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COURSE SYNOPSIS

This course emphasizes on the use of firms financial information and


financial concepts needed to analyze and foster the decision making
process from economic aspects.
PRE-REQUISITE:

ATW111 - Financial Accounting


ATW261 - Principles of Finance
School of Management
SEMESTER 1, ACADEMIC SESSION 2016/2017

COURSE OBJECTIVES

Bachelor of Management

The objectives of the course are:

COURSE OUTLINE

1. To make students learn technical aspects in financial statement


analysis.
2. To develop analytical skills, critical thinking, problem solving while
doing the financial ratios analysis.
3. To expose students on how to integrate the credit analysis on liquidity,
capital structure and solvency.
4. To explain to students on the importance of forecasting, valuation and
business strategy analysis.

AFW 364/3: ANALYSIS OF FINANCIAL


STATEMENT

Dr. Haslindar Ibrahim


Room:119 Ext. 3379
E-mail: haslindar@usm.my
Day/Time: Friday/ 10:00-12:00 p.m
Venue: DK Q

LEARNING OUTCOMES
At the end of the course, students will be able to:

1.
2.

Consultation Hour:

3.

Identify technical aspects and the importance of financial statement


analysis for companies and investors.
Use technical skills, critical thinking, problem solving based on the
analysis of financial ratios.
Determine the integration of the credit analysis on liquidity, capital
structure and solvency.

4.

Explain and show the the importance of forecasting, valuation and


business strategy analysis on the firm value..
Assessment

Course
Learning
Objectives Outcomes

Levels of
Learning

Tutorial/assignment
(Individual)
Group Assignment
Mid-Semester Exam
Final Exam

1, 2

1, 2

K, C, AP

1, 2, 3, 4
1, 2, 3
1, 2, 3, 4

1, 2, 3, 4
1, 2, 4
1, 2, 3, 4

K, AP, AN, S, E
K, C, AP, AN, S, E
K, C, AP, AN, S, E

3. Analysis of Companys Financial Statements


(Group work)
4. Final Examination
Total

20%
50%
100%

Levels of Learning:
Knowledge (K)
Comprehension (C)
Application (AP)
Analysis (AN)
Synthesis (S)
Evaluation (E)

STUDENT LEARNING TIME (SLT)

SLT
Face to face
Activities

Descriptions
Lecture
Tutorial

Self-Learning
Activities

Formal Assessment

Independent Learning
Revision
Assessment Preparation
Continuous Assessment
(Mid-term)
Final Exam
TOTAL SLT

DESCRIPTION OF ASSESSMENT:

Hours
28
28

Coursework (40%) :
The coursework portion (50%) for this course is divided into three
components as follows:

28
14
16
4

Quizzes(10%):
FOUR quizzes will be given during the lecture. There will be NO makeup quizzes

2
120

Group Assignment (20%):


Students are required to perform financial analysis and prepare valuation
method to evaluate the performance of three listed company in the same
industry approved by the instructor.

ASSESSMENT
There are four components to be included in the calculation of final grade.
Maximum percentage for the components are as follows:
Course Evaluation
1. Attendance and Quizzes
2. Mid Term I & II

Mid-semester test (20%):

Percentage
10%
20%

Students will be tested on their knowledge and understanding of the


concepts of finance. There TWO mid-semester test will be given and it is
2

usually conducted one before semester break and the other one before end
of the semester.

13 (2/12)
14 & 15 (9/12 &
16/12)

Final exam (50%) :


The final exam is a 2-hour exam paper consisting of qualitative and
quantitative questions, in the form of structured questions, and essay
questions.

Lecture
Tutorials
Presentation
Library/Internet Search

3 (23/9)
4 (30/9)
5 (7/10)
6 (14/10)
7 (21/10)
8
9 (4/11)
10 (11/11)
11 (18/11)
12 (25/11)

TOPIC(S)
Overview of Financial Statement Analysis
Financial Reporting & Analysis
PUBLIC HOLIDAY
Analyzing Financing Activities
Analyzing Investing Activities
Analyzing Investing Activities:
Intercorporate Investments
Analyzing Operating Activities:
Cash Flow Analysis
Midterm Exam I
Midterm Break
Return on Invested Capital and
Profitability Analysis
Prospective Analysis
Credit Analysis: Liquidity, Capital
Structure and Solvency
Equity Analysis and Valuation

