Course Title: Financial Analysis and Control

Course Code: FIN-5519

Course Teacher: Protap Kumar Ghosh
Associate Professor
Phone No. 01722-375730
E-mail: protap.ba.2009@ku .ac.bd
Course objectives:
After studying this course, the students will be able to know:
 multiple usages of different financial statements.
 various tools of financial analysis and its usages.
 how to do liquidity, solvency and profitability analysis of the organization.
 bankruptcy measurement and prospective analysis of the organization.
 how to do equity analysis and business valuation.

Lecture Contents Reference

Review of Accounting Theory
User and usages of accounting information Chapter-2
Accounting assumptions and principles Intermediate Accounting by
Lecture-1 Kieso, Weygandt & Warfield
Qualitative characteristics
Financial statements
Constraint in accounting reporting

Understanding Financial Statements

Contents of income statement Chapter-4, 5& 23
Usefulness and limitations of income statement Intermediate Accounting by
Lecture-2 Kieso, Weygandt & Warfield
Contents of balance sheets
Usefulness and limitation of balance sheet
Contents of Cash flow statements
Usefulness and limitations of cash flow statement

Financial Analysis: Chapter-4

Tools of financial analysis Financial statement analysis
Horizontal analysis by
Lecture-3 Leopold A. Bernstein
Illustrating horizontal analysis
Implication and limitation of horizontal analysis

Lecture-4 Financial Analysis: Chapter-4

Vertical analysis Financial statement analysis
Illustrating vertical analysis by
Implication and limitation of vertical analysis Leopold A. Bernstein
Comparison between horizontal and vertical
analysis

Profitability Analysis
Return on invested capital Chapter-8
Adjustment to invested capital and income Financial Statement Analysis
Lecture-5 By
Return on net operating assets
Relation between profit margin and assets turnover Subramanyam and Wild
Return of equity
Disaggregating return of common equity

Lecture-6 Mid-term Examination

Liquidity Analysis:
Liquidity and working capital Chapter-10
Operating activity analysis of liquidity Financial Statement Analysis
Lecture-7 By
Current ratio, cash-based ration , Acid-test ratio
Cash flow measures Subramanyam and Wild
Financial flexibility
What-if analysis
 Capital Structure and Solvency Analysis:
Lecture -8 Basis of solvency Chapter-10
Adjustment for capital structure analysis Financial Statement Analysis
Capital structure measures of solvency By
Asset-based measures of solvency Subramanyam and Wild
Earning coverage measurement
Bankruptcy prediction

Equity analysis and valuation:

Earning persistence Chapter-11
Recasting and adjusting earnings Financial Statement Analysis
Lecture-9 By
Earning based equity valuation
Stock price and accounting data Subramanyam and Wild
Earning power and forecasting

Cash Flow Based Analysis & valuation: Chapter-7

Interpreting cash flows Financial Statement Analysis
Limitation of cash flow reporting By
Lecture-10 Subramanyam and Wild
Free cash flow
Free cash-flow valuation for stock value
Cash flow adequacy ratio Chapter- 23
Cash reinvestment ratio Intermediate Accounting by
Kieso, Weygandt & Warfield

Prospective Analysis:
Lecture-11 Projecting financial statements
Application of prospective analysis
Trends in value drivers
Lecture-12
Comprehensive Analysis of Financial Chapter-23
Statements (overall)
Chapter-9
Financial Statement Analysis
By
Subramanyam and Wild
Financial statement analysis
by
Leopold A. Bernstein

Reference Books

1. Financial Statements Analysis by K.R. Subramanyam & John J. Wild, 10th edition.
2. Financial Statement Analysis by Leopold A. Bernsteion, 5th edition.
3. Intermediate Accounting by Kieso, Weygandt & Warfield, 14th edition.

Marks Distribution
Particulars Marks
Attendance 10
Continuous Assessment
Three class tests will be taken (10 marks each) 30
Best two will be considered
Mid-Term Examination 20
Final Term 40
Total 100

Class Test Schedule (best two will be converted into 30)

Day Time Contents Marks
Lecture-4 7:10 pm Lecture-1&2 10
Lecture-9 7:10 pm Lecture-7&8 10
Lecture-11 7:10 pm Lecture- 9&10 10