IGESSIGESS (Institute for Global Economics and Social Sciences)

Stakeholders such as investors, suppliers, customers, employees and regulators, etc. need to be able to analyze and interpret financial statements. Precise analysis of these documents can help both internal and external decision makers evaluate an organization's past performance and then predict its future performance. In class we focus our attention on some basic and important ratios and other analytical tools.

After studying Financial Statement Analysis, you should be able to:
1.Recognize and define the main elements(stock data) and ratios on the balance sheet of a corporation.
2.Recognize and define the principal elements(flow data) and ratios on the income statement of a corporation.
3.Recognize and define the principal elements(flow data) and ratios on the cash flow statement of a corporation.
4.Compute and interpret basic and important financial ratios that would be useful to each stakeholder.
5.Make use of knowledge gained in a business setting in the near future.

英語 / English

This course is comprised partly of lectures, practices, and presentations by students. In each class, the instructor will first explain the topic of the day and students will do exercises. Participants are also required to make a presentation about corporate financial strength 3(three) times per semester.

あり / Yes

なし / No

※各回の授業形態は予定です。教員の指示に従ってください。

1：Introduction

Course explanation

2：BS framework

Concepts of the balance sheet and practice

3：IS and CFS framework

Concepts of the income statement and cash flow statement and practice

4：Database and other company information

How to access and use a database

5：Profitability ratios - on the income statement

Return on sales, gross profit margin, concepts and practice

6：Profitability ratios - on the balance sheet and the income statement

Return on assets, return on equity, concepts and practice

7：Liquidity ratios - on the balance sheet

Current ratio, acid-test ratio, concepts and practice

8：Liquidity ratio - additional computation

Cash ratio, concepts and practice

9：Leverage ratios

Debt ratio, times interest earned ratio, concepts and practice

10：Efficiency ratios

Inventory turnover, accounts receivable turnover, day's sales in receivables,
concepts and practice

11：Valuation ratios

Earnings per share(EPS), price/earning ratio(P/E), concepts and practice

12：Additional valuation ratios

Dividend yield, payout ratio, concepts and practice

13：Final thoughts and review of the course

Q & A, practice

14：Final exam

Final exam

Preparing for class by reading materials will be key to succeeding in this course. Preparatory study and review time for this class are 2 hours each.

Textbooks are not used in this course. Slides(handouts) based on the following reference book will be distributed in class.

Axel Tracy(2012). Ratio Analysis Fundamentals(2nd Edition), AF.
Other materials will be announced in class.

Class contribution(presentation,discussion): 40% and Final Exam: 60%

The instructor will try to give a clearer explanation.

As free financial statements are available on the internet, a personal computer will expedite your work in class.

Since basic knowledge of Accounting is required, it is advisable that students have taken 'Introduction to Accounting'.

Introduction to Accounting

Please note that the teaching approach may vary according to which threat level we are at: at level 1, this course will be held on campus, though at level 2, it will be held online.