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AFCP813 – Financial Statement Analysis and Modelling

2018 – AFC Term 4 Online

General Information

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Unit convenor and teaching staff Unit convenor and teaching staff Unit Convenor / Lecturer
Jennifer Harrison
Contact via Email
Unit Convenor / Lecturer
James Hay
Contact via Email
Credit points Credit points
4
Prerequisites Prerequisites
Admission to MAppFin or MAppFin(Adv)
Corequisites Corequisites
Co-badged status Co-badged status
AFCP813
Unit description Unit description
This unit equips students with financial analysis skills to support further study in corporate finance and investment analysis. Emphasis is placed on being able to interpret financial statements in the context of a company’s operational performance and strategy, to critically assess historical financial performance and to prepare a spreadsheet based financial model capable of forecasting integrated financial statements for a company. After this unit, students should be proficient in the language of financial statements, and be highly competent in the use of an Annual Report to develop an understanding of a company’s historical performance and prospects. Specific topics include the Income Statement, Balance Sheet, Cash Flow Statement and financial statement analysis using Dupont methodology. Financial modelling applications will also be developed, so students will be able to prepare forecasts for the three financial statements, as well as being able to integrate the three statements.

Important Academic Dates

Information about important academic dates including deadlines for withdrawing from units are available at https://students.mq.edu.au/important-dates

Learning Outcomes

  1. Explain the main components of and the linkages between the three major financial statements.
  2. Critically assess a company’s historical financial performance using financial ratios and other analysis tools.
  3. Apply financial analysis skills to develop financial projections for a project or business.
  4. Construct spreadsheet based integrated financial models.
  5. Demonstrate proficiency in using spreadsheet based financial modelling to solve a range of finance based problems.
  6. Analyse and discuss the results produced by a financial model in various scenarios.

Assessment Tasks

Name Weighting Hurdle Due
Quizzes 20% No In iLearn
Short Exercises 20% No In iLearn
Assignment 30% No In iLearn
Final Examination 30% No Exam week

Quizzes

Due: In iLearn
Weighting: 20%

Summary of Assessment Task

Individual / Group: Individual.

Due Dates: See Assessment Summary in iLearn for due dates.

Timing: Two online quizzes will be conducted during the term. The first online quiz relates to material in Topics 1-4 and the second online quiz relates to material in Topics 5-9.

Submission Method: Online via iLearn.

Quiz Conditions: Open book.

Extension Requests:

  • You are expected to make yourself available for assessment during the relevant quiz window.
  • No extensions will be granted. Students who have not submitted the task prior to the due date will be awarded a mark of zero for the task, except for cases in which an application for Special Consideration is made and approved.
  • If you have serious and unavoidable circumstances that prevent you from submitting an assessment task by the due date, you must apply for Special Consideration no later than five (5) working days after the assessment due date. Refer to MAFC Program Rules at www.mafc.mq.edu.au for information on the University’s Special Consideration Policy.

This Assessment Task relates to the following Learning Outcomes:
  • Explain the main components of and the linkages between the three major financial statements.
  • Critically assess a company’s historical financial performance using financial ratios and other analysis tools.
  • Apply financial analysis skills to develop financial projections for a project or business.

Short Exercises

Due: In iLearn
Weighting: 20%

Summary of Assessment Task

Individual / Group: Individual.

Due Dates: See Assessment Summary in iLearn for due dates.

Timing: Four short exercises will be assessed during the term. The short exercises relate respectively to material in Topics 1, 2, 3 and 6.

Submission Method: Online via the unit's iLearn site.

Extension Requests:

  • You are expected to submit the assessment prior to the deadline.
  • No extensions will be granted. Students who have not submitted the task prior to the due date will be awarded a mark of zero for the task, except for cases in which an application for Special Consideration is made and approved.
  • If you have serious and unavoidable circumstances that prevent you from submitting an assessment task by the due date, you must apply for Special Consideration no later than five (5) working days after the assessment due date. Refer to MAFC Program Rules at www.mafc.mq.edu.au for information on the University’s Special Consideration Policy.

