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Faculty of Management, Economics and Social SciencesProfessorship of Empirical Accounting

Financial Statement Analysis

 

Current Note

Please write a short email to the lecturer to receive the login information for this course!

 
Course Description

The bachelor course Financial Statement Analysis (lecture with tutorial) introduces students to the most importance challenges and techniques of (internal) disclosure management and (external) analysis of financial and non-financial reports. Thereby, the course Financial Statement Analysis

  • provides an overview of legal flexibility in financial reports provided in line with national and international reporting standards (e.g., accounting choices and options in International Financial Reporting Standards),
  • introduces students to classic techniques of accounting analysis (e.g., calculation and comparison of meaningful business indicators),
  • makes students familiar with the important opportunities of digitalized reporting tools and automatized analytic procedures (e.g., use of network-based text processing software) and the risks of artificial decision making, and
  • enables students to ethically and morally evaluate corporate reporting decisions.

 

Agenda of the Course

The purpose of this course is to advance the students' understanding of the principles of financial and non-financial reporting standards and to make them familiar with how reporting flexibility can be used to reach corporate targets. With a strong practical emphasis, the students learn how sophisticated stakeholders acquire, proceed, and evaluate financial and non-financial information to create a meaningful basis for their decision-making. Building on accounting, economic, and finance skills, the students assess managerial incentives for earnings management, examine analytical tools to uncover manipulations, and discuss breaking challenges of business analysis. The course is structured as follows.

  • Big topic 1: Values, valuation, sustainability, and digital transformation
  • Big topic 2: Financial and non-financial reporting principles
  • Big topic 3: Corporate and managerial reporting incentives
  • Big topic 4: Techniques of impression management
  • Big topic 5: Techniques of financial statement analysis
  • Big topic 6: Extensive case study for the automotive industry

 

Key Facts, Admission, and Examination

  • From the summer semester 2020 onwards, this course is provided in a blocked online-only format at the beginning of each semester (e.g., in the winter semester 2020/2021 already starting on October 1, 2020).
  • The entire course (incl., all course materials) is conducted in English.
  • Incoming students are warmly welcome to this course. Please closely follow the instructions of the incoming student office to register for this course and the final written exam (typically, these are two different steps).
  • Registration for the final exam only via KLIPS.
  • No limitation of the number of participants.
  • The course ends with a final written exam of 60 minutes which is included in the 120 minutes exam of the module Accounting and Taxation II.
  • The exams of prior cohorts of students are available for all participants of the course.

 

Integration in the Module Accounting and Taxation II

The course is integrated in the bachelor level module Accounting and Taxation II which is jointly offered by three professorships of the Area Accounting and Taxation. Cologne students are obligated to vote two out of six possible courses of this module:

  • Business Taxation and Financial Decisions
  • Financial Statement Analysis
  • Fundamentals in International Accounting
  • Fundamentals in International Taxation
  • Steuerverfahrensrecht
  • Unternehmensbesteuerung

To participate in the course Financial Statement Analysis, students need a sound background on financial accounting (e.g., competences related to International Financial Reporting Standards) and corporate governance (e.g., competences related to legal structures and procedures of corporations and auditing). Experiences from prior cohorts of students suggest that the course Financial Statement Analysis particularly fits to the course Fundamentals in International Accounting. Student evaluations for this course from the previous semesters are available here.

 

Timetable for the Winter Semester 2020/2021

In the winter semester 2020, the course Financial Statement Analysis is offered by the Professorship of Empirical Accounting in an online-only format at the beginning of the semester. Further details are available in KLIPS. Please note the following timetable.

Session Day Date Room Time
Introduction Th October 01, 2020 Online 08.15 to 12.00
1 Fr October 02, 2020 Online 08.15 to 12.00
2 Mo October 05, 2020 Online 08.15 to 12.00
3 Tu October 06, 2020 Online 08.15 to 12.00
4 We October 07, 2020 Online 08.15 to 12.00
5 Th October 08, 2020 Online 08.15 to 12.00
6 Fr October 09, 2020 Online 08.15 to 12.00
7 Sa October 10, 2020 Online 08.15 to 12.00
8 Mo October 12, 2020 Online 08.15 to 12.00
9 Tu October 13, 2020 Online 08.15 to 12.00
10 We October 14, 2020 Online 08.15 to 12.00
Revision --- December 2020 Online ---
Exam --- December 2020 Online ---

