Course Outline: Financial Reporting and Analysis

Course code: FN523

Credit: 3 , Core Course
Area: Finance

Program: PGDM
Term I Academic Year 2021-23

_______________________________________________________________________
Instructor(s) Reena Nayyar Harshita Chhavi Mehta
Name
Room no. 411 212 410
Email reena.nayyar@imi.edu harshita@imi.edu chhavi.mehta@imi.ed
u
Phone (Extn no.) 139 122 335
Meeting Hours 2:30 pm – 3:30 pm on 2:30 pm – 3:30 pm on 2:30 pm – 3:30 pm on
Monday (or any other Monday (or any other Monday (or any other
day with prior day with prior day with prior
appointment) appointment) appointment)
______________________________________________________________________

1. COURSE DESCRIPTION

Corporate financial statements are the source of information for various stakeholders such as
shareholders, lenders, creditors and others. This course deals with understanding, preparation and
analysis of these financial statements. The course equips the students with tools and techniques
useful for analyzing and interpreting the information presented in the financial statements for
managerial decision making. 

2. COURSE OUTCOMES (COs)

After going through the course, the students would be able to:

Course Outcome 1 (CO1): Explain basic accounting principles and process of accounting.
Course Outcome 2 (CO2): Create financial statements namely Profit and Loss, Balance Sheet,
Statement of Changes in Equity and Cash Flow Statement.
Course Outcome 3 (CO3): Analyse information provided in reported corporate financial
statements.
Course Outcome 4 (CO4): Interpret the reported corporate financial statements for managerial
decision making.
3. MAPPING OF THE PROGRAM OUTCOMES (POs) & COURSE OUTCOME (COs)

Course Outcomes (COs)

Program Outcomes (POs)
CO1 CO2 CO3 CO4
PO1: Student should be able to write well organized and
grammatically correct business reports and letters.
PO2: Student should be able to make effective oral
presentations.
PO3: Student should be able to demonstrate critical thinking
skills by understanding the issues, evaluating alternatives on the
3 3 3 3
basis of multiple perspectives and presenting a solution
including conclusions and implications.
PO4: Student should be to demonstrate problem solving skills
by understanding and defining the problem, analyzing it and
3 3 3 3
solving it by applying appropriate theories, tools and techniques
from various functional areas of management.
PO5: Student should be able to illustrate the role of responsible
leadership in management.
PO6: Student should be able to identify social concerns and
ethical issues in management.
PO7: Student should be able to identify challenges faced by the
organization at the global level.
PO8: Student should be able to take decisions in the global
business environment.

4. PEDAGOGY

The pedagogy for this course will be a judicious mix of lectures, numerical problems, case
discussions and analysis. Active participation by students is an important feature of the course.
To apply the learning during this course, the student will be doing a group project.

5. COURSE EVALUATION COMPONENTS (CECs)

Component 1: Class participation (5%)

Students will be evaluated for their active contribution in class preparation based upon the
prerequisite readings, case discussions, class contribution and overall conduct in every class.
Component 2: Quizzes (20%)
The quizzes will be compulsory and will be spread across the entire course. If any student misses
any quiz, no makeup quiz will be given later.
Component 3: Group project (10%)
Each group is expected to work on a project allocated by the instructor. The project will entail
analyzing and interpreting financial statements of the companies allocated to the groups.
Component 4: Mid Term (25%)
Mid-term examination will assess the conceptual understanding of financial statements and
preparation thereof.
Component 5: End Term (40%)
End-term examination will evaluate the capability of students to analyze and interpret the
reported corporate financial statements.

