Unit Information Management System

Financial Statement Analysis (ACCT3302, SEM-2, 2017, Crawley)




UWA Business School




Unit Outline




Financial Statement Analysis


ACCT3302


SEM-2, 2017


Campus: Crawley


Unit Coordinator: Mr Chris Fernandes


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Copying of this material by students, except for fair dealing purposes under the Copyright Act, is prohibited. For the purposes of this fair dealing exception, students should be aware that the rule allowing copying, for fair dealing purposes, of 10% of the work, or one chapter/article, applies to the original work from which the excerpt in this course material was taken, and not to the course material itself

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Unit details

Unit title Financial Statement Analysis
Unit code ACCT3302 Credit points 6
Availability SEM-2, 2017 (31/07/2017 - 25/11/2017)
Location Crawley Mode Face to face

Contact details

Faculty Business School
School UWA Business School
School website http://www.business.uwa.edu.au/
Unit coordinator Mr Chris Fernandes
Email chris.fernandes@uwa.edu.au
Consultation hours Consultation with the teaching staff will be by appointment during the semester. Consultations will also be available prior to the Final Examination.
Lecturers
NameEmail
Chris Fernandeschris.fernandes@uwa.edu.au
Tutors/ Demonstrators/ Facilitators
Unit contact hours
Lecture time:

Tuesdays, 11:00am - 1:00pm

Lecture venue: Please refer to http://www.timetable.uwa.edu.au for the unit timetable.


Lecture capture system LCS is implemented for this unit.
Online handbook http://handbooks.uwa.edu.au/units/unitdetails?code=ACCT3302
Unit website http://www.lms.uwa.edu.au

Unit rules

Prerequisites ACCT2201 Corporate Accounting
Corequisites
Advisable prior study FINA1221/FINA2221 Introduction to Finance
Incompatibility FINA2207 Business Analysis and Valuation
Approved quota

Unit description

This unit focuses on five key components of effective financial statement analysis: (1) business strategy analysis is the starting point and provides the foundation for the subsequent analysis; (2) accounting analysis involves examining how accounting rules and conventions represent (or do not represent) the economic reality of a firm in its financial statements; (3) financial analysis primarily involves the use of ratios to analyse a firm's performance against appropriate benchmarks; (4) prospective analysis involves the development of forecast financial statement information which can then be used to estimate a firm's value; and (5) the application of the abovementioned techniques to perform equity security analysis, credit analysis and distress prediction, and an understanding of the important elements of merger and acquisition activities.

This is a unit that draws together a student's understanding of corporate business practices to provide students with a framework for using financial statement data in a variety of business analysis and valuation contexts. It examines the role of accounting information (and intermediaries) in the economy and how financial analysis can create value in well-functioning markets. An integral part of this unit is developing an understanding of currently available corporate communication activities and governance mechanisms that add value to the firm and can be used to complete financial statement analysis. Current corporate activities are examined and integrated with proven theoretical models, seeking to provide the student with an understanding of contemporary financial statement analysis techniques and practical applications in the current business activities. 

The application of the four components of financial statement analysis outlined above, will be used to perform equity security analysis, credit analysis and distress prediction, and an understanding of the important elements of merger and acquisition activities. In gaining an understanding of current corporate communication practices, students will be expected to research, source and find relevant data and information in completing the assessment components of the course.

Learning outcomes

Students are able to (1) evaluate the appropriateness of a firm's business strategy given the industry in which it operates and likely future developments for that industry; (2) evaluate the appropriateness of a firm's accounting policy choices and the likely impact of any inappropriate accounting policies on the firm's income statement and balance sheet; (3) forecast a firm's likely future performance (profitability), having regard to its business strategy, accounting policies and current performance; (4) value the firm based on the forecast of its likely future performance; (5) perform equity security analysis, credit analysis and distress prediction, and evaluate merger and acquisition activity; and (6) identify and use the appropriate elements of current corporate communication techniques to facilitate the business analysis and valuation process.

