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Handout - FIN ZC415
Handout - FIN ZC415
Learning Outcomes
No At the end of the course, the student will be able to;
L01 Interpret, identify, classify elements of the financial accounting transactions and summarise it
L02 Construct classified Balance Sheet, Profit & Loss Account and Cash Flow Statements
L03 Measure, analyze, and evaluate the financial statements and business performance of a firm
L05 Evaluate capital investments and recommend based on capital-budgeting decision criteria
Course Objectives
No
C02 Learn to prepare financial statements from information and interpret transactions.
C04 Examine the cost behavior and use of CVP for managerial decision making.
C05 Use capital budgeting techniques to analyse and make capital budgeting decisions.
Text Book
*If you are not able to find a copy of Text Book, feel free to get any one of the three reference books
mentioned below.
Reference Book(s)
9 Cost-volume- To learn to determine optimal scale What is the minimum scale of business
profit analysis of business operations for different that needs to be achieved before it starts
profit levels conditional to cost making profit? What scale needs to be
structure of a firm achieved to earn a target profit level?
10 Capital Budgeting To learn the techniques of Which investment projects should the
investment decision making business invest in given the limited
resources?
Content Structure
1. Introduction to Accounting
1.1. Why study accounting?
1.1.1. How valuable is the knowledge of financial accounting?
1.1.2. Types of business and information requirement
1.1.3. Financial accounting as an information system for stakeholders in business
1.2. What is accounting?
1.2.1. Definition of Accounting and accounting cycle
1.2.2. Introduction to Annual Accounting Statements
1.2.3. In class exercise
2. Generally Accepted Accounting Principles (GAAP)
2.1. Balance Sheet Principles
2.1.1. Money Measurement Concept
2.1.2. Business Entity Concept
2.1.3. Going Concern Concept
2.1.4. Cost Concept
2.1.5. Dual Aspect Concept
2.2. Income Statement concepts
2.2.1. Accounting Period Concept
2.2.2. Conservatism Concept
2.2.3. Realization Concept
2.2.4. Matching Concept
2.2.5. Consistency Concept
2.2.6. Materiality Concept
2.3. Accounting Equation
3. Journal
3.1. What is journal?
3.1.1. Meaning and format of Journal
3.1.2. Nature of business transactions
5. Trial Balance
5.1. Format of trial balance
5.2. Transferring ledger balances to trial balance
5.3. Errors in preparation of trial balance
6. Final Accounts
6.1. Preparation of final accounts
6.1.1. Components of final accounts
6.1.2. Format and preparation of Income Statement & Balance Sheet
6.2. Adjustments for Transactions after closing of accounts
6.2.1. Outstanding and Prepaid Expenses
6.2.2. Closing stock
6.2.3. Fixed asset purchase/sale, Depreciation and profit/loss
6.2.4. Bad debts
7. Ratio Analysis
7.1. Introduction to Ratio Analysis
7.1.1. Introduction to financial ratio analysis
7.1.2. Meaning and classification of ratios
7.2. Liquidity ratios
7.2.1. About liquidity ratios
7.2.2. Current ratio
7.2.3. Liquid ratio
7.2.4. Absolute liquid ratio
7.2.5. Calculating liquidity ratios
7.3. Solvency ratios
7.3.1. About solvency ratios
7.3.2. Debt-equity ratio
7.3.3. Proprietary ratio
7.3.4. Gearing ratio
7.3.5. Interest coverage ratio
7.3.6. Calculating solvency ratios
7.4. Profitability ratios
7.4.1. Gross profit ratio, Operating ratio, operating profit ratio, net profit ratio, Calculation
of above ratios
7.4.2. ROI, ROCE, EPS, DPR, DYR, PER
7.4.3. Calculation of above ratios
7.5. Turnover ratios
7.5.1. Introduction to turnover ratios
7.5.2. STR
7.5.3. DTR and ACP
7.5.4. CTR and APP
7.5.5. Working capital turnover ratio
7.5.6. Fixed asset turnover ratio
7.5.7. Calculation of these ratios
8. Cash flow statement
8.1. Introduction to Cash flow statement
8.1.1. Need for cash flow statement
8.1.2. Types of cash flows
8.1.3. Defining cash for cash flow statement
8.1.4. Format of Cash flow statement
8.2. Calculation of cash from operating activities
8.2.1. Why accounting profit is not cash profit
8.2.2. How to calculate operating cash profit from accounting profit
8.2.3. Format - Calculation of cash from operating activities
8.2.4. Example problem -calculating cash flows from opearting activities
8.2.5. Treatment of exceptional item - Provision for tax
8.3. Calculation of cash from investing activities
8.3.1. Format - Calculation of cash from investing activities & Example problem
8.3.2. Treatment of exceptional item - purchase/sale of fixed asset
8.4. Calculation of cash from financing activities
8.4.1. Format - Calculation of cash from financing activities & Example
8.4.2. Treatment of exceptional item - dividend provision
8.5. Practice problems
8.5.1. Preparing CFS without additional information
8.5.2. Preparing CFS with additional information
This course will feature experiential learning components in the form of projects / assignments.
ELC is designed to enable the participants to learnby doing. This will also form part of the
Evaluation Components for the course.
