SCHOOL OF BUSINESS

COURSE OUTLINE

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DEPARTMENT: BUSINESS STUDIES

PROGRAMME: BCOM [FINANCE]

YEAR: THREE SEMESTER: ONE

UNIT CODE:HBF 2303 UNIT TITLE : FINANCIAL STATEMENTS ANALYSIS

LECTURE HOURS: 35 PRE-REQUISITES: INTRODUCTION TO ACCOUNTING II

LECTURER:Dr. Mary Maina

LECTURER CONTACTS: 0724679426

1.0 COURSE PURPOSE

2.0 To use accounting and statistical tools to evaluate various business trends such as
profitability, liquidity and capital structure to facilitate decision making.
3.0 LEARNING OUTCOMES
To be able to carry out financial ratios analysis, common size analysis, trend analysis and
horizontal analysis
3.0 COURSE OUTLINE
Week Topic Sub-Topic Remarks
1. Introduction Users of financial statements
2. Overview of financialBalance sheet, Income statements and
3. Profitability
statements Ratios ROA, ROE,
cash flow Profit margin ratios
statements
4. Liquidity Ratios Working capital, Current ratio, Acid test
5. Activity Ratios Assets,
ratio stock, debtors, creditors turnover
6. Leverage Ratios Debt-equity ratio, Coverage ratios
7. CAT ONE CAT ONE
8. Cross- sectional analysis Horizontal analysis
9. Cross Sectional Analysis Vertical analysis
10. CAT TWO

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 10 Common size analysis Using % and base years
11. Trend analysis Using long run method
12. Comparative analysis Industry analysis
13. Market analysis Earnings rations and forecasts
14. Revision Revision

4.0TEACHING METHODOLOGY
Lectures, Group discussions
5.0 INSTRUCTIONAL MATERIALS
Tablet, LCD projector
6.0 COURSE EVALUATION
CAT 1= 20 %
CAT 2= 10%
Average= 30%
Examination = 70 %
Total = 100%
Pass mark: 40%
7.0 COURSE TEXTBOOKS
Lieberman, G. (2005). Introduction to Operations Research, 9th Edition.
8.0 REFERENCE TEXTBOOKS
Warren C s, Reeve, J and Fess P.E. (2001)
9.0 COURSE JOURNALS
International Journal of Operations Research

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