UNIVERSITI SAINS MALAYSIA

BACHELOR OF MANAGEMENT

Semester 1, Academic Session 2018/2019

Course Outline

AFW364/3
Analysis of Financial Statement
Analisis Penyata Kewangan

Lecturer and Coordinator: Dr. Gary John Rangel

Lecture Time and Location: Friday, 10.00AM – 12.00PM DK ‘I’
Tutorial Time and Location: Tuesday, 10.00AM-11.00AM BT143
Tuesday, 5.00PM-6.00PM BT160
Room: School of Management, Room No. 117
Email: gary.rangel@usm.my
Telephone 04-6535160
Consultation Times: Thursday 9.00AM – 11.00AM

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Course Description:

This course aims to provide students with an understanding of the use of financial
statement information from a user perspective such as equity investor, debtholder,
financial analyst, and manager. The course examines the impact of different accounting
choices on reported earnings, shareholders’ equity, cash flow and various measures of
corporate performance. Students will develop skills in analysing financial statements for
investment, credit, and other business decisions. In view of the considerable similarities
among US Financial Reporting Standards (US GAAP), International Financial Reporting
Standards (IFRS), and Financial Reporting Standards in Malaysia (MFRS) for most of the
topics covered in this course, we focus on MFRS in this course. Main differences between
MFRS and IFRS (and/or US GAAP) will be highlighted where appropriate.

Pre-requisite:

AFW262/4 - Principles of Finance

ATW111/3 - Financial Accounting

Course Objectives

CO1 To understand financial statements (comprising of comprehensive income,

balance sheet, statement of cash flow, statement of changes in equity, and notes
to accounts).

CO2 To analyse the business performance and risk of a company based on its financial
statements.

CO3 To develop students’ soft skills like problem solving, decision making, team work,
communication, inquiry, and analysis

Learning Outcomes

LO1 Identify technical aspects and the importance of financial statement analysis for
companies and investors.

LO2 Use technical skills, critical thinking, problem solving based on the analysis of
financial ratios.

LO3 Determine the integration of the credit analysis on liquidity, capital structure and
solvency.

LO4 Explain and show the importance of forecasting, valuation and business strategy
analysis on the firm value.

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Learning Activities and Teaching Strategies

This course consists of one two-hour lecture and one-hour tutorial per week. Constructive
participations are highly encouraged and expected from students.

Commitment

Prior to the lectures, students are expected to thoroughly prepare by reading all relevant
material which includes the relevant chapters of the textbook and any supplemental
material. By enrolling in this course, all students are signed on the commitment of the
following “4 Ps”.

Preparation – You will read all pre-session material and diligently prepare for the lecture.
Otherwise, there will be limited value you would gain from this course and our face-to-
face time in class. You are encouraged to prepare for the lectures with your peers.

Presence – You will be present “physically” and “mentally”. Not being present would
mean you cannot learn, and more importantly, cannot add to the discussion in the lecture
or tutorial. In order to facilitate this, there will be no use of handphones during lectures or
tutorials. All handphones must be out of sight and on silent mode. If you need to make an
urgent call, please excuse yourself and step out of the lecture or tutorial. If we see any
student using their handphones in the class, we will stop the lecture or tutorial.

With reference to Section 2.3.2 from the Bachelor of Management course

handbook:
Students will be barred from sitting for the final examination if they do not fulfill course
requirements, such as absence from lectures and tutorials of at least 70%, and have not
completed/fulfilled the required components of coursework. A grade “X” would be
awarded for a course for which a student is barred. Student will not be allowed to repeat
the course during the Courses during the Long Vacation (KSCP) period.

I will be taking attendance during lectures and tutorials and will not hesitate to submit
any names to the School of Management for further action as per Section 2.3.2 above.

Promptness – You are to attend class on time. Any tardiness would unnecessarily disrupt
the discussion and depreciate the decorum of the process.

Participation – It is everyone’s responsibility to share his/her understanding and view

with the class in order to advance the group’s skills and knowledge.

The commitment is two-way. I am committed to make the course a satisfying development

experience. I will question and challenge students to ensure the class’s skills and
knowledge is enhanced.

