by h o ondigo university of nairobi school of business may 2012 dac 511 : corporate financial...

BY

H O ONDIGOUNIVERSITY OF

NAIROBISCHOOL OF BUSINESS

MAY 2012

DAC 511 : CORPORATE FINANCIAL REPORTING

AND ANALYSIS

COURSE OUTLINE

• COURSE TITLE: FINANCIAL REPORTING AND ANALYSIS.COURSE CODE: DAC 511

• LECTURERS: MR. HERICK ONDIGO • SEMESTER: MAY- AUGUST 2012

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COURSE OBJECTIVES:

• To Expose the learner into the role of corporate financial Reporting in the economic decision making process and equip the learner with the tools and methods used in the analysis financial reports by management investors and other interested external users.

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COURSE TEXT

 • Wild J.J., K.R Subranyam and

R.B.Hasley., Financial Statement Analysis, McGraw-Hill 9th, Edition, 2007

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OTHER READING MATERIAL

• White, G.I, A.A Sondi, and D. Fried., The Analysis and use of Financial Statements, 3rd Edition John Wiley and Sons, 2003

• Revsine, L., Collins, D.W and Johnson, W.B., Financial Reporting and Analysis ,3rd Edition ,Prentice Hall,2005

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OTHER READING MATERIAL CONT…

• Stickney, Brown and Wahlen., Financial Reporting and Statement Analysis ,5th edition ,Thomson Southwestern ,2004

• Gibson Charles, Financial Reporting and Analysis using financial Accounting Information, South-Western Cengage Learning ,11th Edition, 2009.

• Dunn John, Financial Reporting and Analysis, John Wiley and Sons ,2009

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OTHER READING MATERIAL CONT…

•  Friedlob T George & L. F Schleifer., Essential of Financial Analysis ,John Wiley and Sons ,2009

• Comiskey E Eugene & C. W Mulford.,

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METHODOLOGY

• The course will be conducted mainly by way of lectures, presentations and class discussions. Students are advised to read the relevant texts before lessons are covered in class.

•  Assignments 20%• Tests 30%• Final Examination 50%• Total Mark 100%

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EVALUATION

• Assignments 10%• Term Paper 10%• Class Presentations 10%• Tests 20

%• Final Examination 50% • Total Mark 100%

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TOPICS1: Overview of Financial Analysis

• Business analysis• Financial Statements – The Basis

of Analysis• Financial Statement Analysis

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2. Financial Reporting and Analysis

• Reporting Environment• Nature and Purpose of Financial

Accounting• Accruals- Cornerstone of

Accounting• Introduction to Accounting

Analysis

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3. Analyzing Financing Activities

• Liabilities• Leases• Post Retirement Benefits• Contingencies• Off Balance sheet Financing• Shareholders’ Equity

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4. Analyzing Investing Activities

• Current assets• Long-term assets• Plant assets and Natural Resource• Intangible Assets

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5. Analyzing Inter Corporate Investments

• Investment Securities• Business combinations• Derivative Securities

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6. Analyzing Operating Activities

• Income Measurement• Non-Recurring Items• Revenues and Gain Recognition• Supplementary Employee

Benefits• Income Taxes

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7. Cash Flow Analysis

• Statement of Cash flows• Analysis and Implication of Cash

Flows• Analysis of Cash Flows• Specialized Cash flow Ratios

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8. Return on Invested Capital and Profitability Analysis

• Importance of Return on Invested Capital

• Components of Return on invested Capital

• Analyzing Return on Net Operating Assets

• Analyzing Return on Common Equity

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9. Prospective Analysis

• The Projection Process• Projecting Financial

Statements• Application of Prospective

Analysis in the Residual Income Valuation Model Trends in Value Drivers

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10. Credit Analysis

• Liquidity and Working Capital• Operating analysis of Liquidity• Additional Liquidity Measures

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11. Capital Structure and Solvency Analysis

• Basics of Solvency• Capital Structure Composition and

Solvency • Earnings Coverage

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12: Equity Analysis and Valuations

• Earnings Persistence• Earnings Based Equity• Earnings Power and Forecasting

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THE END

• BEST OF LUCK IN THE COURSE

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