Advanced financial analysis

AFM040-01

This module’s focus is the analysis of a company’s financial statements and wider available contextual information, to interrogate and critique.

Advanced Financial Analysis enables students to analyse the statements and glean insights into indicators of performance. Interrogation requires the confidence to ask the right questions, and be informed to do so. Students will gain the knowledge, understanding and skills to identify and critique strengths and weakness of reported financial information, and draw conclusions about the past, present and the projected future. Contextually, the degree to which reported financial statement figures are impacted by judgement and discretion should be explored, ascertaining the difference between ‘true and fair’ views and creative accounting. 

Topics covered: 

Main topics of the module include: 

  • Strengths, weakness and limitations of external financial reporting statements. 
  • Discretion in applying financial standards and accounting principles. 
  • Creative accounting. 
  • Instances of fraud. 
  • Horizontal and vertical, and other appropriate/relevant analyses. 
  • Using ratios to predict survivals, prosperity, and failure. 

Learning outcomes:

On successful completion of this module, you will be expected to be able to:  

  • Develop a framework for analysing and assessing a company’s financial performance, health and position. 
  • Apply the framework in the contexts of each of: a financial analyst, a fund manager, strategic direction mangers, shareholders and other stakeholders of the company. 
  • Understand, explain and discuss how discretion and judgement as applied in preparing financial statements can distort reported financial performance. 
  • Identify and apply appropriate adjustments to a company’s financial statements to facilitate comparisons between companies. 
  • Identify and understand the impact on reported financial figures of creative accounting and deliberate fraud. 
  • Forecast a company’s likelihood of corporate failure. 

Assessment:  

There are two assessment components: 

  • Online open book test: 2 hours; weighted at 25%  

  • Coursework: up to 3,000 words; weighted at 75%