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DE LA SALLE UNIVERSITY

Ramon V. Del Rosario College of Business

Financial Management Department

COURSE SYLLABUS

COURSE TITLE : ANALYSIS OF FINANCIAL STATEMENT OF FIRMS (FSANFIN)

COURSE CREDIT : Three (3) units

PREREQUISITES : BASFIN2; LBYFIN2; STATFIN

PREREQUISITE TO : BAMAFIN; MARKFIN; INMUFIN

COURSE CATEGORY : Major

SCHEDULE :

FACULTY :

COURSE DESCRIPTION:

This is a basic course in Management of Financial Institutions designed to provide the

students with knowledge and skills in analyzing the financial statements of modern

financial institutions, specifically banks, insurance companies, securities firms and

investment houses, mutual fund management companies and finance companies from the

users point of view. Such analysis shall focus on the financial institutions goal of not just maximizing their value but bearing and managing risk on behalf of customers through the

pooling of risks and sale of their services as risk specialists.

LEARNING OUTCOMES (LO):

On completion of the course, the student is expected to be able to do the following: Expected Lasallian Graduate

Attributes (ELGAs)

LEARNING OUTCOMES

Critical and Creative Thinker - Read and understand financial statements of the different

traditional sectors in the financial services industry

- Analyze modern financial institutions management from

balance sheet presentations, management decision making

and risk management approaches.

- Describe how forces such as financial innovation,

technology, taxation, and regulation can affect financial

performance of various sectors in the financial services

industry.

Effective Communicator - Report findings through research in both oral and written

forms using group effort

Reflective Lifelong Learner - Be conscious of his/her social responsibility in the

application of his/her knowledge to financial management

decisions

- Develop an attitude of keeping abreast of the current

developments in the financial environment

- Maximize owners wealth with due respect to the rights of others.

COURSE OUTPUTS:

As evidence of attaining the above learning outcomes, the student is required to do and submit the following during the indicated dates of the term.

LEARNING OUTCOMES REQUIRED OUTPUTS DUE DATES

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1. Read and understand financial statements of the different traditional sectors in the financial services industry

2. Analyze modern financial institutions management from balance sheet presentations, management decision making and risk management approaches.

3. Describe how forces such as financial innovation, technology, taxation, and regulation can affect financial performance of various sectors in the financial services industry.

4. Report findings through research in both oral and written forms using group effort.

5. Develop an attitude of keeping abreast of the current developments

in the financial environment

1. a. Long Exams

b. Comprehensive Exam

2. a. Long Exams

b. Term/Project Paper c. Comprehensive Exam

3. a. Long Exams

b. Term/Project Paper

c. Comprehensive Exam

4. a. Group Presentation

b. Term/Project Paper

5. Term/Project Paper

4th , 7th, 9th, 11th and

13th weeks

15th week

4th , 7th, 9th, 11th and

13th weeks

14th week

15th week

4th , 7th, 9th, 11th and

13th weeks

14th week

15th week

4th , 6th, 8th, 10th, and

12th weeks

14th week

14th week

RUBRIC FOR ASSESSMENT:

CRITERIA EXEMPLARY

3.5 -4.0

SATISFACTORY

2.5 - 3.0

DEVELOPING

1.5 - 2.0

BEGINNING

0.0 - 1.0

Correct Conceptual and Quantitative solutions to questions and problems given in written exams

No major errors

and any minor

errors do not

violate principles;

Quantitative and

qualitative

analysis

persuasively

support the

recommendations and conclusions;

Conclusions and

recommendations are convincing.

Few minor errors

violate principles;

Quantitative and

qualitative

analysis logically

support the

recommendations and conclusions;

Conclusions and

recommendations are appropriate.

Some errors, but demonstrates understanding of principles; Quantitative and qualitative analysis is adequate

to make reasonable

conclusions and/or

recommendations;

Conclusions and

recommendations

are reasonable and

believable.

Frequent errors or

unacceptable

mistakes indicative

of a lack of basic

understanding of

core principle(s);

Quantitative and

qualitative analysis

too simplistic or

convoluted;

Conclusions and

recommendations are wrong or

implausible.

