Ratio financial analysis, Assignments of Financial Theory

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Program Associate Degree Program Credit Hours 3 Duration 16 Weeks / 32 sessions Prerequisites Financial Management

Financial Analysis

FIN-

Course Introduction: This course provides a foundation to help you understand various topics in Financial Analysis. A variety of learning materials and opportunities to practice basic concepts underlie the design of this course. You are encouraged to discover, collaborate and regulate learning at your own pace from multiple sources of information provided. A mix of individual and collaborative work will help you to take advantage of peer expertise so as to develop the skill to understand the fundamentals that underlie the field of finance. Course Objectives: The course is emphasized to familiarize students with the financial statements. They will know what various financial statements are and how to read and interpret them. This interpretation will enable students to take important business decisions in the practical field. Learning Outcomes: After studying this course you should be able to:  Understand the dynamic perspective of business system and nature of financial statements.  Understand the concept of funds and its cycle.  Assess business performance applying ratio analysis.  Understand and relate various analytical tools for decision making at all levels of business.  Analyze investment decisions to support cash flow generation and increasing shareholders wealth. Violation of Academic Honesty Policy: If any two projects / assignments are identical or partially identical, a zero will be awarded. The repetition of such kind may lead to an “F” grade in the course. How to Keep Your Professor Happy: Class attendance is mandatory. You may miss up to 6 class sessions. On the seventh absence, you will be withdrawn from the course. As a courtesy to the instructor and other students, be prepared to arrive at class and be in your seat on time. In addition, please note that each class lasts for 90 minutes. Also keep in mind some general rules as given below:  Cell phones should be powered off.  Eatables are not allowed in the class.  The teacher will not tolerate any disruptive behavior in the class.  The Dress Code has to be observed, no warnings will be given, and violators will be asked politely to leave the class and consequently will be marked absent.

 The cash cycle  Measures of liquidity-long and short analysis 6 Liquidity  Short term liquidity measures  Current ratio  Quick ratio  Working capital to sales ratio Quiz- 7 Financial Strength  Interest cover  ‘Debt to equity’ ratio (D/E)  Leverage 8 Cash Flow  The cash flow statement  Sources and uses of funds – methods  Opening and closing cash reconciliation  Financial reporting standards MID TERM 10 Corporate Valuation  Introduction  Shared values Financial leverage and corporate valuation  Financial leverage  V chart  Market to book ratio 11 Growth  Growth  Analysis  Growth equilibrium  Application to acquisitions Assignment- 12 Cost, Volume, and Price Relationships  Costing illustration  Contribution  Break-even (B/E)  Contribution to sales percentage Quiz- 13 Investment Ratios  Project appraisal-the problem  Project appraisal-steps to a solution  Project appraisal-present value (PV)  Project appraisal-internal rate of return Assignment- 14 Shareholder Value Added (SVA)  Description  Approach to valuation  Value for the equity shareholders  Discount factor  Terminal (continuing) value Quiz- 15 Acquisition Analysis  Financial profile of Alpha Inc.

 Financial profile of Beta Inc.  Acquisition impact on EPS  Shareholder effects-generalized  Relative versus absolute values 16 Integrity of Accounting Statements  Where we focus attention  Operating revenue enhancement  Revenue enhancement- clues for detection  Methods of revenue enhancement-fictitious sales Project Presentation FINAL EXAM