Fundamentals of Financial Statement Analysis and Business Ethical Standards
Lecture: Assistant Professor Han Jun
COURSE OBJECTIVE
This course provides an introduction to the fundamental concepts and techniques related
to financial statements analysis. After this course, you are expected to be able to:
1. Identify useful financial information and correctly interpret the information;
2. Get a comprehensive understanding of how the accounting information is
prepared and disclosed and the accounting rules governing the production and
disclosure of the information;
3. How to read and interpret financial statements and the interrelationships of the
line items of the financial statements;
4. Make necessary adjustments to make the accounting information better reflect the
firm’s economic performance, and to enhance the time-series and cross-sectional
comparability of financial statements;
5. Understand the role of financial statement analysis in evaluating the historical
performance of firms, in predicting the future performance of firms, and in
valuating firms;
6. Being equipped with professional ethical standards.
TEXTBOOKS：
1. White, G.I., Sondhi, A.C., and Fried, D., The Analysis and Use of Financial
Statements, (3rd Edition), 2003, John Wiley & Sons, Inc. (WSF)
2. Associate for Investment Management and Research (AIMR), Standards of Practice Handbook, (8th Edition), 1999.
Performance Evaluation
Class Participation 10%
Group Project 40%
Final Exam 50%
Total 100%
Syllabus
The course consists of following parts:
Part One: Overview (Week 1& 2)
? Financial Reporting Framework (WSF Chapter 1)
? Principal Financial Statements (WSF Chapter 2 & 3)
? Ratio Analysis (WSF Chapter 4)
Part Two: Analysis of Assets (Week 3)
? Analysis of Inventories (WSF Chapter 6)
? Analysis of Long-Lived Assets (WSF Chapter 7 & 8)
Part Three: Analysis of Liabilities and Equities (Week 3 & 4)
? Analysis of Income Tax Liabilities (WSF Chapter 9)
? Analysis of On-Balance-Sheet Finance Liabilities (WSF Chapter 10)
? Analysis of Leases and other Off-Balance-Sheet Liabilities (WSF Chapter 11)
? Analysis of Derivatives and Hedging Activities (WSF Chapter 16)
? *Analysis of Pensions and Other Employee Benefits (WSF Chapter 11; optional,
possibly not covered)
Part Four: Other Topics (Week 5 & 6)
? Intercorporate Investments (WSF Chapter 13)
? Business Combinations (WSF Chapter 14)
? *Multinational Operations (WSF Chapter 15; optional, possibly briefly covered)
Part Five: Synthetic Analysis (Week 6)