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.

Learning Outcomes

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.

Research-Led Teaching

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

To be advised on the course Wattle site.

Required Resources

Palepu, K. G., P. M. Healy, S. Wright, M. Bradbury, J. Coulton, Business Analysis and Valuation Using Financial Statements, 3^rd Asia-Pacific Edition, Cengage Learning, 2020.

ISBN-10: 0170425185 ISBN-13: 9780170425186

The ISBN for the e-book version is:

ISBN-10: 0170450783 ISBN-13: 9780170450782

Students are expected to have access to a copy of the prescribed book for the duration of the semester. A few copies of the text are available for 2 hour loan in the reserve loan section of the Chifley Library. An ebook version of the text will be available from the Chifley Library. A link to the ebook location will be provided on Wattle when available.

Additional materials, including analyst reports, book chapters, press reports 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:

http://datanalysis.morningstar.com.au/af/dathome?xtm-licensee=datpremium

(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 materials relevant to your assignments (see below).

How to access DatAnalysis Premium if you are not on the ANU Campus (or if the DatAnalysis site is asking you to log in).

1)     Navigate to virtual.anu.edu.au

2)     Once the page has loaded, you will be prompted to select your Reverse Proxy Jump Point. The default location is the Library website, so just hit ‘Go’

3)     On the Library landing page, scroll down to ‘E-Resources and Databases’ and select ‘D’

4)     Scroll down and select ‘DatAnalysis Premium’

5)     This should open up the DatAnalysis site and you should not need to supply any further credentials

Staff Feedback

Students will be given feedback in the following forms in this course:

• Verbal (in tutorials and in consultation with teaching staff)
• Written (via comments appended to assessment items submitted online or to hard copies of the company analysis assignment, via email, via automated responses to online quiz questions)

Student Feedback

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.

Other Information

COURSE DELIVERY

There will be comprise one 2-hour lecture/workshop per week, and one 1-hour tutorial 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 1-hour tutorial will examine both theoretical and practical aspects of the syllabus. Questions for discussion in class will be available on the course website at least one week prior to the relevant class. Students are expected to have prepared a response to workshop and tutorial questions in advance of class, and to actively participate in class discussions of the prescribed questions.

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 / definitional tutorial and workshop questions will not be provided. 

ASSESSMENT REQUIREMENTS

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.

COMMUNICATION

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.

Announcements

Students are expected to check the Wattle site for announcements about this course, e.g. changes to timetables or notifications of cancellations.

Class Schedule

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 2021, 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 Re-Casting Financial Statements (lecture slides provided, no ‘live’ lecture) Text: Ch. 3, Ch. 12
4	Implementing Accounting Analysis :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 2021, 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	Assignment 1 Due: 29 March 2021
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 Financial Statement Data to Assess Creditworthiness Text: Ch. 10
10	Using Prices to Infer Market Expectations of Growth; Evaluating Mergers and Acquisitions and IPOs Text: Ch. 10, Ch. 11
11	Application of FSA to Equity Analysis; Accounting-related stock market ‘anomalies’ Text: Ch. 9	Company Analysis Report Due: 17 May 2021
12	Valuation Methods Workshop and Course Synthesis

Tutorial Registration

Tutorials will be available in both face-to-face and live Zoom classes. One tutorial per week will be recorded and made available on Wattle, however, you are expected to attend and participate in the live classes on a regular basis.

Enrolment for the various options, and times of the classes will be made available on Wattle. When tutorials are available for enrolment, follow these steps:

1. Log on to Wattle, and go to the course site.

2. Click on the link “Tutorial enrolment”

3. On the right of the screen, click on the tab “Become Member of ……” for the tutorial class you wish to enter.

4. Confirm your choice

If you need to change your enrolment, you will be able to do so by clicking on the tab “Leave group…” and then re-enrol in another group. You will not be able to enrol in groups that have reached their maximum number. Please note that enrolment in ISIS must be finalised for you to have access to Wattle.

