MBAB 424: FINANCIAL STATEMENT ANALYSIS
Hard Core: 3 Credit
Prerequisite: Basic knowledge in Financial Accounting
1. To analyze and interpret Financial statements for Managerial Decision Making
2. To understand the role of Information Technology for analyzing Financial Statements
1. To gain knowledge and skills in analyzing and interpreting financial statements.
2. To acquire knowledge to apply efficient and effective approach to rescheduling, interpreting and analyzing financial statements
Lecture, Discussions, Exercise, Case studies, Assignments and mini projects
Unit I: Financial Analysis Tools and Techniques- Objectives of Financial Statement Analysis – Horizontal vs. Vertical Analysis - Tools and Techniques of Financial Statement Analysis – Sources of Information – Standards for Comparison – Comparative, Common-Size and Trend Analysis.
Unit II: Ratio Analysis Classification – Profitability Ratios - Short Term Liquidity Ratios - Operating Performance and Efficiency Ratios– Capital Structure and Long Term Solvency Ratios – Market measures Ratio – Analyzing Bank Financial Statements – Ratios for Trading, Manufacturing and Service organizations. Forecasting Financial Statements - One Year Projection – Sensitivity Analysis – Contribution Margin Analysis – Projecting Financial Flexibility – Multiyear Projection
Unit III: Fund and Cash Flow Analysis- Concept of Funds – Funds Flow Statement – Statement of Changes in working capital - Calculation of Funds from operation – Sources of Funds – Applications of Funds – Preparation of Funds Flow Statement. Uses and Structure of Cash Flow Statement – Preparation of Cash flow statement – Determining Net Cash flow from Operating Activities - Direct and Indirect Method - Determining Cash flow from Investing Activities - Determining Net Cash flow from Financing Activities – Reporting Cash Flows – Interpreting the Cash Flow Statement.
Unit IV: Cost-Volume-Profit Analysis- Marginal Costing – Assumptions of Marginal Costing – Marginal Costing vs. Absorption Costing – Profit /Volume Ratio – Cost-Volume-Profit Analysis – Break-Even Analysis – Margin of Safety – Managerial Applications of Marginal Costing.
Unit V: Budgetary Control and Variance Analysis- Budget, Budgeting and Budgetary Control – Essentials of Budgetary Control – Budgeting vs. Forecasting –Classification and Types of Budgets – Zero-Base Budgeting – Activity based Budgeting – Analysis of variance –Material, Labour, Overhead and Sales variances.
Text Books and Reference Books:
1. MartinS. Fridson, Fernando Alvarez, Financial Statement Analysis: A Practitioner's Guide, Wiley India Private Ltd Finance, Fifth Edition,2019-20.
2. ShashiK.Gupta&R.K.Sharma,ManagementAccountingPrinciplesandPractice,KalyaniPublishers,14th Edition,2019-20.
3. K.Scott Proctor, Building Financial Models with Microsoft Excel–A Guide for Business Professionals, Wiley India Private Ltd Finance,2019-20.
4. JohnJ.Wild, K.R.Subramanyam, Financial Statement Analysis, Mc Graw Hill Education, Latest edition
Tools/Software: MS Excel, Power BI, Tableau
- Teacher: sudalaimuthu shangmugam
- Enrolled students: There are no students enrolled in this course.