This Assessment Task relates to the following Learning Outcomes:
  • Explain the main components of and the linkages between the three major financial statements.
  • Critically assess a company’s historical financial performance using financial ratios and other analysis tools.
  • Apply financial analysis skills to develop financial projections for a project or business.
  • Construct spreadsheet based integrated financial models.
  • Demonstrate proficiency in using spreadsheet based financial modelling to solve a range of finance based problems.

Assignment

Due: In iLearn
Weighting: 30%

Summary of Assessment Task

Individual / Group: Individual.

Due Dates: See Assessment Summary in iLearn for the due date.

Submission Method: Via iLearn.

Extension Requests:

  • You are expected to submit the assessment prior to the deadline. No extensions will be granted.
  • Students who have not submitted the task prior to the due date will be awarded a mark of zero for the task, except for cases in which an application for Special Consideration is made and approved.
  • If you have serious and unavoidable circumstances that prevent you from submitting an assessment task by the due date, you must apply for Special Consideration no later than five (5) working days after the assessment due date. Refer to MAFC Program Rules  at www.mafc.mq.edu.au for information on the University’s Special Consideration Policy.

This Assessment Task relates to the following Learning Outcomes:
  • Explain the main components of and the linkages between the three major financial statements.
  • Critically assess a company’s historical financial performance using financial ratios and other analysis tools.
  • Apply financial analysis skills to develop financial projections for a project or business.
  • Construct spreadsheet based integrated financial models.
  • Demonstrate proficiency in using spreadsheet based financial modelling to solve a range of finance based problems.
  • Analyse and discuss the results produced by a financial model in various scenarios.

Final Examination

Due: Exam week
Weighting: 30%

Summary of Assessment Task

Individual / Group: Individual.

Due Date: See the Assessment Summary in iLearn for the due date.

Submission Method: Online via the unit's iLearn site.

Duration: 3 hours.

Examination Conditions:

  • The final exam is an open book online exam.
  • Refer to MAFC Program Rules at www.mafc.mq.edu.au.

Extension Requests:

  • You are expected to make yourself available for assessment during the relevant exam window. No extensions will be granted.
  • Students who have not sat the final examination prior to the due date will be awarded a mark of zero for the task, except for cases in which an application for Special Consideration is made and approved. Refer to MAFC Program Rules at www.mafc.mq.edu.au for information on the University’s Special Consideration Policy.

This Assessment Task relates to the following Learning Outcomes:
  • Explain the main components of and the linkages between the three major financial statements.
  • Critically assess a company’s historical financial performance using financial ratios and other analysis tools.
  • Apply financial analysis skills to develop financial projections for a project or business.

Delivery and Resources

REQUIRED AND RECOMMENDED TEXTS AND/OR MATERIALS

Required Text:

Financial Statements Demystified by B. Kramer and C. Johnson 2009 McGraw-Hill Education.

This textbook is available to buy from the publisher, McGraw-Hill Education, as either a print book or an e-book. Please note that the publisher’s prices may be quoted in US dollars and the book may ship from overseas. If you intend to use the print book, please allow sufficient time for delivery. The print book is also available from The Co-op, Dymocks and other sellers. The following links can be used to purchase the textbook:

Additional Readings: 

  • Additional readings are included in iLearn.
  • Students should assume these readings are examinable unless otherwise advised.

Assumed Knowledge: Mathematical content

  • This unit requires students to perform arithmetic (add, subtract, multiply, divide), to work with exponents (raise to the power of), and to perform algebraic manipulation of simple equations. For example, given the arithmetical answer to a calculation, it is expected that you can solve for one of the inputs.
    • If 534 = 221 + X – 440, what is X?
  • Additionally, this unit requires students to solve mathematical problems using spreadsheet software by coding formulas into cells in the spreadsheet. 
  • Students should be familiar with financial mathematics such as simple interest and the time value of money.
    • If $200 is borrowed for 12 months at an interest rate of 6% pa to be paid monthly in arrears, how much interest is paid each month?
    • What is the effective annual interest rate?