Financial Statement Analysis by K. R. Subramanyam, 11th Edition,


McGraw Hill, 2014

OTHER REFERENCES:

LECTURE
1 (9/9)
2 (16/9)

Comprehensive Case (Revision)

MAIN TEXT:

DESCRIPTION OF TEACHING-LEARNING METHODS:

Midterm Exam II

CHAPTER
1
2

3
4
5

Understanding Financial Statement by Lyn M. Fraser & Aileen


Ormiston, 11th Edition, Pearson, 2016.
Financial Statement Analysis and Security Valuation by Stephen H.
Penman, 5th Edition, McGraw Hill, 2013.
Financial Reporting & Analysis by Charles H. Gibson, 13th Edition,
South-Western, Cengage Learning, 2013.

GROUP PROJECT
You are required to choose one public listed company from Bursa Malaysia
and 2 other competitors and analyze the financial statements of that
company and other relevant information for the last recent three (3) fiscal
years that you can obtain and then suggest the investment decision. Your
analysis should cover but not limit to the following information:

6
7

i.
ii.
iii.

9
10

iv.

11
3

Investment Decision (Executive Summary);


Description of companys background and SWOT analysis;
Analysis of company competitive position in its industry (Financial
ratios);
A brief discussion on any accounting issue that you identify and its
impact on comparative characteristics;

v.

vi.
vii.

viii.

ix.

The financial health of the company:


a. Forecasted pro-forma income statement
b. Forecasted pro-forma balance sheet
c. Forecasted pro-forma cash flow statement
d. Main risk associated with the accuracy of the above
forecasts.
Equity valuation using either discounted cash flow method or nonnormal discounted valuation method.
Companys equity valuation based on either price multiple or
liquidity valuation, and state a few reasons for the difference(s) in
the valuation obtained from (vi) and (vii) above
All of the main assumptions you use, and why do you believe that
assumptions are warranted, and please state, if there is any,
obstacle or limitation for each valuation approach you use.
Provide the suggestions/recommendation and conclusion of your
report.

You should submit your written report to your lecturer during lecture on
the 12th week.
ADDITIONAL INFORMATION:
1)

You can download Company Annual Reports from


www.bursamalaysia.com

2)

Datastream (Postgraduate office & Library)


one person at one time

5)

Tutorial Class will start on the 3rd week of class

STUDENTS RESPONSIBILITIES

Your results of analysis and investment suggestion should be presented in


the form of a written report.

Students are required to attend classes and tutorials at the


registered slots.

Group: All students are required to form a group consists of at least four
(4) members but does not exceed five (5) members.

Students must read the relevant chapter/s that is/are listed in


the course outline prior to attending class.

Company selection: Each group should choose and analyze a company


that is different from other groups.

Students must show satisfactory attendance in lectures and


tutorials. Those who fail to meet the minimum attendance
requirements will be barred from sitting the final examination

Grading Scheme: This group project contribute 20% of your final grade.
Grade for this project will be divided as follows: content (75%), written
report (25%).

Written report: The report must be typed with margin 1 inch, doublespaced, font size 12, and a total of 15 to 20 pages.

PLAGIARISM
Kindly take note that USM and the School of Management will
not tolerate any form of plagiarism by undergraduate students
in their term papers, projects, dissertation, or examination. The
in their term papers, projects, dissertation, or examination.
The American Psychological Association (APA) defines
Plagiarism as representing American Psychological Association

(APA) defines Plagiarism as representing portions of anothers


work or data as [your] own, even if the other work or data
source
is
cited
occasionally
(http://www.apa.org/ethics/code2002.htm1#8_11).

Students may be guilty of plagiarism if they use someone elses


work as their own without citing the source in their work
(report, term paper, dissertation, etc.). This includes direct
copying,
rephrasing, summarizing, taking someone elses idea and
putting it in different words, or directly quoting passages or
ideas but citing the work as a general source.

Please refer to the APA Publication Manual (2001) as a guide in


citing and referencing other peoples work to avoid being
accused of plagiarism.

The penalty for plagiarism is an F for the course, RM200 fine,


and if found guilty by the University Disciplinary Committee, is
ground for suspension and academic dismis.

SELAMAT MAJU JAYA