- Class Number 4930
- Term Code 3030
- Class Info
- Unit Value 6 units
- Mode of Delivery Online
- Dr Mark Wilson
- Dr Mark Wilson
- Class Dates
- Class Start Date 24/02/2020
- Class End Date 05/06/2020
- Census Date 08/05/2020
- Last Date to Enrol 02/03/2020
This is an intermediate course which examines the analysis of financial information presented in firms’ financial reports. The course comprises three related sections: fundamental analysis; valuation; and, the application of fundamental analysis and valuation techniques to a variety of specific decisions. Fundamental analysis involves answering questions such as: how is the firm performing? how might the firm perform in the future? what risks does the firm face? In addressing these issues particular attention is paid to the impact of financial reporting choices on the relation between reported earnings and firms’ underlying economic performance. Valuation describes the methods by which our expectations of firms’ future performance may be converted to a present day value of the firm’s assets, and the various financial claims on those assets. The final section of the course provides an introductory coverage to issues such as equity security analysis and credit analysis, with a strong emphasis on the use of financial statement data for these purposes.
Upon successful completion, students will have the knowledge and skills to:On successful completion of the course you should be able to:
1. Describe and apply basic and intermediate level techniques of financial statement analysis;
2. Explain the relationship between strategic business analysis, accounting analysis and financial analysis;
3. Identify and utilise value-relevant information contained within financial statements;
4. Recognise and explain the fundamental role of accounting numbers in the valuation of entities and the key financial claims on these entities assets (equity and debt securities);
5. Understand and critically evaluate the impact of financial reporting choices on the usefulness of reported earnings to predict future performance;
6. Prepare a written analysis and valuation of a listed company, which incorporates and synthesises the strategic, accounting and financing techniques covered in the course;
7. Conduct applied business research (including locating, critically interpreting and evaluating firm-specific financial information);
8. Work effectively in a team environment.
The overall syllabus, and specific teaching materials draw directly on several of the convenor’s research specialisations, particularly the associations between financial reporting decisions, security analyst reports and the valuation of listed companies.
Examination Material or equipment
Palepu, K. G., P. M. Healy, S. Wright, M. Bradbury, P. Lee, Business Analysis and Valuation Using Financial Statements: Text and Cases, Asia Pacific Edition, 2nd Edition, Cengage Learning, 2015.
Students are expected to have access to a copy of the prescribed book for the duration of the semester. The book can be purchased from the on campus bookshop, with a small number of copies also available for 2 hour loan in the reserve loan section of the Chifley Library. The Library will also purchase an e-book version for short-term loan. This may not be available at the commencement of the course, but will become available during the first few weeks
Additional materials, including analyst reports, book chapters and journal articles will be made available via the course website.
Details of prescribed tutorial questions and cases and other required readings will be made available on the course website at least one week in advance of the first tutorial in which those materials will be considered.
TECHNOLOGY, SOFTWARE, EQUIPMENT
You will be required to use MS-Word and MS-Excel in completing the requirements of this course. You will also need to use some of the ANU’s electronic library resources, including Morningstar DatAnalysis Premium, to obtain current and historical financial statement data. DatAnalysis Premium can be accessed from any computer within the ANU network (or via reverse proxy login) at:
(Please note: if you have problems using the above URL, you can find the current URL by browsing through the ANU Library's list of E-resources)
You are strongly advised to make yourself familiar with the DatAnalysis Premium website as early in the course as possible. The ANU Library also hosts a number of search engines with which you may identify literature relevant to your written assignment (see below).
Students will be given feedback in the following forms in this course:
- Verbal (in consultation with teaching staff)
- Written (via email, forum postings and automated responses to online quiz questions)
ANU is committed to the demonstration of educational excellence and regularly seeks feedback from students. Students are encouraged to offer feedback directly to their Course Convener or through their College and Course representatives (if applicable). The feedback given in these surveys is anonymous and provides the Colleges, University Education Committee and Academic Board with opportunities to recognise excellent teaching, and opportunities for improvement. The Surveys and Evaluation website provides more information on student surveys at ANU and reports on the feedback provided on ANU courses.
There will be one 2-hour lecture/workshop per week. The lecture/workshop will typically include both a lecture component and time devoted to the discussion of a prescribed ‘tutorial-style’ question (usually a core practical question). The 2-hour lecture/workshop will be recorded and the recording made available on the course Wattle website.
For Weeks 2 through 12 inclusive, there will be a set of tutorial-style questions made available on Wattle. While there will not be any 'on-line' live tutorials conducted in the remote offering of this course, each week a video recording of one tutorial conducted on the ANU campus will be made available on Wattle. Guideline solutions for practical (i.e. quantitative) tutorial and workshop solutions will be made available on Wattle. If, after watching the video recording of the on-campus tutorial, and viewing the solutions to practical questions, you still have queries regarding the tutorial you are welcome to email the course convenor or tutors. Each week, we will also open a discussion forum on Wattle in which you can discuss problems with your peers. At the end of each week the Convenor will review the discussion forum and may make comment on common themes or problems identified in student postings.
