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Financial Statement Analysis

UNIVERSITY OF TEXAS AT DALLAS


Course Syllabus
Fall 2005
Instructor: Mark Salamasick, CIA, CISA, CSP
Course Number: AIM 4336
Semester Hours: 3
Location: SOM 2.717
Time: Thursday, 4:00-6:45 p.m.
Office Phone: (972) 883-4729
Email Address: Mark.Salamasick@utdallas.edu
Homepage URL: www.utdallas.edu/~msalam
EIAP Website : som.utdallas.edu/eiap
Office Hours: Most Wednesdays and Thursdays, but call ahead
Also, by Appointment

Course Overview:
The course will cover financial statement from a user’s perspective. Broad concepts will be covered
related to financial statements with application of different industries, companies, including a comparative
analysis of various industries. This course is designed to take the students beyond the routine filling of
boxes with standard financial ratios, calculated according to precise and inflexible definitions. The
course emphasizes the application of the concepts to real life situations.

The main goal is to provide students with a broad, practical perspective to work on financial statement
analysis to determine:

1. A reasonable assessment of the financial condition of the firm


2. What may be reasonable forecasts of its future position
3. Whether the firm is worthy of credit
4. The operation characteristics of the firm

Prerequisites:
Pre-requisite: AIM -2301
Pre-requisite: AIM -2302

Required Materials:
• Financial Reporting & Analysis, 9th Edition, Charles Gibson, 2004, South-Western Publishing.
Financial Statement Analysis 2

Course Objectives:
The purpose of this course is to give the student an in-depth exposure to various financial statements used in
business activities-- specifically to evaluate how statements and their construction vary from firm-to-firm within
various legal and institutional requirements. Additionally, a perspective of the following will be explored:

• The differing perspectives of various parties examining & preparing financial statement data

• Reporting requirements of government and accounting professional agencies

• Differing composition of financial statements in differing industries

• The effect of computer software & internet access on computing and evaluating financial ratios &
industry data

Homework:
Homework that is suggested will be posted on webct. Homework will not be turned in from the
suggested questions and is at the discretion of the student. However, there may be some additional
handout problems to work and turn in throughout the semester. If you have questions on the suggested
homework bring them to class for discussion with the group.

Communication:
We will make use of WebCT for posting assignments and projects. Also, you can take advantage of the
discussion features of webct to discuss issues with other students. My use of webCT for discussion will
be somewhat limited to one time per week so please ask questions during class and don’t use webCT
for discussion of class topics. Send all email related class to webCT email not to my UTD email address,
I usually check webCT email once a day.

Case Studies and Discussion:


The textbook has extensive problems, case studies, to the net exercises, and a Web Case at the end of
each Chapter. Make sure you are doing the correct problems, case studies and questions as each
chapter will have different problems assigned from each area. You will be assigned problems and case
studies which may later be selected for review and discussion in class.

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Financial Statement Analysis 3

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Financial Statement Analysis 4

Individual Class Project:

Each student will chose a company to do a comprehensive financial analysis. The company should be
publically listed with as much information available as possible. It is important that you be able to present
information very consisely after your extensive research. Each of you will present your summary to the
class beginning during class period 7. To make this of most value to you I suggest this be a company that
you would like to work at, invest in, parents work at, or you would like to know more about. Selection of
the companies will be based on a lottery which numbers will be drawn on August 18. Each student will
select a different company which will be decided at the second class period on August 25. If for some
reason you will not be at class you need to have another student select for you or you will need to select at
the following class. If you do not do the presentation you will receive a zero on the project. All students
will be evaluating all the presentations and it is key that you not miss classes since these evaluations will
count as part of your participation grade.

Tests:
You will have two tests that will not be comprehensive in nature. The first test will cover the topics from
Chapter 1-7 and the second test will cover Chapters 8, 9, 10, 11, 12 and 13.

Grading:
Your grade will consist of the following:

Percent

Mid Term Test 30%


Final Test 30%
Homework and Class Participation 10%
Comprehensive Individual Project 30%
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Total Points 100%

Academic Dishonesty:
Candidates are expected to be above reproach in scholastic activities. Candidates who engage in scholastic
dishonesty are subject to disciplinary penalties, including the possibility of failure in the course and dismissal from
the University. “Scholastic dishonesty includes, but is not limited to cheating, plagiarism, collusion, the
submission for credit of any work or materials that are attributable in whole or in part to another person,
taking an examination for another person, any act designed to give unfair advantage to a student or the

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attempt to commit such acts.” Since scholastic dishonesty harms the individual, all candidates, and the integrity
of the University, policies on scholastic dishonesty will be strictly enforced.

Class Schedule:
The class schedule is subject to change, based on the needs of the students. Class will be composed of
some lecture, discussion on case study and problems, and discussion on current events. For each student
to get the most of this class it is recommended that you be in tune with events impacting the financial
community. Many events are impacting the corporate environment due to financial reporting issues.
Reading of material such as the Wall Street Journal, Forbes, Barrons, Money Magazine, etc. is strongly
encouraged along watching CNNfn. It is expected that students bring these issues to class for discussion
as appropriate.

Changes to the class and schedule will be discussed as the need arises.

Schedule
Week Date Topic Chapter
1 August 18, 2005 Class Introduction Chapter 1
Introduction to Financial Reporting
2 August 25, 2005 Library Presentation Chapter 2
Introduction to Financial Statements
Individual Project Assignments Discussion
3 September 1, 2005 Balance Sheet and Income Statement Chapter 3 and
Chapter 4
4 September 8, 2005 Basics of Analysis Chapter 5
5 September 15, 2005 Liquidity of Short Term Asset Chapter 6
6 September 22, 2005 Long-Term Debt-Paying Ability Chapter 7

7 September 29, 2005 Review, Case Study and Presentations Begin


8 October 6, 2005 Test #1 Chapters 1-7
9 October 13, 2005 Profitability Chapter 8
10 October 20, 2005 For the Investor Chapter 9
11 October 27, 2005 Statement of Cash Flows Chapter 10
12 November 3, 2005 Expanded Analysis Chapter 11
13 November 10, 2005 Personal Financial Statements Chapter 13
14 November 17, 2005 Review, Industry Discussion Chapter 12
N/A November 24, 2005 Thanksgiving N/A
15 December 1, 2005 Final Exam (Chapters 8, 9, 10, 11, 12, 13)

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(Regents’ Rules and Regulations, Part One, Chapter VI, Section 3, Subsection3.2, Subdivision 3.22
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