Clear and

Accurate

Group Oral

Presentations

Uses terms

correctly; Clearly

and accurately

interprets findings

and communicates

methods;

Demonstrates

Makes a few

minor errors in

using terms,

interpreting

findings, and/or

communicating

methods; Is at

ease with

Makes some

errors in using

terms,

interpreting

findings, and/or

communicating

methods; Is

uncomfortable

Frequently

misuses terms,

misinterprets

findings, and/or

miscommunicates

methods; Does not

have grasp of

information;

full knowledge

(more than

required) by

answering all class

questions with

explanations and

elaboration.

expected answers

to all questions,

but fails to

elaborate.

with information

and is able to

answer only

rudimentary

questions.

cannot answer

questions about

subject.

3

Quality Term

Papers Uses terms correctly; Clearly an accurately interprets findings and communicates methods; Contains little or

no grammar

and/or spelling

errors; Excellent

sentence structure

and fluency.

Makes a few minor errors in using terms, interpreting findings, and/or communicating methods; Contains a number of grammar and spelling errors;

Sentence

structure could

improve.

A few overlooked

errors in using

terms, interpreting

findings, and/or

communicating

methods; Contains

a few overlooked

grammar and

spelling errors.

Frequently misuses terms, misinterprets findings, and/or miscommunicates methods; Grammar and spelling errors are

commonplace

showing

carelessness.

ASSESSMENT/ EVALUATION:

Your final grade will be based on the results of 4 to 5 long exams, oral presentation, term paper, final exam, and class participation. The breakdown is approximately:

Long exams: 40%

Oral presentation: 10%

Term paper: 10%

Final exam: 30%

Class participation: 10%

LEARNING PLAN:

LEARNING

OUTCOMES

TOPICS WEEK

NOS./

# HRS.

LEARNING

ACTIVITIES

COURSE OVERVIEW AND REQUIREMENTS/

CLASSROOM POLICIES/GROUPINGS

Week 1

1.5 hrs.

3 & 5

INTRODUCTION

Getting a Grip on Financial Statements

Special Functions of Financial Institutions and their

Regulation (Chapter 1)

Week 2

1.5 hrs.

1.5 hrs.

Diagnostic

Exam;

Lecture

Readings;

Lecture

1,2

Holiday

Depository Institutions (Chapter 2)/ Banks Financial Statements and Analysis

Week 3

1.5 hrs.

Readings;

Lecture

3 & 5

4

Bank Sector Industry Performance & Trends

Group Report on Commercial Banks

Week 4 1.5 hrs 1.5 hrs.

Lecture

Research;

Oral

Presentation

1,2

LONG EXAM # 1

Insurance (Chapter 3)/Insurance Companies Financial Statements and Analysis

Week 5

1.5 hrs.

1.5 hrs.

Readings;

Lecture

3 & 5

4

Insurance Sector Industry Performance & Trends

Group Report on Insurance Companies

Week 6

1.5 hrs.

1.5 hrs.

Lecture

Research;

Oral

4

Presentation

1, 2

LONG EXAM # 2

Securities Brokerage and Investment Banking

(Chapter 4)/ Securities Firms and Investment Houses Financial Statements & Analysis

Week 7

1.5 hrs.

1.5 hrs.

Readings;

Lecture

3 & 5

Securities Brokerage and Investment House

Sector Industry Performance & Trends

Holiday

Week 8

1.5 hrs.

Lecture

4

Group Report on Securities Firms and Investment

Houses

LONG EXAM # 3

Week 9 1.5 hrs.

1.5 hrs.

Research;

Oral

Presentation

1,2

3 & 5

Mutual Funds and Hedge Funds (Chapter

5)/Mutual Fund Management Companies Financial Statements & Analysis

Mutual Fund Sector Industry Performance &

Trends

Week 10

1.5 hrs.

1.5 hrs.

Readings;

Lecture

Lecture

4

Group Report on Mutual Fund Management

Companies

LONG EXAM # 4

Week 11 1.5 hrs.

1.5 hrs.

Research;

Oral

Presentation

1, 2

3 & 5

Finance Companies (Chapter 6)/ Finance

Companies Financial Statements and Analysis

Finance Companies Sector Industry Performance

& Trends

Week 12 1.5 hrs.

1.5 hrs.

Readings;

Lecture

Lecture

4

Group Report on Finance Companies

LONG EXAM # 5

Week 13 1.5 hrs.

1.5 hrs.

Research;

Oral

Presentation

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MEASURING RISK

Interest Rate Risk (Chapters 8 & 9)

Credit Risk (Chapters 11 & 12)

Liquidity Risk (Chapter 17)

MANAGING RISK

Liability and Liquidity Management (Chapter 18)

Deposit Insurance and Liability Guarantees

(Chapter 19)

Week 14 1.5 hrs.