This course uses the ANU’s Wattle system for delivery of all on-line course materials. Students are expected to check the course Wattle site at least weekly. Copies of lecture slides will be made available on the course website, normally in advance of the lecture date. Guideline solutions for practical (i.e. quantitative) tutorial and workshop solutions will be made available in the week following that in which the tutorial/workshop was completed. ‘Solutions’ for theoretical tutorial and workshop questions will not be provided, but discussion of the relevant issues will be available in the video recording of the weekly on-campus tutorial.
As a further academic integrity control, students may be selected for a 15 minute individual oral examination of their written assessment submissions.
Any student identified, either during the current semester or in retrospect, as having used ghost writing services will be investigated under the University’s Academic Misconduct Rule.
Email and Forums on the Wattle Course Website
Email and the Wattle course website are the preferred ways of communication. Student forums are set up on Wattle for each topic and can be viewed by all enrolled students and teaching staff. Students are encouraged to post any questions they have in the appropriate forum.
If necessary, the lecturer and tutors for this course will contact students on their official ANU student email address. Students should use this email address when contacting staff as spam filters used by ANU may not allow other email addresses to be received. Information about your enrolment and fees from the Registrar and Student Services' office will also be sent to this email address.
Students are expected to check the Wattle site for announcements about this course, e.g. changes to timetables or notifications of cancellations. Notifications of emergency cancellations of lectures or tutorials will be posted on the door of the relevant room.
|Week/Session||Summary of Activities||Assessment|
|1||Framework for Analysis & Revision of Financial Reporting Essentials Valuation Theory and Concepts: Introduction to Discounted Cash Flow Approaches Text: Ch.1, Ch. 7|
|2||Strategy Analysis: How strong are the competitive forces affecting a firm’s future profit and position? Text: Ch. 2||Non-assessable Quiz 1 available on Wattle. Feedback will be available immediately after completing the quiz. You are encouraged to complete the quiz before 3 April 2020, however the quiz will remain available on Wattle throughout the semester and can be attempted as many times as you like.|
|3||Introduction to Accounting Analysis: Revision of Basics; Impact of Accounting Discretion on Reporting Quality Text: Ch. 3, Ch. 12|
|4||Implementing Accounting Analysis : Re-Casting Financial Statements (lecture slides provided, no ‘live’ lecture) Adjusting Financial Statements Text: Ch. 4, Ch. 5|
|5||Financial Analysis – I De-composing ROE to better understand sources of profitability Text: Ch. 4, Ch. 5||Non-assessable Quizzes 2 and 3 available on Wattle. Feedback will be available immediately after completing each quiz. You are encouraged to complete the quizzes before 3 April 2020, however the quizzes will remain available on Wattle throughout the semester and can be attempted as many times as you like.|
|6||Financial Analysis – II Analysis of Asset Management and Leverage; Cash Flow Analysis Text: Ch. 5, Ch. 9|
|7||Forecasting Future Performance and Position: Using what we have learned in the topics above to predict future sales, profits, assets, and financing requirements. Text: Ch. 6|
|8||Valuation Implementation – Applying Forecasts from Topic 7 to value the firm using a) Discounted Free Cash Flows, b) Discounted Abnormal Earnings, and c) Discounted Abnormal ROE. Text: Ch. 8|
|9||Using Prices to Infer Market Expectations of Growth; Evaluating Mergers and Acquisitions and IPOs Text: Ch. 10, Ch. 11|
|10||Application of FSA to Equity Analysis; Accounting-related stock market ‘anomalies’ Text: Ch. 9|
|11||Using Financial Statement Data to Assess Creditworthiness Text: Ch. 10|
|12||Valuation Methods Workshop and Course Synthesis|
|Assessment task||Value||Learning Outcomes|
|Non-Assessable Quizzes||0 %|
|Final Exam||100 %||1,2,3,4,5,6,7,8|
* If the Due Date and Return of Assessment date are blank, see the Assessment Tab for specific Assessment Task details
ANU has educational policies, procedures and guidelines, which are designed to ensure that staff and students are aware of the University’s academic standards, and implement them. Students are expected to have read the Academic Misconduct Rule before the commencement of their course. Other key policies and guidelines include:
The ANU is using Turnitin to enhance student citation and referencing techniques, and to assess assignment submissions as a component of the University's approach to managing Academic Integrity. For additional information regarding Turnitin please visit the ANU Online website. In rare cases where online submission using Turnitin software is not technically possible; or where not using Turnitin software has been justified by the Course Convener and approved by the Associate Dean (Education) on the basis of the teaching model being employed; students shall submit assessment online via ‘Wattle’ outside of Turnitin, or failing that in hard copy, or through a combination of submission methods as approved by the Associate Dean (Education). The submission method is detailed below.
Moderation of Assessment
Marks that are allocated during Semester are to be considered provisional until formalised by the College examiners meeting at the end of each Semester. If appropriate, some moderation of marks might be applied prior to final results being released.