Unit structure

(See Timetable)

Unit schedule

WeekDate (beginning of week)Lecture topicLecture readingsWorkshop TopicWorkshop readingsAssessment
131 JulyUnit introductionTextbook, Ch. 1No workshop
27 AugustFinancial statement presentation, communication and governance
Textbook, Ch. 12
Loftus, Ch. 16, 17, 18
Unit introductionTextbook, Ch. 1Students will be allocated into streams for Workshop Participation and groups for the In-class Group Case Study
314 AugustStrategy analysisTextbook, Ch. 2Financial statement presentation, communication and governanceTextbook, Ch. 12
Loftus, Ch. 16, 17, 18
Workshop Participation ("WP"): Stream A
421 AugustAccounting analysis: overviewTextbook, Ch. 3Strategy analysisTextbook, Ch. 2WP: Stream B
528 AugustAccounting analysis: implementationTextbook, Ch. 4Accounting analysis: overviewTextbook, Ch. 3WP: Stream A
64 SeptemberFinancial analysis: ratio analysisTextbook, Ch. 5Accounting analysis: implementationTextbook, Ch. 4WP: Stream B
711 SeptemberFinancial analysis: cash flow analysisTextbook, Ch. 5
Financial analysis: ratio analysisTextbook, Ch. 5WP: Stream A
818 SeptemberProspective analysis: forecasting, valuation theory and EPSTextbook, Ch. 6, 7
AASB133
Loftus, Ch. 19
No workshop
Mid-semester study break25 - 29 SeptemberNo classes
92 OctoberProspective analysis: valuation implementationTextbook, Ch. 8Financial analysis: cash flow analysis and prospective analysis: forecasting, valuation theory and EPSTextbook, Ch. 5, 6, 7
AASB133
Loftus, Ch. 19
Individual Assignment due Monday, 2 October at midday via LMS
109 OctoberEquity security analysisTextbook, Ch.9Prospective analysis: valuation implementationTextbook, Ch. 8WP: Stream B; In-class Group Case Study information released to students in lecture
1116 OctoberCredit analysis and distress predictionTextbook, Ch.10Equity security analysisTextbook, Ch. 9WP: Stream A
1223 OctoberMergers and acquisitions ("M&A")Textbook, Ch.11In-class group case studyIn-class Group Case Study completed in workshops
1330 OctoberRevisionRevision materials will be made available on LMSCredit analysis and distress prediction and M&ATextbook, Ch. 10, 11WP: Stream B
Pre-examination study break6 - 10 November
Semester 2 examination period11 - 24 NovemberFinal Examination date to be confirmed

Teaching and learning responsibilities

Teaching and learning strategies

Method of Instruction

The method of instruction for Financial Statement Analysis is as follows:

  • 1 x 2-hour lecture per week 
  • 1 x 2-hour workshop per week

Lectures

Lectures are recorded and available on LMS and are to be viewed at your discretion.

Workshops

You must attend one (1) weekly two (2) hour Workshop commencing in Week 2. This unit adopts a case study approach to Workshop problems where students work both individually and in teams. You will be allocated to a team of five (5) in the first Workshop of the semester. You should work with your team throughout the semester and you are not permitted to change Workshop or change into another team. It is your responsibility to prepare for Workshops using the relevant course materials.

The approach to learning is cumulative and reflective. That is, each week builds on the prior week(s) and you need to reflect on what you are learning each week to see how the topics fit together. You must monitor your own learning on a weekly basis and take action (self-study, completing additional practice questions and problems or a student consultation session) to ensure that you understand the material presented to you on a weekly basis. In addition, the teaching staff will be available for consultation prior to the final examination and throughout the semester by appointment.

You will need to register for a workshop via Class Allocation System (CAS). http://www.cas.uwa.edu.au/

Teaching and learning evaluation

You may be asked to complete two evaluations during this unit: The Student Perception of Teaching (SPOT) and the Students' Unit Reflective Feedback (SURF). The SPOT is optional and is an evaluation of the teaching staff and the unit. The SURF is completed online and is a University wide survey that deals only with the unit. You will receive and email from the SURF office inviting you to complete the SURF when it is activated. We encourage you to complete the forms as your feedback is extremely important and can be used to make changes to the unit or lecturing style when appropriate. Please make sure that you use appropriate language when you give feedback via these mechanisms as the teaching staff do actively participate in the unit evaluation process.

Attendance

Participation in class, whether it be listening to a lecture or getting involved in other activities, is an important part of the learning process, therefore, it is important that you attend classes. As confirmation of this, the University regulations formally state that 'to complete a course or unit students shall attend prescribed classes, lectures, seminars and tutorials'.

 

Charter of student rights and responsibilities

The Charter of Student Rights and Responsibilities upholds the fundamental rights of students who undertake their education at the University of Western Australia.  The University's charter of Student Rights and Responsibilities is available at www.governance.uwa.edu.au/procedures/policies/policies-and-procedures?method=document&id=UP07/132

Student Guild contact details

The Guild represents all students enrolled at UWA. They can help you in a number of ways by providing financial, academic, and welfare support. Contact details for the University Student Guild can be found at www.guild.uwa.edu.au/. The Guild Education Officer is available to provide assistance and advice on a range of issues.