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Student Learning Time (SLT)

SLT Description Hours

Face to face activities • Lecture 28
• Tutorial 12
Self-learning activities • Independent Learning 15
• Revision 20
• Assessment Preparation 25
Formal assessment • Weekly On-line Quiz 15
• Continuous Assessment 3
(Mid-semester test) 2
• Final Exam
TOTAL SLT 120

Assessment Details

ASSESSMENTS PERCENTAGE
1. In-semester test 1 15%
2. In-semester test 2 15%
Weekly On-line quiz 20%
Final Examination 50%
Total 100%

NOTE: THERE WILL BE NO MAKE-UP TEST/EXAMINATION ALLOWED

Assessment Course Objectives Learning Outcomes *Levels of Learning

Tutorial 1, 2 1, 2 K, C, AP
Weekly On-line quiz 1, 2, 3, 4 1, 2, 3, 4 K, C, AP, AN, S, E
Mid-semester test 1, 2, 3 1, 2, 4 K, C, AP, AN, S, E
Final Examination 1, 2, 3, 4 1, 2, 3, 4 K, C, AP, AN, S, E

* Levels of Learning:

• Knowledge (K)
• Comprehension (C)
• Application (AP)
• Analysis (AN)
• Synthesis (S)
• Evaluation (E)

Details of Assessment Tasks

Assessment Tasks:
Assessment task title: In-semester Test 1
Due Date: Week 8 – Non-lecture time

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Weighting/Value: 15%
Details of task: This will be a 1.5-hour test. Test 1 will cover lecture materials from Week
1 to Week 6 inclusive. The test is closed book and involves structured questions
(subjective).
Estimated return date: Marks will be made available to students during tutorials in Week
12.

Assessment task title: In-semester Test 2

Due Date: Week 14 – Non-lecture time
Weighting/Value: 15%
Details of task: This will be a 1.5-hour test. Test 2 will cover lecture materials from Week
7 to Week 12 inclusive. The test is closed book and multiple choice.
Estimated return date: Marks will be made available to students during tutorials in Week
15.

Assessment task title: Weekly On-line Quiz

Due Date: Refer to schedule
Weighting/Value: 20%
Details of task: This is an individual on-line quiz which must be completed on a weekly
basis. Deadline for completion of these on-line quizzes is at 11.00pm before the day of
the lecture in the following week. Each of the on-line quiz duration will be 90 minutes.
On-line quizzes will start on Week 3 through Week 13 with the exception of Week 9 which
is the mid-semester break. Therefore, there will be 10 weekly on-line quizzes. All quizzes
will be graded with the total assessment value of 20%.
This is how it will work. The on-line quiz will open at 10.00am on the day of the lecture
and you will log in to McGraw-Hill’s Connect course page to complete the on-line quiz.
Once you log in and start the on-line quiz, you will be given 90 minutes to complete it.
You can log in any time to complete the quiz, but it must be completed by 11.00pm the
day before the lecture in the following week. Access to McGraw-Hill’s Connect will be via
access cards that is bundled together with the e-book. Please refer to the below course
contents and schedule table on which week the on-line quizzes will be opened.
Estimated return date: Auto-release of marks into McGraw-Hill’s Connect upon closure of
on-line quiz each week.

Examination:
Title: Final Examination
Weighting: 50%
Length: 2 hours
Type (open/closed book): Closed book

COURSE CONTENTS AND SCHEDULE

Week Lecture Topic Assessment
1 Course Introduction Registration for tutorial slots
(14 The Economic and Institutional No tutorial in Week 1
September Setting for Financial Reporting
2018) (Chapter 1)