Assessment Summary

Assessment task	Value	Due Date	Return of assessment	Learning Outcomes
Assignment 1	15 %	29/03/2021	19/04/2021	2,3,4,5
Assignment 2 - Company Analysis Report	55 %	17/05/2021	31/05/2021	1,2,3,4,5,6,7
Final Exam	30 %	03/06/2021	01/07/2021	1,2,3,4,5,6,7
Non-Assessable Quizzes	0 %	*	*	1,3

* If the Due Date and Return of Assessment date are blank, see the Assessment Tab for specific Assessment Task details

Policies

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:

• Student Assessment (Coursework) Policy and Procedure
• Special Assessment Consideration Policy and General Information 
• Student Surveys and Evaluations
• Deferred Examinations
• Student Complaint Resolution Policy and Procedure

Assessment Requirements

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.

Examination(s)

Information regarding permitted examination materials for the course will be available on the examination timetable website when the examination timetable is released:  http://timetable.anu.edu.au/

Assessment Task 1

Assignment 1

Due Date: 11am, 29 March 2021, via Turnitin.

Details: Your first assignment requires you to write a report on a topic (to be provided in Week 1) relevant to this course’s objectives, and will require you to apply knowledge obtained from the first four topics of this course and from pre-requisite courses. This assignment is an individual assignment.

Students should also be aware that misconduct (e.g. plagiarism) in any item of assessment could lead to a fail for the course.

Assessment Task 2

Assignment 2 - Company Analysis Report

Due Date: 11am, 17 May 2021, via Turnitin.

Details: Details of the Company Analysis Report will be available on the course website before the end of Week 2. This comprehensive assignment will require you to analyse and evaluate the financial statements of, and other information pertaining to, a listed Australian firm, and in doing so to demonstrate an understanding of topics key to this course, including: business strategy, accounting analysis, corporate governance, and the basics of valuation. You are expected to commence work on your Company Analysis Report prior to the mid-term break. This is an individual assignment.

Students should also be aware that misconduct (e.g. plagiarism) in any item of assessment could lead to a fail for the course.

Assessment Task 3

Final Exam

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. Information regarding exam script viewing will be provided in due course.

Details of the final exam will be provided no later than Week 12.

Hurdle Assessment:

To receive a pass (or better) grade in this course you must:

• achieve a mark equal to or exceeding 50% of the total marks available for assessment
• achieve a mark equal to or exceeding 40% of the total marks available in the final exam

Students should also be aware that misconduct (e.g. plagiarism) in any item of assessment could lead to a fail for the course.

Assessment Task 4

Non-Assessable Quizzes

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.

Academic Integrity

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.

Online Submission

You will be required to electronically sign a declaration as part of the submission of your assignment. Please keep a copy of the assignment and all supporting materials (e.g. spreadsheets used in calculations) for your records. The convenor may require you to submit these supporting materials to assist in the marking of your assignment and to assist if there are any concerns regarding the assignment's originality. Unless an exemption has been approved by the Associate Dean (Education) submission must be through Turnitin.

Hardcopy Submission

For some forms of assessment (hand written assignments, art works, laboratory notes, etc.) hard copy submission is appropriate when approved by the Associate Dean (Education). Hard copy submissions must utilise the Assignment Cover Sheet. Please keep a copy of tasks completed for your records.

Late Submission

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.

Referencing Requirements

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.

Returning Assignments

Assignments will be returned to students either in tutorials, via email (to the student’s ANU account) or via the course Wattle site.  

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 is no provision for the resubmission of assignments.

Privacy Notice

The ANU has made a number of third party, online, databases available for students to use. Use of each online database is conditional on student end users first agreeing to the database licensor’s terms of service and/or privacy policy. Students should read these carefully. In some cases student end users will be required to register an account with the database licensor and submit personal information, including their: first name; last name; ANU email address; and other information.
In cases where student end users are asked to submit ‘content’ to a database, such as an assignment or short answers, the database licensor may only use the student’s ‘content’ in accordance with the terms of service – including any (copyright) licence the student grants to the database licensor. Any personal information or content a student submits may be stored by the licensor, potentially offshore, and will be used to process the database service in accordance with the licensors terms of service and/or privacy policy.
If any student chooses not to agree to the database licensor’s terms of service or privacy policy, the student will not be able to access and use the database. In these circumstances students should contact their lecturer to enquire about alternative arrangements that are available.

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