Course: Financial analysis Semester:
Course Manager: André Cabannes Code:
Email: andre.cabannes@m4x.org
Course taught by: André Cabannes
Teaching language: English Class hours: 18 Credits:
PRE-REQUISITES
A course in General accounting
COURSE SUMMARY
Analyse a firm, its
performance, its value from its accounting and financial documents.
COURSE
OBJECTIVES
Learn how to read and
interpret accounting and financial documents of a firm over several
years. Evaluate the performance of a firm and its value. Introduction
to financial reasoning and techniques.
SKILLS
ACQUIRED
Read and interpret accounting and financial documents
Establish a cash flow statement
Calculate the value of a firm for various potential buyers
COURSE SCHEDULE
Twelve 1 ½ hour classes + a 1 ½ hour written final examination
|
Lesson 1 |
Balance sheet and income statement |
Review of
construction. |
|
Lesson 2 |
Balance sheet and income statement (cont’d) |
Revenue & capital
accounts. |
|
Lesson 3 |
Balance sheet and income statement (cont’d) |
Exercises. Various concepts: equity, debt, capital employed, free financing, fixed assets, current assets, working capital, liquidity, etc. |
|
Lesson 4 |
Ratios of performance |
Interpretation of liabilities. Profitability ratios: ROCE, others |
|
Lesson 5 |
Ratios of performance (cont’d) |
Liquidity and efficiency ratios |
|
Lesson 6 |
Cash flow statements |
Links between value, cash and credit. Read BKC & Heuliez |
|
Lesson 7 |
Exercises |
Exercises with transactions, IS & BS |
|
Lesson 8 |
Physical investments |
Calculation of future cash flows (the Guano project, source: Brealey & Myers, Corporate finance, textbook). |
|
Lesson 9 |
Discounting |
The rationale for discounting. Opportunity cost of capital. IRR |
|
Lesson 10 |
Discounting |
|
|
Lesson 11 |
General review |
|
|
Lesson 12 |
General review |
TIE-IN WITH THE CORPORATE WORLD
- All concepts are illustrated with examples from the real world and when possible from the current news.
TEACHING METHODOLOGY
Lectures by the teacher and many in class exercises
Reading assignments prior to each lesson
ASSESSMENT
Final exam.
READING MATERIALS
-
Textbooks:
John R. Dyson, Accounting
for non-accounting students, FT
Prentice Hall, 7th
edition, 2007
Marc Levinson, Guide
to Financial Markets, Press of the
Economist, 4th edition 2006
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Websites of the
course:
http://www.lapasserelle.com/courses/corporate_finance/
http://www.lapasserelle.com/economics/marches_financiers/