Financial statement Analysis –
Aantekeningen
Tentamen online → open boek tentamen
First exam is easier, resit is harder
Inhoud
Week 1: Framework and Strategy Analysis ............................................................................................. 2
Lecture 1: Frame work and Strategy Analysis (Chapter 1 and 2) ........................................................ 2
Week 2: Accounting Analysis................................................................................................................... 5
Lecture 2: Accounting Analysis (Chapter 3 and 4)............................................................................... 5
Week 3: Financial Analysis ...................................................................................................................... 9
Lecture 3: Financial Analysis (Chapter 5) ............................................................................................ 9
Week 4: Prospective Analysis – Forecasting ......................................................................................... 17
Lecture 4: Prospective Analysis – Forecasting (Chapter 6) ............................................................... 17
Week 5: Prospective Analysis – Business Valuation.............................................................................. 19
Lecture 5: Prospective Analysis – Business Valuation (Chapter 7 and 8) .......................................... 19
Week 6: Equity security Analysis and Credit Analysis ........................................................................... 25
Lecture 6: Equity Security Analysis and Credit Analysis (Chapter 9 and 10) ..................................... 25
1
,Week 1: Framework and Strategy Analysis
Lecture 1: Frame work and Strategy Analysis (Chapter 1 and 2)
SEC = security exchange commission
Auditors scandals → Arthur Andersen – Lehman brothers
Chapter 1: A framework for business analysis and valuation using financial statements
Financial statement analysis: (components)
1. Business analysis using financial statements
2. Valuation
Purpose/doel:
- Security analysis
- Credit analysis
- Merger and acquisitions analysis
- General business analysis
- Audit risk analysis
The function of capital markets
Problems:
- Information asymmetry;
- Incentive problems;
- Expertise asymmetry.
2
,From business activities to financial statements:
US ues US GAAP not IFRS
➔ Report in US general Accepted accounting principals
IFRS is principal standard
In every financial statement you need to make choices
That is because there is opportunity to make manipulations errors
Product of financial reporting:
- Managers have superior information on business activities and are the prepare of financial
statements;
- Unique source of public data.
But,
- Noise from estimation errors
- Managers may have personal interests which differ from the one of other stakeholders
(Jensen and Meckling, 1976).
3
, Figuur 1.3 Analysis using financial statements
1. Business strategy analysis
2. Accounting analysis
3. Financial analysis
4. Prospective analysis
Chapter 2: Strategy analysis
Cost leadership differentiation (Ferrari)
- Low costs - unique products
4
Aantekeningen
Tentamen online → open boek tentamen
First exam is easier, resit is harder
Inhoud
Week 1: Framework and Strategy Analysis ............................................................................................. 2
Lecture 1: Frame work and Strategy Analysis (Chapter 1 and 2) ........................................................ 2
Week 2: Accounting Analysis................................................................................................................... 5
Lecture 2: Accounting Analysis (Chapter 3 and 4)............................................................................... 5
Week 3: Financial Analysis ...................................................................................................................... 9
Lecture 3: Financial Analysis (Chapter 5) ............................................................................................ 9
Week 4: Prospective Analysis – Forecasting ......................................................................................... 17
Lecture 4: Prospective Analysis – Forecasting (Chapter 6) ............................................................... 17
Week 5: Prospective Analysis – Business Valuation.............................................................................. 19
Lecture 5: Prospective Analysis – Business Valuation (Chapter 7 and 8) .......................................... 19
Week 6: Equity security Analysis and Credit Analysis ........................................................................... 25
Lecture 6: Equity Security Analysis and Credit Analysis (Chapter 9 and 10) ..................................... 25
1
,Week 1: Framework and Strategy Analysis
Lecture 1: Frame work and Strategy Analysis (Chapter 1 and 2)
SEC = security exchange commission
Auditors scandals → Arthur Andersen – Lehman brothers
Chapter 1: A framework for business analysis and valuation using financial statements
Financial statement analysis: (components)
1. Business analysis using financial statements
2. Valuation
Purpose/doel:
- Security analysis
- Credit analysis
- Merger and acquisitions analysis
- General business analysis
- Audit risk analysis
The function of capital markets
Problems:
- Information asymmetry;
- Incentive problems;
- Expertise asymmetry.
2
,From business activities to financial statements:
US ues US GAAP not IFRS
➔ Report in US general Accepted accounting principals
IFRS is principal standard
In every financial statement you need to make choices
That is because there is opportunity to make manipulations errors
Product of financial reporting:
- Managers have superior information on business activities and are the prepare of financial
statements;
- Unique source of public data.
But,
- Noise from estimation errors
- Managers may have personal interests which differ from the one of other stakeholders
(Jensen and Meckling, 1976).
3
, Figuur 1.3 Analysis using financial statements
1. Business strategy analysis
2. Accounting analysis
3. Financial analysis
4. Prospective analysis
Chapter 2: Strategy analysis
Cost leadership differentiation (Ferrari)
- Low costs - unique products
4