TECHNOLOGY USED AND REQUIRED

This is an online unit which will make use of the University's iLearn system.

Unit's iLearn Site: 

  • Found by logging on to iLearn ilearn.mq.edu.au, then clicking on Financial Statement Analysis and Modelling.
  • Here you will find forums, downloadable resources and links to important pages. 
  • The forum allows you to communicate with other students and lecturer(s) and may provide supplementary material. 
  • You are requested to post your questions on the forums at least 24 hours prior to the assignment submission date or the examination date. Questions posted after that time may not be answered. Please try to not leave your questions to the last few days. 

Important Notice: 

  • It is important that you familiarise yourself with the unit’s iLearn site.
  • All students should check iLearn regularly and look for updates and distribution of materials related to the unit or assessments and participate in forum discussions. 

Assumed access to technology: Access to a computer with word processing and spreadsheet capability is assumed, as is general student computer literacy. A recent version of Excel is the preferred choice of spreadsheet.

Unit Schedule

The following schedule is a guide to the timing of each topic. 

Week

Topic

Latest date to start working on this topic

0

Orientation and Topic 1: Introduction to financial statement analysis

10 September

1

Topic 1: Introduction to financial statement analysis

17 September

2

Topic 2: Introduction to financial modelling

24 September

3

Topic 3: Preparing financial statements

1 October

4

Topic 4: A closer look at the balance sheet

8 October

5

Topic 5: Analysis of financial statements

15 October

6

Topic 6: Preparing a financial model Part 1

22 October

7

Topic 7: Preparing a financial model Part 2

29 October

8

Topic 8: Further steps in financial modelling

5 November

9

Topic 9: Analysis of financial statements (capstone)

12 November

10

Exam preparation

19 November

Learning and Teaching Activities

Strategy

Programs in the Applied Finance Centre adopt a deep teaching and learning strategy in which students acquire and retain knowledge and also are able to make sense of the issues and concepts and apply them in the “real world”. The program relies heavily on student engagement and participation by: (a) Continuous learning throughout the term. This is encouraged through a combination of students undertaking prescribed reading throughout the units and/or completion of practice problems, online activities, case studies, assignments, class discussions, etc and interaction via forums; and (b) Assessments, which enable the student to demonstrate his/her understanding of the learning objectives achieved through the continuous learning.

Student Participation

This is an online unit. Students participate in this unit by: (a) Actively engaging with the required readings of this unit; (b) Working systematically through exercises and completing on‐line activities; (c) Interacting in forums; and (d) Completing all assessment tasks and exams.

Policies and Procedures

Macquarie University policies and procedures are accessible from Policy Central (https://staff.mq.edu.au/work/strategy-planning-and-governance/university-policies-and-procedures/policy-central). Students should be aware of the following policies in particular with regard to Learning and Teaching:

Undergraduate students seeking more policy resources can visit the Student Policy Gateway (https://students.mq.edu.au/support/study/student-policy-gateway). It is your one-stop-shop for the key policies you need to know about throughout your undergraduate student journey.

If you would like to see all the policies relevant to Learning and Teaching visit Policy Central (https://staff.mq.edu.au/work/strategy-planning-and-governance/university-policies-and-procedures/policy-central).

Student Code of Conduct

Macquarie University students have a responsibility to be familiar with the Student Code of Conduct: https://students.mq.edu.au/study/getting-started/student-conduct​

Results

Results shown in iLearn, or released directly by your Unit Convenor, are not confirmed as they are subject to final approval by the University. Once approved, final results will be sent to your student email address and will be made available in eStudent. For more information visit ask.mq.edu.au.

Students should also consult the MAFC Program Rules found at http://www.mafc.mq.edu.au

Student Support

Macquarie University provides a range of support services for students. For details, visit http://students.mq.edu.au/support/

Learning Skills

Learning Skills (mq.edu.au/learningskills) provides academic writing resources and study strategies to improve your marks and take control of your study.