 

Slights, Videos, and Additional Documents

The following section (temporarly) provides the slights of the 50 separate units of the course Financial Statement Analysis in the winter semester 2020. Later, all course douments are available for download in the ILIAS section of the course. For the first course day, October 01, 2020 (Thursday), the following introductory slights are needed:

  • Unit 01 - Motivation and objectives of the course
  • Unit 02 - Organization of the course
  • Unit 03 - Exam and examination training
  • Unit 04 - Introduction to case studies

For October 02, 2020 (Friday), please watch the following videos:

  • Unit 05 - Corporate reporting and global megatrends
  • Unit 06 - Corporate sustainability

For October 05, 2020 (Monday), please watch the following videos:

  • Unit 07 - Firm valuation - Values and valuation
  • Unit 08 - Firm valuation - Multiples valuation
  • Unit 09 - Firm valuation - Discounted cash flow valuation
  • Unit 10 - Firm valuation - Residual income valuation
  • Unit 11 - Firm valuation - Cash flow forecasting
  • Unit 12 - Firm valuation - Cost of equity forecasting

For October 06, 2020 (Tuesday), please watch the following videos:

  • Unit 13 - Corporate governance - Agency conflicts
  • Unit 14 - Corporate governance - Elements and functions
  • Unit 15 - Corporate governance - Understanding of corporate governance
  • Unit 16 - Corporate governance - International corporate governance
  • Unit 17 - Digital transformation - Overall developments
  • Unit 18 - Digital transformation - Data sources
  • Unit 19 - Digital transformation - Data mining and artificial intelligence

For October 07, 2020 (Wednesday), please watch the following videos:

  • Unit 20 - Statistic-based decision making - Population, sample, and data
  • Unit 21 - Statistic-based decision making - Hypothesis testing
  • Unit 22 - Statistic-based decision making - Spectrum of statistical analyses
  • Unit 23 - Investing and financial markets - Risk and return
  • Unit 24 - Investing and financial markets - Information content
  • Unit 25 - Investing and financial markets - Derivatives and hedging

For October 08, 2020 (Thursday), please watch the following videos:

  • Unit 26 - Corporate reporting - Purposes
  • Unit 27 - Corporate reporting - Bases for preparation
  • Unit 28 - Corporate reporting - Measurement concepts
  • Unit 29 - Corporate reporting - Position reporting
  • Unit 30 - Corporate reporting - Performance reporting
  • Unit 31 - Corporate reporting - Segment reporting

For October 09, 2020 (Friday), please watch the following videos:

  • Unit 32 - Reporting incentives - Definitions and overview
  • Unit 33 - Reporting incentives - Overall incentives
  • Unit 34 - Reporting incentives - Corporate incentives
  • Unit 35 - Reporting incentives - Management incentives
  • Unit 36 - Reporting incentives - Ethical considerations

For October 10, 2020 (Saturday), please watch the following videos:

  • Unit 37 - Techniques of impression management - Overall types
  • Unit 38 - Techniques of impression management - Basic reporting decisions
  • Unit 39 - Techniques of impression management - Reporting frequency decision
  • Unit 40 - Techniques of impression management - Real activities manipulations

For October 12, 2020 (Monday), please watch the following videos:

  • Unit 41 - Techniques of impression management - Manipulation of investment property
  • Unit 42 - Techniques of impression management - Manipulation of intangible assets
  • Unit 43 - Techniques of impression management - Manipulation of inventories
  • Unit 44 - Techniques of impression management - Manipulation of provisions
  • Unit 45 - Techniques of impression management - Presentation manipulations

For October 13, 2020 (Tuesday), please watch the following videos:

  • Unit 46 - Classic financial statement analysis - Process and preparation of information
  • Unit 47 - Classic financial statement analysis - Investing analyses
  • Unit 48 - Classic financial statement analysis - Financing analyses
  • Unit 49 - Classic financial statement analysis - Liquidity analyses
  • Unit 50 - Classic financial statement analysis - Performance analyses

On October 14, 2020 (Wednesday), we will work through several prior exams of the course Financial Statement Analysis (i.e., the exams of the summer semester 2018 and of the summer semester 2019).