • be able to convey information clearly and fluently, in high quality written form appropriate for their audience (PLO3.1)
  • appreciate the importance of sustainable development (PLO4.2)
  • apply technical skills necessary for professional practice (PLO5.1).

Contribution to course aims and graduate attributes

This subject develops the students' abilities to conduct corporate financial analysis both for lending and investment purposes. Students use a top down approach and management tools to examine the industry-wide profitability potential and the company strategy. Accounting information is used to analyse company performance while noting accounting deficiencies and identifying corrective action. Students will also be able to forecast future values and use several different methods to value a company.

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

1. Analysis of financial statements and information
2. Cross sectional and time series analysis of financial information, leading to the development of ratio analysis
3. 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
4. Use of financial information in solvency analysis, leading to rating and distress prediction methods
5. Forecasting and valuation using financial statement information

Assessment

Assessment Item 1: Assignment (Group)

Objective(s):

This addresses Subject Learning Objectives 1, 2, 3, 4 and 5
Weighting: 10

Assessment Item 2: Assignment (Group)

Objective(s):

This addresses Subject Learning Objectives 1, 2, 3, 4 and 5
Weighting: 20

Assessment Item 3: Final Exam (Individual)

Objective(s):

This addresses Subject Learning Objectives 1, 2, 3, 4 and 5
This addresses Program Learning Objective/s: PLO 1.1, 2.2, 3.1, 4.2, 5.1
Weighting: 70

Minimum requirements

Students must achieve at least 50% of the subject’s total marks.

Required texts

All textbook material will be provided on UTS online in pdf format.

Other resources

Lecture Overheads
Lecture overheads will be available on UTS online in a variety for formats.

Other References
• Faculty of Business (2010), Guide to Writing Assignments (available through UTSOnline
or at http://www.business.uts.edu.au/resources/guide.html)