Institute of Rural Management Anand (IRMA)

PGDM (RM) – 41 (2020-22)

Academic Year 2021-22

Term IV
Title of the Course: Financial Statement Analysis and Credit: Elective (1.5)
Advance Accounting (FSAAA)
Name of the Faculty: CA. Asmita H. Vyas
Email ID: asmita@irma.ac.in Contact No.: 9974571571

COURSE DESCRIPTION:
The primary objective of financial statement analysis is to understand and diagnose the
information contained in the financial statement to judge the profitability and financial soundness
of the firm and to make forecasts about the prospects of the firm.

COURSE OBJECTIVES:
This course covers advanced financial reporting issues and accounting methods for company
accounting. It introduces different types of inter-entity relationships and related accounting
issues and accounting treatments. Financial statement analysis attempts to determine the
significance and meaning of the financial statement data so that forecast may be made of the
future earnings, ability to pay interest and debt maturities (both current and long-term) and
profitability for a sound dividend policy.

LEARNING OUTCOME:
The student will be able to understand the objectives of financial statements and able to explain
the contribution and inherent limitations of financial statements in meeting stakeholder’s needs
for financial information.

COURSE REQUISITES:
HBS cases and Simulation Game.

PEDAGOGY / TEACHING METHODOLOGY:

Classroom cases discussion and solution, Simulation Game, Teaching Material related to the particular
topics. The pedagogy would consist of an appropriate mix of lectures, case studies, group exercises,
discussion and problem-solving.

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EVALUATION:
Component *Weightage %
Class Participation 15
Quizzes 15
Group Assignment 20
End Term 50
TOTAL 100
*No single component should have a weightage of more than 50 percent of evaluation in a 1.5-
credit course and more than 35 percent in a 3-credit course.

DETAILS/INSTRUCTIONS FOR EVALUATION: NIL

TEXTBOOKS: NIL

ADDITIONAL BOOKS / READINGS: NIL

SESSION WISE READING PLAN:

Session:1 Introduction to Financial Statements – Income Statement, Balance sheet and Cash Flow
Statement
Reading(s):
TAU - Chapter-1
HBS Case – Financial Ratios & Financial Statement Analysis

Session:2 Tools of Financial Statement Analysis: Common-Size Statements, Comparative

Analysis (Year on Year Analysis), Trend Analysis and Ratio Analysis from the Income statement
and balance sheet
Reading(s):
TAU - Chapter-2
HBS Case - Financial Ratio Analysis , Anandam Manufacturing Company: Analysis of Financial
Statements

Session:3 Cash Flow Ratios

Reading(s):
TAU – Chapter - 4
HBS Case – American Apparel

Session:4 Industry-wise difference

Reading(s):
TAU - Chapter-2
HBS Case – Ahold v.s Tesco, Identify the Industry, Unidentified Industries

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Session:5 Analysis of Cash Flow Statements
Reading(s):
TAU – Chapter - 4
HBS Case – BNL Stores

Session: 6 & 7 Expanded Analysis – Financial Ratios as perceived by commercial loan

departments, financial ratios as per corporate controllers, financial ratios in annual reports,
management’s use of analysis.
Class Activity: Simulation Game Play

Session:8 Accounting for Not-For-Profit Organizations

Reading(s):
TAU – Chapter - 3

Session:9 Analysis of Financial Statements of Cooperatives

Session:10 Recap

IMPORTANT GUIDELINES:
The guidelines will be given during the sessions as and when needed.

PARTICIPANTS ROLES & RESPONSIBILITIES:

1. Follow the norms of the PRM Handbook in the classroom.
2. Complete the activity that the instructor assigns within the time limit.
3. The communication should be through formal means.
Actively participate in the class as it will help the participant to develop the knowledge of the course
through interaction, and it will help them to understand the course properly.

HOW DOES THIS COURSE BE RELEVANT TO IRMA’S MISSION:

Financial Statement Analysis is helping people to assess the earning capacity or profitability of
the firm & operational efficiency, and managerial effectiveness.

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