Student enquiry service (MAFC-specific)

For all student enquiries, please contact studentsupport@mafc.mq.edu.au

Student Enquiry Service

For all student enquiries, visit Student Connect at ask.mq.edu.au

Equity Support

Students with a disability are encouraged to contact the Disability Service who can provide appropriate help with any issues that arise during their studies.

Learning Skills

Learning Skills (http://www.students.mq.edu.au/support/learning_skills/) provides academic writing resources and study strategies to improve your marks and take control of your study.

  • Workshops
  • StudyWise
  • Academic Integrity Module for Students
  • Ask a Learning Adviser

IT Help

For help with University computer systems and technology, visit http://www.mq.edu.au/about_us/offices_and_units/information_technology/help/

When using the University's IT, you must adhere to the Acceptable Use of IT Resources Policy. The policy applies to all who connect to the MQ network including students.

Graduate Capabilities

PG - Discipline Knowledge and Skills

Our postgraduates will be able to demonstrate a significantly enhanced depth and breadth of knowledge, scholarly understanding, and specific subject content knowledge in their chosen fields.

This graduate capability is supported by:

Learning outcomes

  • Explain the main components of and the linkages between the three major financial statements.
  • Critically assess a company’s historical financial performance using financial ratios and other analysis tools.
  • Apply financial analysis skills to develop financial projections for a project or business.
  • Construct spreadsheet based integrated financial models.
  • Demonstrate proficiency in using spreadsheet based financial modelling to solve a range of finance based problems.
  • Analyse and discuss the results produced by a financial model in various scenarios.

Assessment tasks

  • Quizzes
  • Short Exercises
  • Assignment
  • Final Examination

PG - Critical, Analytical and Integrative Thinking

Our postgraduates will be capable of utilising and reflecting on prior knowledge and experience, of applying higher level critical thinking skills, and of integrating and synthesising learning and knowledge from a range of sources and environments. A characteristic of this form of thinking is the generation of new, professionally oriented knowledge through personal or group-based critique of practice and theory.

This graduate capability is supported by:

Learning outcomes

  • Critically assess a company’s historical financial performance using financial ratios and other analysis tools.
  • Analyse and discuss the results produced by a financial model in various scenarios.

Assessment tasks

  • Quizzes
  • Short Exercises
  • Assignment
  • Final Examination

PG - Research and Problem Solving Capability

Our postgraduates will be capable of systematic enquiry; able to use research skills to create new knowledge that can be applied to real world issues, or contribute to a field of study or practice to enhance society. They will be capable of creative questioning, problem finding and problem solving.

This graduate capability is supported by:

Learning outcomes

  • Apply financial analysis skills to develop financial projections for a project or business.
  • Construct spreadsheet based integrated financial models.
  • Demonstrate proficiency in using spreadsheet based financial modelling to solve a range of finance based problems.

Assessment tasks

  • Quizzes
  • Short Exercises
  • Assignment
  • Final Examination

Important Notice

This Unit Guide contains important information about the unit. If anything is unclear, please consult one of the unit lecturers.

 

Standards Required to Complete the Unit Satisfactorily

University Policy on Grading:

  • Macquarie University’s Academic Senate has established a Grading Policy available at https://staff.mq.edu.au/work/strategy-planning-and-governance/university-policies-and-procedures/policies/assessment. Your final result will include: 
    • A Grade ranging from Fail to High Distinction; and
    • A numerical Mark which is a summation of the individual assessment components
  • It is important to note:
    • The Policy does not require that a minimum or maximum number of students are to be failed in any unit; 
    • Grades will not be allocated to fit a predetermined distribution; and
    • Grades for all individual assessment items will be released to students, but Marks may not necessarily be released.

Review of Grade and final examination Script viewing:

  • A student who has been awarded a final grade for a unit and who does not believe it is an accurate reflection of their performance, and has grounds for such a claim and can demonstrate those grounds, may apply to have their grade reviewed.
  • For information on requesting a review of grade and/or viewing your final exam script, please refer to the University’s Grade Appeal Policy at http://www.mq.edu.au/policy/docs/gradeappeal/policy.html and MAFC Program Rules at http://www.mafc.mq.edu.au.