Student Services contact details

There is a wealth of material provided by UWA Student Services that can help you settle into university life and help with many other issues you may encounter as a university student.  Contact details for Student Services can be found at http://www.student.uwa.edu.au/contact

UniAccess

UniAccess provides free services and support to UWA students who want to disclose a disability or a medical condition and request assistance http://www.student.uwa.edu.au/experience/health/uniaccess

The Library

The University Library http://www.library.uwa.edu.au/has many services available to support you academically.  The Business collection is located in the Barry J Marshall Library in the Science building http://www.library.uwa.edu.au/contact/science , otherwise a Business librarian is available at the School at specified times. 

Uses of student feedback

ACE/AISE/CARS

Your academic orientation includes three online units which you must complete within the first 10 weeks of your enrolment:

AACE1000 Academic Conduct Essentials (ACE)  (just this for postgraduate)
INDG1000 Indigenous Study Essentials
CARS1000 Communication and Research Skills

Information for students with disabilities

The University has a range of support services, equipment and facilities for students with a disability. If you would like to receive advice on these services please email uniline@uwa.edu.au or visit www.student.uwa.edu.au/life/health/uniaccess

Using peer feedback to assess team contributions

The online tool SPARKPLUS may be used to assess individual contributions to team work. Where Spark is used you will be required to provide feedback to, and receive feedback from, your team members. Based on a series of answers from each team member SPARKPLUS automatically produces two weighting factors: your RPF and SAPA. The use of SPARKPLUS will be explained in class and more information is available on LMS.

Assessment

Assessment overview

Typically this unit is assessed in the following ways: (1) in-class case studies; (2) individual research assignment; and (3) final examination. Further information is available in the unit outline.

Workshop participation is also assessed. Further information is available in the unit outline.

Assessment mechanism

#ComponentWeightDue dateRelative learning outcomes
1Workshop Participation10%Ongoing (see below)1 – 6
2In-class Group Case Study10%Workshops in Week 121 – 6
3Individual Assignment30%Monday, 2 October 2017 at midday (12:00pm)1 – 6
4Final Examination50%Semester 2 examination period: 11 - 24 November1 – 6

Assessment items

ItemDescriptionSubmission
#1 – Workshop ParticipationWorkshops represent an important part of your learning experience in ACCT3302 Financial Statement Analysis. The 10% Workshop Participation mark allocated for this unit will be determined based on your active participation and contribution in your allocated Workshop. A passing Workshop mark can only be achieved if you are fully prepared prior to class and participate actively in Workshop discussions.

Questions will be discussed in each Workshop session and consist of predominantly case study type problems from the Textbook (“Workshop Questions”). The Workshop Questions will be made available on LMS at least one (1) week prior to the relevant Workshop week on that topic (i.e. Workshop Questions for the week commencing Monday, 14 August 2017 will be made available on LMS by at least 5:00pm on Monday, 7 August 2017). These Workshop Questions are introduced to encourage students to play an active role during Workshops. One purpose of the Workshop Questions is to give you an opportunity to improve your understanding and technical competence and to participate in discussion. Your Workshop Participation mark will be based on your active participation in the discussions of the Workshop Questions facilitated by your tutor. Suggested solutions to the weekly Workshop questions will be uploaded to LMS as soon as practicable after the final Workshop session of that week is completed.

‘Real world’ case studies from beyond the Textbook may be used to help facilitate discussion. Such materials will be made available to students concurrently with the Workshop Questions as outlined above.

Please note that unless extenuating circumstances apply (e.g. ill health), you must attend your allocated Workshop. If you are unable to attend your scheduled Workshop due to extenuating circumstances, you must seek permission from the Unit Coordinator to attend an alternative Workshop for that week.

Workshops commence in Week 2 of the semester (i.e. week commencing Monday, 7 August 2017). In this Workshop each student will be placed into either Streams A or B for Workshop Participation. Each student’s Workshop Participation will be assessed on a holistic basis across their four (4) allocated Workshops. Each Steam’s assessed Workshops are outlined in the Unit Schedule.

For further information please refer to the ‘Workshop Participation Guidelines’ available on LMS in the relevant Assessments sub-folder.
In-class
#2 - In-class Group Case StudyThe In-class Group Case Study will be completed in your Week 12 Workshop (i.e. for the week commencing Monday, 23 October 2017).

Students will be allocated into teams of five (5) people and these teams will remain fixed for the semester. Team allocation will occur in your Week 2 Workshop (i.e. for the week commencing Monday, 7 August 2017).

