DEPARTMENT OF FINANCE

UNIVERSITY OF DHAKA
MPF PROGRAM
Course PF-603: Financial Statement Analysis and Reporting
January-June 2018
Course Teacher:
Professor M. Sadiqul Islam, Ph.D., FCMA
312 Academic Building
Course Objective:
The objective of this course is to introduce the techniques of analyzing the financial
statements and to provide a framework for preparing financial statements using accounting
standards. The course will include business strategy analysis, accounting policy analysis,
financial ratio analysis, prospective analysis, preparation of financial statements using
accounting standards. In addition, cases will be analyzed to provide exposure to business
problems in business analysis.
Key Learning Outcomes:
After completing the course, students should be able to analyze the strengths and weaknesses
of a firm using ratios, Du Pont system, decomposition of ROE and cash flow statements.
Students should also be able to prepare financial statements following International and
Bangladesh Accounting Standards.
Texts:
1. Business Analysis and Valuation using Financial Statements, Text and Cases
(4thed)
- Palepu, Healy and Bernard
- Thomson South Western
2. Financial Reporting, ACCA Text Materials (BPP)

References:
1. Financial Statement Analysis and Security Valuation (4thed)
- Stephen H Penman
- McGraw Hill India
Grading:
The grading of this course will be based on the following weights:
Case Analysis, Reports, 10%
Presentation&Participation 20%
Two In-term Tests 30%
Final Exam. 40%
Total 100%
Students should understand that marks are assigned for class participations both in lecture
sessions and presentation sessions. Marks will be deducted for absence in the class and
particularly in presentationsessions. Grades are earned by the students. Students can claim
their grade if they consider that they have earned it.
Case Presentations and Reports:
Students are expected to form groups for the presentation of cases and preparation of case
reports and term papers. A group can have a maximum of three members. Each member is
expected to participate in and contribute to the group equally. Grades will be based on group
presentation and report, individual presentation and class participation.
No definite format is prescribed for a case report, but in general a case report includes an
introduction, statement of the problem, alternative courses of actions, analysis of each
alternative and recommendations. All arguments should preferably be backed up by
quantitative estimates. Students may not need to use every piece of information provided in
the case. For any information required for analysis, but not mentioned in the case, students
are free to make any realistic assumption. However, their assumptions cannot contradict any
information provided in the case. Also, students cannot use any outside information for
analyzing the case. Students should provide justification in favor of their recommendations.
For case presentations, students are expected to use multimedia overhead projector. A hard
copy of presentation slides (6 slides per page) and a soft copy of presentation material (power
point and excel sheets) should be submitted by all groups at the beginning of class (Make a
folder of your files and the name of your files should be include your group number; for
example, ABC-Group7.ppt, ABC-Group7.xls). Students will be severely penalized if they
copy others reports and presentation materials or part thereof. Even one group is not allowed
to share its analysis or presentation materials with other groups.
Problems and conflicts within the group should preferably be resolved internally. If group
members are divided with respect to solution and recommendation, they may choose to
provide separate reports.

COURSE CONTENTS
Classes Contents (Tentative) Books
1 Financial Statement Analysis– Financial reporting and capital Palepu
markets, Business activities, financial statements and business
analysis

2 Accounting Analysis - Institutional framework, Accounting quality, Palepu

Steps in accounting analysis, pitfalls.

2 Implementing Accounting Analysis– Recasting financial Palepu

statements, Asset distortions, Liability distortions and Equity
distortions.

3-7 Financial Analysis– Ratio analysis, Du Pont System, Palepu

Decomposition of ROE, Identifying the strengths and weaknesses of
a firm using ratios; Cash flow analysis.

First Mid-term Test

8 The conceptual and regulatory framework for financial BPP

reporting

9-13 Accounting for transactions in financial statements – Non- BPP

current assets, Intangible assets, Impairment of assets, Reporting
financial performance, Preparation of consolidated financial
statements.

Second Mid-term Test

14-17 Accounting for selected assets and liabilities – Inventories and BPP
Biological assets, Provisions, Contingent assets and Contingent
liabilities, Financial instruments, Revenue and Leasing

18 Presentations

Final Exam