Financial Statement Analysis
Barbara Sveva Magnanelli
Financial Statement Analysis
Class #01
Introduction to the course
Practical information
Classes
Tuesday – on site (GROUPS)
Thursday – on site
Friday – online
Office hours and contact details
Barbara Sveva Magnanelli
[email protected] • Virtual meetings by appointment, please send an email to the Professor
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Practical information
Teaching Assistants’ contact details:
• Virtual meetings by appointment in case you need office hours
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Educational material
Advised Book
• 4, 5, 6(PHP) Palepu, K.G., Healy P.M., Peek, E. (2019), Business Analysis and Valuation: IFRS Edition,
Cengage Learning (5th Edition) – Chapter 1
• (P) Penman, S.H. (2018), Financial Statement Analysis and Security Valuation, McGraw-Hill (5°, Edition –
International Edition) - Chapters 1, 3, 5 and 14
• (HW) Hawawini, G., Viallet, C. (2019), Finance for Executives, Cengage Learning (6th Edition) , Chapters
You can find the selected chapters of the textbook into two custom publications.
Chapter 1 of the (PHP) book and Chapters 4, 5, and 6 of the (HW) book are available only as ebook
from the following link: https://www.cengagebrain.co.uk/shop/isbn/9781473776364
The chapters of the (P) (2018 Edition) are available in several bookshops near the university campus
and in the main ecommerce websites. The bookshops are Libreria DIAS - Viale Ippocrate, 103/105;
Libreria La Sapienza - Viale Ippocrate, 158; Il mercatone del libro - Via Giovanni, Mingazzini, 1; and La
libreria SRLS - Viale Ippocrate, 99.
In addition to the textbook, in the Luiss Learn platform you will find the slides, and the exercise book.
The availability of additional materials will be announced during classes.
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Teaching method
Theory Sessions: focus on the main concepts and elements on financial
statement analysis. The aim of the sessions is to study together basic
concept of financial statement analysis and security valuation.
From Theory to practice sessions: we emphasize practical activities through
exercises and case studies. During these sessions you are encouraged to
engage in discussions with professor.
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Your takeaways
The course is about financial statement analysis with emphasis on valuation
Financial Statement Analysis
How does ratio analysis help in valuation
How does profitability tie into valuation
How does one analyze the quality of financial reports
How does one deal with the accounting methods used in financial statements
How is financial analysis developed for strategy and planning
How are fundamental values (or “intrinsic values”) estimated
How are business strategies analyzed in order to understand the value they create
What business activities determine value
How does one pull apart the financial statements to get at the relevant information for
valuing equities
How is “value created for shareholders” identified
What is the relevance of cash-flows, of dividends, of earnings, of book values
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Your takeaways
Application
Corporate Strategy
Merger and Acquisition
Buyouts and Spinoff
Restructurings
Capital Budgeting
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Assessment method
Students have to attend classes. Attendance is mandatory.
students are required to prepare and discuss a project work.
The Professor will create the groups within the first 3 weeks of classes.
Groups are formed choosing students randomly
The project is mandatory, thus it is part of the final grade.
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Assessment method
Students are evaluated on the basis of 32 points, provided as follows:
• Written examination weights 65% (counting 21/32 points)
• Project Work weights 35% (counting 11/32 points). In the group project
evaluation, Peer evaluation of the teams will be also conducted, and it will
count for the individual project work evaluation.
the project concerns financial analysis and requires tools developed
during the course. It will be done in groups from 7 to 9 students chosen
by the Professor
All groups have to be prepared to present the project to the class
because the best project will be asked to do so and will get 1 extra
points that will be added to the total final grade.
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