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AFCX6019 – Financial Statement Analysis and Modelling

2024 – Term 4, Online-flexible

General Information

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Unit convenor and teaching staff Unit convenor and teaching staff Unit Convenor
Lydia Liu
lydia.liu@mq.edu.au
Lecturer
Katarina Djukic
katarina.djukic@mq.edu.au
Credit points Credit points
10
Prerequisites Prerequisites
Admission to GradCertFin (OUA)
Corequisites Corequisites
Co-badged status Co-badged status
Unit description Unit description

This unit equips students with financial analysis skills to support advanced 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 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 understand the language of financial statements, and be able to use 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://www.mq.edu.au/study/calendar-of-dates

Learning Outcomes

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

  • ULO1: Prepare and explain the interrelationships between the three major financial statements.
  • ULO2: Critically assess a company’s historical financial performance using financial ratios and other analysis tools.
  • ULO3: Apply financial analysis skills to develop financial projections for a project or business.
  • ULO4: Construct and demonstrate proficiency in using spreadsheet based integrated financial models to solve a range of finance based problems.

Assessment Tasks

Name Weighting Hurdle Due
Short Exercises 20% No Week 2, 3, 4 and 7
Online Quizzes 20% No Week 5 and 10
Assignment 30% No Week 9
Final Exam 30% No Week commencing 25 Nov

Short Exercises

Assessment Type 1: Case study/analysis
Indicative Time on Task 2: 20 hours
Due: Week 2, 3, 4 and 7
Weighting: 20%

 

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

 
On successful completion you will be able to:
  • Prepare and explain the interrelationships 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 and demonstrate proficiency in using spreadsheet based integrated financial models to solve a range of finance based problems.

Online Quizzes

Assessment Type 1: Quiz/Test
Indicative Time on Task 2: 10 hours
Due: Week 5 and 10
Weighting: 20%

 

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.

 
On successful completion you will be able to:
  • Prepare and explain the interrelationships 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.

Assignment

Assessment Type 1: Case study/analysis
Indicative Time on Task 2: 20 hours
Due: Week 9
Weighting: 30%

 

Analysis of an individual case study topic and presentation of conclusions : 2,500 words

 
On successful completion you will be able to:
  • Prepare and explain the interrelationships 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 and demonstrate proficiency in using spreadsheet based integrated financial models to solve a range of finance based problems.

Final Exam

Assessment Type 1: Examination
Indicative Time on Task 2: 20 hours
Due: Week commencing 25 Nov
Weighting: 30%

 

Online, open book 2 hour exam on all topics.

 
On successful completion you will be able to:
  • Prepare and explain the interrelationships 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 and demonstrate proficiency in using spreadsheet based integrated financial models to solve a range of finance based problems.

1 If you need help with your assignment, please contact:

  • the academic teaching staff in your unit for guidance in understanding or completing this type of assessment
  • the Writing Centre for academic skills support.

2 Indicative time-on-task is an estimate of the time required for completion of the assessment task and is subject to individual variation

Delivery and Resources

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 Booktopia, Dymocks and other sellers. The following links can be used to purchase the textbook:

https://www.booktopia.com.au

https://www.dymocks.com.au/book/financial-statements-demystified-a-self-teaching-guide-by-bo nita-kramer-and-christie-johnson-9780071543880

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

Assumed Knowledge 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?

Unit Web Page The web page for this unit can be found at: https://ilearn.mq.edu.au/login/

Technology Used and Required 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.

Delivery Format and Other Details The timetable for classes can be found on the University website at:  http://www.timetables.mq.edu.au/

Unit Schedule

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

Week

Topic

 Week Commencing

0

Orientation and Topic 1: Introduction to financial statement analysis

 

1

Topic 1: Introduction to financial statement analysis

16 September

2

Topic 2: Introduction to financial modelling

 23 September

3

Topic 3: Preparing financial statements

 30 September

4

Topic 4: A closer look at the balance sheet

 7 October

5

Topic 5: Analysis of financial statements

14 October

6

Topic 6: Preparing a financial model Part 1

 21 October

7

Topic 7: Preparing a financial model Part 2

 28 October

8

Topic 8: Further steps in financial modelling

 4 November

9

Topic 9: Analysis of financial statements (capstone)

11 November

10

Exam preparation

18 November

Policies and Procedures

Macquarie University policies and procedures are accessible from Policy Central (https://policies.mq.edu.au). Students should be aware of the following policies in particular with regard to Learning and Teaching:

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

To find other policies relating to Teaching and Learning, visit Policy Central (https://policies.mq.edu.au) and use the search tool.

Student Code of Conduct

Macquarie University students have a responsibility to be familiar with the Student Code of Conduct: https://students.mq.edu.au/admin/other-resources/student-conduct

Results

Results published on platform other than eStudent, (eg. iLearn, Coursera etc.) 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 connect.mq.edu.au or if you are a Global MBA student contact globalmba.support@mq.edu.au

Academic Integrity

At Macquarie, we believe academic integrity – honesty, respect, trust, responsibility, fairness and courage – is at the core of learning, teaching and research. We recognise that meeting the expectations required to complete your assessments can be challenging. So, we offer you a range of resources and services to help you reach your potential, including free online writing and maths support, academic skills development and wellbeing consultations.

Student Support

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

The Writing Centre

The Writing Centre provides resources to develop your English language proficiency, academic writing, and communication skills.

The Library provides online and face to face support to help you find and use relevant information resources. 

Student Services and Support

Macquarie University offers a range of Student Support Services including:

Student Enquiries

Got a question? Ask us via the Service Connect Portal, or contact Service Connect.

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.

Unit information based on version 2024.04 of the Handbook