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2 Accrual Accounting and Income No tutorial in Week 2
(21 Determination (Chapter 2)
September
2018)
3 Revenue Recognition (Chapter 3) Online quiz 1 (Chapter 1 to 2)
(28 Tutorial 1
September
2018)
4 Structure of Balance Sheet & Online quiz 2 (Chapter 3)
(5 October Statement of Cash Flows (Chapter Tutorial 2
2018) 4)
5 Essentials of Financial Statement Online quiz 3 (Chapter 4)
(12 October Analysis (Chapter 5) Tutorial 3
2018)
6 The Role of Financial Information Online quiz 4 (Chapter 5)
(19 October in Valuation and Credit Risk Tutorial 4
2018) Assessment (Chapter 6)
7 The Role of Financial Information Online quiz 5 (Chapter 6)
(26 October in Contracting (Chapter 7) Tutorial 5
2018)
8 Receivables (Chapter 8) On-line quiz 6 (Chapter 7)
(2 November Tutorial 6
2018)
9 Mid-semester break (5 – 11 November 2018)
10 Inventories (Chapter 9) Online quiz 7 (Chapter 8)
(16 Tutorial 7
November
2018)
11 Long-Lived Assets (Chapter 10) Online quiz 8 (Chapter 9)
(23 Tutorial 8
November
2018)
12 Financial Instruments and Online quiz 9 (Chapter 10)
(30 Liabilities (Chapter 11) Tutorial 9
November
2018)
13 Financial Reporting for Owners’ Online quiz 10 (Chapter 11)
(7 December Equity (Chapter 15) Tutorial 10
2018)
14 Intercorporate Investments Tutorial 11
(14 (Chapter 16)
December
2018)
15 Statement of Cash Flows (Chapter Tutorial 12
17)

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 (21
December
2018)
16 Study Week (24 – 30 December 2018)

Prescribed Text and Readings:

1. Lawrence Revsine, Daniel W. Collins, W. Bruce Johnson, H. Fred

Mittelstaedt and Leonard C. Soffer (2018). Financial Reporting and Analysis,
McGraw-Hill Education, ISBN: 978-1-259-72265-3. [Note: As the book is
expensive, the publisher is offering only the E-book version through
McGraw-Hill Connect].

OTHER REFERENCES

1. James M. Wahlen, Stephen P. Baginski and Mark Bradshaw (2018). Financial

Reporting, Financial Statement Analysis and Valuation, Cengage Learning, ISBN:
978-1-337-61468-7.
2. David Alexander, Anne Britton, Ann Jorissen, Martin Hoogendoom and Carien van
Mourik (2017), International Financial Reporting and Analysis, 7th Edition,
Cengage Learning, ISBN: 978-1-473-72545-4.
3. K.R. Subramanyam (2014). Financial Statement Analysis, 11th Edition
(International Edition), McGraw-Hill Education, ISBN: 978-007-108683-7.
HF5681.B2S941 2014.
4. Charles H. Gibson (2013). Financial Statement Analysis, 13th Edition
(International Edition), Cengage Learning, ISBN: 978-1-133-18940-4
5. Lyn M. Fraser and Aileen Ormiston (2016). Understanding Financial Statements,
11th Edition (Global Edition), Pearson Education Limited, ISBN: 978-1-292-19155-
2. HF5681.B2F841 2016.
6. Stephen H. Penman (2013). Financial Statement Analysis and Security Valuation,
5th Edition (International Edition), McGraw-Hill Education, ISBN: 978-007-132640-
7.

Policy on Plagiarism of Universiti Sains Malaysia

The University Policy on Plagiarism describes USM’s strong commitment to uphold

academic integrity in relation to plagiarism. It will come into effect when there is an
infringement of academic conduct relating to plagiarism.

This policy acts as a guideline that both educates and prevents and can be used as the
basis if anyone that is part of the university violates any rules and laws of the University.

The policy applies to all students, former students, staff and former staff which includes
fellows, post-doctorates, visiting scholars, as well as academic, non-academic, research,
contract and temporary staff who study, serving or having served, or have graduated from
the University.

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Plagiarism is defined as the act of presenting, quoting, copying, paraphrasing or passing
off ideas, images, processes, works, data, personal words or those of other people or
sources without any proper acknowledgement, reference to or quotation of the original
source(s). The act of plagiarism include, but are not limited to, the following:

• Quoting verbatim (word-for-word replication of) works of other people.

• Paraphrasing another person’s work by changing some of the words, or the order
of the words, without due acknowledgement of the source(s).
• Submitting another person’s work in whole or in part as one’s own.
• Auto-plagiarising or self-plagiarism (one’s own work or previous work) that has
already been submitted previously for assessment, or for any other academic
award and admitting it as newly-produced without citing the original content.
• Insufficient or misleading referencing of the source(s) that would enable the reader
to check whether any particular work has indeed been cited accurately and/or fairly
and this identify the original writer’s particular contribution in the work submitted.

The university will take action of every report and offences relating to plagiarism and if
the student is found guilty, the student can be charged by the University according to the
Students Disciplinary Rules.