Glossary of Terms:
1. Contact Hour (CH) stands for one hour long live session with students conducted either in a physical
classroom or enabled through technology. In this model of instruction, instructor led sessions will be
for 22 CH.
a. Pre CH = Self Learning done prior to a given contact hour
b. During CH = Content to be discussed during the contact hour by the course instructor
c. Post CH = Self Learning done post the contact hour
2. RL stands for Recorded Lecture or Recorded Lesson. It is presented to the student through an online
portal. A given RL unfolds as a sequences of video segments interleaved with exercises
3. CS stands for case study
4. QZ – Quiz component will be aggregated into 10% of the total evaluation component.
5. HW stands for Home Work and could be a selection of problems or CS from the text.
Contact Hour 1
Time Type Sequence Content Reference
Pre CH RL 1.1.1
1.1.2
1.1.3
Post CH HW1
Post CH QZ1
Note: HW/QZ to be assigned at the end of contact hour
Contact Hour 2
Time Type Sequence Content Reference
Pre CH RL 1.2.1
1.2.2
Post CH HW2
Post CH QZ2
Note: HW/QZ to be assigned at the end of contact hour
Contact Hour 3
Time Type Sequence Content Reference
Post CH HW3
Post CH QZ3
Note: HW/QZ to be assigned at the end of contact hour
Contact Hour 4
Time Type Sequence Content Reference
Post CH HW4
Post CH QZ4
Note: HW/QZ to be assigned at the end of contact hour
Contact Hour 5
Time Type Sequence Content Reference
Post CH HW5
Post CH QZ5
Note: HW/QZ to be assigned at the end of contact hour
Contact Hour 6
Time Type Sequence Content Reference
Post CH HW6
Post CH QZ6
Note: HW/QZ to be assigned at the end of contact hour
Contact Hour 7
Time Type Sequence Content Reference
Post CH HW7
Post CH QZ7
Note: HW/QZ to be assigned at the end of contact hour
Contact Hour 8
Time Type Sequence Content Reference
Post CH QZ8
Note: HW/QZ to be assigned at the end of contact hour
Contact Hour 9
Time Type Sequence Content Reference
Post CH HW9
Post CH QZ9
Note: HW/QZ to be assigned at the end of contact hour
Contact Hour 10
Time Type Sequence Content Reference
Post CH HW10
Post CH QZ10
Note: HW/QZ to be assigned at the end of contact hour
Contact Hour 11
Review session before mid term
Contact Hour 12
Time Type Sequence Content Reference
Post CH HW12
Post CH QZ12
Note: HW/QZ to be assigned at the end of contact hour
Contact Hour 13
Time Type Sequence Content Reference
Post CH HW13
Post CH QZ13
Note: HW/QZ to be assigned at the end of contact hour
Contact Hour 14
Time Type Sequence Content Reference
During CH CH 8.2.1
8.2.2
8.2.3
8.2.4
8.2.5
Post CH HW14
Post CH QZ14
Note: HW/QZ to be assigned at the end of contact hour
Contact Hour 15
Time Type Sequence Content Reference
Pre CH None None
Post CH HW15
Post CH QZ13
Note: HW/QZ to be assigned at the end of contact hour
Contact Hour 16
Time Type Sequence Content Reference
Pre CH RL None
Post CH HW16
Post CH QZ16
Note: HW/QZ to be assigned at the end of contact hour
Contact Hour 17
Time Type Sequence Content Reference
Pre CH RL None
Post CH HW17
Post CH QZ17
Note: HW/QZ to be assigned at the end of contact hour
Contact Hour 18
Time Type Sequence Content Reference
Post CH HW18
Post CH QZ18
Note: HW/QZ to be assigned at the end of contact hour
Contact Hour 19
Time Type Sequence Content Reference
Pre CH RL None
During CH CH 9.1.4
Post CH HW19
Post CH QZ19
Note: HW/QZ to be assigned at the end of contact hour
Contact Hour 20
Time Type Sequence Content Reference
Pre CH RL None
Post CH HW20
Post CH QZ20
Note: HW/QZ to be assigned at the end of contact hour
Contact Hour 21
Time Type Sequence Content Reference
Pre CH RL None
Post CH HW21
Post CH QZ21
Note: HW/QZ to be assigned at the end of contact hour
Contact Hour 22
Review Session before end term
Evaluation Scheme:
Legend: EC = Evaluation Component; AN = After Noon Session; FN = Fore Noon Session
No Name Type Duration Weight Day, Date, Session, Time
EC-1 Quizzes Online - 10% TBA
EL-1 Experiential Group 15% TBA
Learning
EC-2 Mid-Semester Test Closed 2 hours 30% TBA
Book
EC-3 Comprehensive Open 3 hours 45% TBA
Exam Book
Contact sessions: Students should attend the online lectures as per the schedule provided on the Elearn
portal.
Evaluation Guidelines:
1. EC-1 consists of Quizzes. Students will attempt them through the course pages on the Elearn portal.
Announcements will be made on the portal, in a timely manner.
2. EL-1 is the experiential leaning component for which a project will be assigned to you. You will
have submission towards the end of the course. Dates will be announced on the portal.
3. For Closed Book tests: No books or reference material of any kind will be permitted.
4. For Open Book exams: Use of books and any printed / written reference material (filed or bound) is
permitted. However, loose sheets of paper will not be allowed. Use of calculators is permitted in all
exams. Laptops/Mobiles of any kind are not allowed. Exchange of any material is not allowed.
5. If a student is unable to appear for the Regular Test/Exam due to genuine exigencies, the student
should follow the procedure to apply for the Make-Up Test/Exam which will be made available on
the Elearn portal. The Make-Up Test/Exam will be conducted only at selected exam centres on the
dates to be announced later.
It shall be the responsibility of the individual student to be regular in maintaining the self study schedule as
given in the course handout, attend the online lectures, and take all the prescribed evaluation components
such as Assignment/Quiz, Mid-Semester Test and Comprehensive Exam according to the evaluation scheme
provided in the handout.