Details regarding materials and equipment that is permitted in an examination room can be found on the ANU website:
Information regarding permitted examination materials for the course will be available on the examination timetable website when the examination timetable is released:
Assessment Task 1
Three quizzes will be made available on Wattle during the first five weeks of semester (see the Class Overview for details of availability of each quiz). These quizzes carry a 0% assessment weighting (i.e. they do not affect your final grade for the course), but represent an opportunity for you to obtain feedback regarding your understanding of key issues introduced in the early part of this course. You will receive feedback immediately upon completing each quiz, and may attempt each quiz as many times as you like throughout the semester.
Assessment Task 2
Learning Outcomes: 1,2,3,4,5,6,7,8
Centrally administered examinations through Examinations, Graduations & Prizes will be timetabled prior to the examination period. The due date listed in the assessment summary is the earliest possible date. Please check ANU Timetabling for further information. Exam scripts will not be returned. Students may review their exam scripts by appointment during scheduled sessions at the RSA School Office.
The final examination will be of ‘closed-book’ format. It is a 3-hour exam plus 15 minutes reading time. The only material permitted (other than pens and pencils etc) is a non-programmable calculator.
All topics are examinable. Further details will be available prior to the end of the teaching period.
Students should also be aware that misconduct (e.g. plagiarism) in any item of assessment could lead to a fail for the course.
Academic integrity is a core part of the ANU culture as a community of scholars. At its heart, academic integrity is about behaving ethically, committing to honest and responsible scholarly practice and upholding these values with respect and fairness.
The ANU commits to assisting all members of our community to understand how to engage in academic work in ways that are consistent with, and actively support academic integrity. The ANU expects staff and students to be familiar with the academic integrity principle and Academic Misconduct Rule, uphold high standards of academic integrity and act ethically and honestly, to ensure the quality and value of the qualification that you will graduate with.
The Academic Misconduct Rule is in place to promote academic integrity and manage academic misconduct. Very minor breaches of the academic integrity principle may result in a reduction of marks of up to 10% of the total marks available for the assessment. The ANU offers a number of online and in person services to assist students with their assignments, examinations, and other learning activities. Visit the Academic Skills website for more information about academic integrity, your responsibilities and for assistance with your assignments, writing skills and study.
There are no assessable assignments in this course. Your non-assessable assignments comprise quizzes that are available on the course Wattle site.
Late submission of assessment tasks without an extension are penalised at the rate of 5% of the possible marks available per working day or part thereof. Late submission of assessment tasks is not accepted after 10 working days after the due date, or on or after the date specified in the course outline for the return of the assessment item. Late submission is not accepted for take-home examinations.
Accepted academic practice for referencing sources that you use in presentations can be found via the links on the Wattle site, under the file named “ANU and College Policies, Program Information, Student Support Services and Assessment”. Alternatively, you can seek help through the Students Learning Development website.
There are no assessable assignments in this course.
Extensions and Penalties
Extensions and late submission of assessment pieces are covered by the Student Assessment (Coursework) Policy and Procedure. Extensions may be granted for assessment pieces that are not examinations or take-home examinations. If you need an extension, you must request an extension in writing on or before the due date. If you have documented and appropriate medical evidence that demonstrates you were not able to request an extension on or before the due date, you may be able to request it after the due date.
Resubmission of Assignments
There are no assessable assignments in this course.
Distribution of grades policy
Academic Quality Assurance Committee monitors the performance of students, including attrition, further study and employment rates and grade distribution, and College reports on quality assurance processes for assessment activities, including alignment with national and international disciplinary and interdisciplinary standards, as well as qualification type learning outcomes.
Since first semester 1994, ANU uses a grading scale for all courses. This grading scale is used by all academic areas of the University.
Support for students
The University offers students support through several different services. You may contact the services listed below directly or seek advice from your Course Convener, Student Administrators, or your College and Course representatives (if applicable).
- ANU Health, safety & wellbeing for medical services, counselling, mental health and spiritual support
- ANU Diversity and inclusion for students with a disability or ongoing or chronic illness
- ANU Dean of Students for confidential, impartial advice and help to resolve problems between students and the academic or administrative areas of the University
- ANU Academic Skills and Learning Centre supports you make your own decisions about how you learn and manage your workload.
- ANU Counselling Centre promotes, supports and enhances mental health and wellbeing within the University student community.
- ANUSA supports and represents undergraduate and ANU College students
- PARSA supports and represents postgraduate and research students
Mark Wilson is an Associate Professor in the Research School of Accounting at the ANU. His research interests include accounting, economic and business history, earnings quality, and the response of markets and securities analysts to financial reporting information. He has published in leading journals, including Contemporary Accounting Research, Auditing: A Journal of Practice and Theory, Accounting and Business Research, the Journal of Management Information Systems, the Journal of Business Ethics and Abacus. Mark is an Editor of the journal Accounting and Finance and an Associate Editor of the Australian Journal of Management.
Dr Mark Wilson