Postgraduate Course: Financial Analysis (MBA) (CMSE11241)
||College||College of Arts, Humanities and Social Sciences
|Credit level (Normal year taken)||SCQF Level 11 (Postgraduate)
||Availability||Not available to visiting students
|Summary||The course contrasts traditional accounting ratio techniques rooted in old economy perspectives of fixed asset utilisation and cost control, with financial analysis as a tool for assessing the performance and development of intangibles. This new economy perspective is particularly appropriate for knowledge companies in areas such as pharmaceuticals, IT and other high tech products.
Financial Analysis is an important skill for all those in management positions who deal with financial statements as part of their understanding of a business. This includes those outside the business such as investment analysts and within the business those responsible for strategy (including execution) and those responsible for relations with outside stakeholders including investors and banks. Financial statements do not exist in a vacuum but are a reflection of business activity. To understand financial statements it is necessary to understand business activity and vice versa. The course therefore is as much about business and business strategy as it is about accounting. A good company is identified as one with a good strategic story and good financial numbers. The ideas of the course are explored through an in depth analysis of the annual report and financial statements for a number of interesting companies. The concepts of free cash flow and residual income are central to the analysis of company performance and evaluation.
The theory and practice of investment
The micro economics of the highly performing company
The role of the business model and corporate strategy
Directors' rhetoric and storytelling
Analysis in a strategic context
State and performance analysis
The role of cash flow analysis
Predicting corporate failure
Economic Value Added, Value Added and their uses.
The stakeholder knowledge network
The new economy: strategy as the development and leverage of intangibles
The role of accounting for intangibles using residual income.
Sharing risks and rewards
Accounting for promises including pensions and derivatives
The impact of acquisitions
Student Learning Experience
The course uses a mix of lectures and case studies, together with classroom exercises.
Entry Requirements (not applicable to Visiting Students)
||Other requirements|| For Business School PG students only, or by special permission of the School. Please contact the course secretary.
Course Delivery Information
|Academic year 2020/21, Not available to visiting students (SS1)
|Learning and Teaching activities (Further Info)
Lecture Hours 20,
Summative Assessment Hours 40,
Programme Level Learning and Teaching Hours 2,
Directed Learning and Independent Learning Hours
|Assessment (Further Info)
||Formative feedback will be provided on the basis of learning progression tests (graded but not part of the course assessment) and performance on practical case-study work. Written summative feedback will be provided on the assessment.
|No Exam Information
On completion of this course, the student will be able to:
- Critically analyse a set of financial statements in the context of the business strategy.
- Understand and critically evaluate the business performance.
- Critically assess the value of the business.
- Advise either investors or management on the financial performance and prospects for the business along with an assessment of the share price.
|Palepu, K. G., Healy, P.M., Bernard V.L. and E.Peek, Business analysis & valuation using financial statements, Thomson South Western, 2010 (Recommended).|
Kay,J. The long and the short of it: finance and investment for normally intelligent people, The Erasmus Press, 2009. (Recommended).
|Graduate Attributes and Skills
||Cognitive and Subject Specific Skills:
Knowledge and application of accounting skills, analytical skills and skills of synthesis and presentation.
Presentation and report writing skills are developed through the experience on the course.
|Keywords||Finance Investment Strategy
|Course organiser||Dr Tom Brown
Tel: (0131 6)50 8333
|Course secretary||Mrs Angela Muir
Tel: (0131 6)51 3854