FINANCIAL REPORTING AND PERFORMANCE MEASUREMENT

This course focuses on financial statement analysis, which allows for performing a firm's fundamental analysis. Fundamental analysis is a method of measuring a security's intrinsic value by examining related economic and financial factors.

Students should have a good understanding of financial accounting and related statements: balance sheet, income statement, and cash flow.

By the end of the course, you should have a basic understanding of how to (1) read and reclassify financial statements; (2) analyze financial statements and interpret ratios, and then assess firm performance; (3) perform firm valuation and forecasting.

The course focuses on the following topics: • Introduction to financial statements and valuation; • The reformulation and analysis of shareholders' equity, balance sheet, income statement and cash flow; • The analysis of profitability and credit risk; • Valuation methods; • Valuing intangible assets; • Accounting quality; • Measuring corporate social performance.

Financial Statement Analysis and Security Valuation–by Stephen N. Penman, Fifth Edition, McGraw Hill International Edition; ISBN: 978-007-132640-7. Financial Statement Analysis for Value Investing Stephen Penman and Peter F. Pope Columbia Business School Publishing PUB DATE: April 2025 ISBN: 9780231215688

Teaching and learning consist of the following: (1) in-class activities: lectures, exercises, and case discussions; and (2) out-of-class activities, including independent reading of the textbook, exercises, and case preparation.

The student evaluation system adopted by the Graduate School consists of continuous assessment, designed to monitor progressive learning during the semester, and a final exam. Students are evaluated based on 31 points as it follows: i) Class participation 5% ii) Team project work 25% iii) Final exam 70%

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