1.5 hrs.

Readings;

Lecture

Readings;

Lecture

2

Capital Adequacy (Chapter 20)

Submission of Term Papers/INTEGRATION

Week 15 1.5 hrs.

Lecture

TEXT / COURSE MATERIAL:

Saunders, A. & Cornett, M. M. (2011). Financial Institutions Management: A Risk Management Approach (7th ed.). New York: McGraw-Hill Co, Inc.

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REFERENCES:

Alexander, D., Britton, A. , Jorissen, A. (2013). International Financial Reporting and Analysis. (5th ed.). Singapore: Cengage Learning Asia Pte. Ltd.

Gibson, C. H. (2009). Financial Reporting and Analysis: Using Financial Accounting Information. (11th ed.). Ohio: South Western.

Kidwell, D. S., Blackwell, D. W., Whidbee, D. A., and Sias, R. W. (2013). Financial Institutions, Markets and Money. (11th ed.). Singapore: John Wiley & Sons

Rose, P. S. and Hudgins, S. C. (2013). Bank Management & Financial Services. (9th ed.). New York: McGraw-Hill

PREOFESSIONAL RESPONSIBILITIES:

1. General Behavior or Conduct

Students are expected to conduct themselves with respect and professionalism toward faculty, fellow students, and others present in class, and will follow the rules laid down by the instructor for classroom behavior. Cellphones should be turned off or placed in silent mode. Laptops are not allowed, unless specified that they are part of the activity to be used in class. All students are expected to partake in meaningful discussions in class as they are important to the learning process.

2. Assignments

Students are expected to come to class prepared, having read text and/or assigned readings prior to class. Homework, case studies, and other assignments, are expected to be completed and handed in on time. They should come to class prepared to discuss their analysis of the cases and problems.

3. Attendance

Class attendance is mandatory and absences may be excused only in the case of documented serious illnesses, or a family emergency. Students are expected to arrive to class on time and stay to the end of the class period. Chronically arriving late or leaving class early will have an impact on a student's performance. Students may enter class late only if given permission by the instructor and must do so without disrupting the class.

4. Academic Integrity

Integrity is critical to the learning process, and students agree to abide by the DLSU Student Code of Conduct. A student is therefore committed to exercise integrity in all aspects of one's academic work including, but not limited to, the preparation and completion of exams, papers and all other course requirements by not engaging in any method or means that provides an unfair advantage. He should clearly acknowledge the work and efforts of others when submitting written work as ones own. Ideas, data, direct quotations (which should be designated with quotation marks), paraphrasing, creative expression, or any other incorporation of the work of others should be fully referenced.

5. Group Projects

The class would be divided among five (5) groups of around the same number of members. Each group will choose among banks, insurance companies, securities firms and investment houses, mutual fund management companies and finance companies to work on, both in the oral presentation and term paper requirements. Financial statements of at least three companies across and at least the most recent three years would be analyzed, and compared against industry standards. The analysis should cover the relevant topics discussed during the course and the presentations will be handed in and presented during designated dates mentioned

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above. The groups are expected to give a background of the economic and current conditions of the industry, describe the strategies that each of the firms pursued, and perform a profitability and risk analysis. More details will be given as the trimester progresses. Due dates are given ahead of time and no late submission will be accepted, whether in hard copies or emailed.

Guidelines for Group Projects

Business activities involve group effort. Consequently, learning how to work effectively in a group is a critical part of your business education.

Every member is expected to carry an equal share of the groups workload. As such, it is in your interest to be involved in all aspects of the project. Even if you divide the work rather than work on each piece together, you are still responsible for each part. The group project will be graded as a whole: its different components will not be graded separately.

It is recommended that each group establish ground rules early in the process to facilitate your joint work including a problem-solving process for handling conflicts. In the infrequent case where you believe that a group member is not carrying out his or her fair share of work, you are urged not to permit problems to develop to a point where they become serious. If you cannot resolve conflicts internally after your best efforts, they should be brought to my attention and I will work with you to find a resolution. You will be asked to complete a peer evaluation form to evaluate the contribution of each of your group members (including your own contribution) at the conclusion of your project. If there is consensus that a group member did not contribute a fair share of work to the project, I will consider this feedback during grading.