6. MAPPING BETWEEN COs, POs and CECs

Course Evaluation Components (CECs)

COs POs Class Quiz Project Mid-term End-term

participatio
n

CO1 PO3
✓ ✓
PO4

CO2 PO3
✓ ✓
PO4

CO3 PO3
✓ ✓ ✓ ✓
PO4

CO4 PO3
✓ ✓ ✓
PO4

7. RESOURCES

7.1 Textbook
 Financial Accounting for Managers, Sanjay Dhamija, 3rd ed., Pearson, 2018

7.2 Reference Books

  Financial Accounting: A Managerial Emphasis by R. Narayanaswami, 6 th ed., PHI,
2017.Financial Accounting: Fundamentals Accounting and Reporting by R. K. Arora, 2 nd
ed., Wiley, 2019.
 Corporate Financial Reporting and Analysis by Asish K Bhattacharyya, 2nd ed., PHI
Learning, 2019.
 Accounting: Texts and Cases by Robert Anthony, David Hawkins and Kenneth A.
Merchant, 13th ed., McGraw Hill, 2019.
 Financial Accounting for Management by N. Ramachandran and Ram K. Kakani, 5 th ed.,
McGraw Hill, 2020.

7.3 Online References (if any)

 Corporate websites for annual reports
 moneycontrol.com
 in.finance.yahoo.com
 Financial newspapers

8. SESSION PLAN

Session(s) Topic Readings

/ Cases

1-2 Introduction to Profit and Loss & Balance Chapter 4

Sheet Practice Question

3-4 Statement of Profit and Loss Chapter 5 & 7

 Format of statement of profit and loss Practice Question
 Revenue – Quantum and timing
 Expenses Maruti Suzuki
 Exceptional items Annual Report 2019-20

5-6 Statement of Profit and Loss Chapter 5

 Profit/Loss from discontinued operations Practice Question &
 Profit/Loss for the period Caselets
 Other comprehensive income
 Earnings per share Maruti Suzuki
 Various measures of profit Annual Report 2019-20
 Appropriation of profit

7-8 The Balance Sheet Chapter 6

 Format of balance sheet
  Assets – Non-current assets and current Maruti Suzuki
assets Annual Report 2019-20
 Equity – Share capital and other equity

9-10 The Balance Sheet Chapter 6

 Liabilities – Non-current liabilities, current Caselets
liabilities, contingent liabilities and
commitments Maruti Suzuki
 Statement of changes in equity Annual Report 2019-20

11 Accounting and Valuation of Inventory Chapter 8

 Types of inventories Practice Questions
 Inventories and the Financial Statements
o Methods of inventory accounting
o Valuation of inventory
o Costing methods

12 Accounting for Fixed Assets and Chapter 9

Depreciation Practice Questions
 Property, plant and equipment
 Investment property
 Intangible assets
 Impairment of assets

13-14 Financial Statements Analysis Chapter 14

 Common size statements Practice Questions
 Indexed financial statements
 Ratio analysis – Short-term liquidity, Asset Maruti Suzuki
utilization, capital structure Annual Report 2019-20

15-16 Financial Statements Analysis Chapter 14

 Ratio analysis – Profitability, return, growth, Practice Questions
dividend policy, market ratios
Maruti Suzuki
Annual Report 2019-20

17 Cash Flow Statement Chapter 11

 Introduction to cash flow statement Practice Questions
 Need for cash flow statement
 Defining cash – Cash and cash equivalent
 Classification of cash flows:
 o Cash flow from operating activities
o Cash flow from investing activities
o Cash flow from financing activities

18-19 Cash Flow Statement Chapter 11

 Preparation of cash flow statement
 Special points Practice Question &
 Cash flow at different stages of company life Caselets
cycle
Maruti Suzuki
Annual Report 2019-20
HBR article # BH013-PDF-
ENG: Solving the Puzzle of
Cash Flow Statement

20 Financial Statements Analysis

Group Presentations

9. ACADEMIC INTEGRITY & CLASS RULES

a) Plagiarism is the use of or presentation of ideas, works that are not one’s own and which
are not common knowledge, without granting credit to the originator. Plagiarism is
unacceptable in IMI and will invite penalty. Type and extent of penalty will be at the
discretion of the concerned faculty.
b) Cheating means using written, verbal or electronic sources of aid during an examination/
quiz/ assignment or providing such assistance to other students (except in cases where it
is expressly permitted by the faculty). It also includes providing false data or
references/list of sources which either do not exist or have not been used, having another
individual write your paper or assignment or purchasing a paper for one’s own
submission. Cheating is strictly prohibited at IMI and will invite penalty as per policies of
the Institute.