Details of the In-class Group Case Study will be provided to students on Monday, 9 October 2017 in that week’s lecture and released on LMS (i.e. relevant topics and questions). The In-Class Group Case Study will be based on materials from the lectures, Textbook and other published sources. Students are strongly advised to prepare for the In-Class Group Case Study by studying and reviewing the relevant materials prior to the assessment.

The In-Class Group Case Study can only be completed in your assigned Workshop. Therefore, unless extenuating circumstances apply (e.g. ill health), you must attend your assigned Workshop.

Peer feedback will be used to assess team contributions. Your individual contribution to the team will be assessed using SPARKPLUS. For information on how SPARKPLUS works, please refer to the "Assessments" section on the unit's LMS page.
LMS
#3 - Individual Assignment
All students are required to submit an Individual Assignment in Week 9 on Monday, 2 October 2017 at midday (12:00pm). The Individual Assignment will be a ‘real world’ case study based on an S&P/ASX 300 listed company, and comprises qualitative and quantitative analysis. Details of the Individual Assignment will be provided to students in the Week 2 lecture on Tuesday, 8 August 2017 and uploaded to LMS.
LMS
#4 - Final ExaminationThe Final Examination will be two (2) hours and will cover all topics covered in this unit. Details of the Final Examination will be provided in due course during class.

Students who fail to achieve the minimum standard in the Final Examination but whose mark totals 50 or greater will be awarded a grade of FC.

Academic literacy and academic misconduct

The University of Western Australia takes very seriously the matter of academic misconduct by students and has policies in place that define misconduct (including plagiarism) and the penalties that apply. The consequences for misconduct can be severe, including exclusion from the University.

All students are expected to make themselves aware of the definitions and the policies relating to academic misconduct, found at the websites below, and with any additional requirements or stipulations that may be provided by individual coordinators www.governance.uwa.edu.au/procedures/policies/policies-and-procedures?policy=UP07%2F21

Appeals against academic assessment

The full regulations governing appeals procedures are available in the University Handbook at http://rules.handbooks.uwa.edu.au/rules/student_rules/

Penalty for late submission

A penalty of 5 per cent of the total mark allocated for the assessment item is deducted per day for the first 7 days (including weekends and public holidays) after which the assigned work is not accepted. Each 24-hour block is recorded from the time the assignment is due.

 Penalty for exceeding word limit

Where an assignment exceeds the word limit, a penalty of 1 per cent of the total mark allocated for the assessment task applies for each 1 per cent in excess of the word limit.

Textbooks and resources

Recommended texts

Textbook
The recommended textbook for this unit is Palepu, KG, Healey, PM, Bernard, VL, Wright, S, Bradbury, M & Lee, P 2015, Business analysis and valuation: using financial statements (text and cases), 2nd Asia-Pacific ed. Cengage Learning, Australia. ISBN 9780170261951 ("Textbook" as referred to in the Unit Schedule).

The Textbook is available in hard copy from the Co-op Bookshop, or as an eBook through the Co-op website: http://www.coop.com.au/textbook/search. Alternatively, the eBook can be purchased directly from the publisher's website: www.cengagebrain.com. Multiple copies of the textbook will be placed in the High Demand Collection of the Business Library. Please remember to respect the rights of all UWA students ability to access the textbook through the library.

The Textbook will be heavily used in this unit. Further, the weekly Workshop Questions will be largely drawn from the Textbook.

Suggested alternate texts

Additional texts

Loftus
An additional text that that may be useful for students is Loftus, J, Leo, KJ, Boys, N, Luke, B, Daniliuc, S, Ang, HN, & Byrnes, K 2015, Financial Reporting, John Wiley & Sons, Australia. ISBN 9780730311119 ("Loftus" as referred to in the Unit Schedule).

Loftus is used as a recommended textbook in ACCT3321 Financial Accounting: Theory and Practice. The chapters from Loftus that are referenced in the Unit Schedule relate to financial statement presentation and earnings per share. Students may wish to revise these chapters in addition to the primary readings from the Textbook to consolidate their understanding of these areas.

Additional reading
Additional reading materials may be provided throughout the semester where relevant. Such additional reading materials may include Australian Accounting Standards, newspaper or journal articles, company disclosures and/or other relevant content. Any additional reading materials will be made available to students on the unit's LMS in the relevant topic folder in "Acticities and resources".

Technical requirements

It is strongly recommended that at least one person in each team brings a laptop to each workshop. Laptops will be required for completing the in-class group case studies which must be accessed and submitted via LMS.

Software requirements

Additional resources and reading

Other important information

Using peer feedback to assess team contributions

The online tool SPARKPLUS will be used to assess individual contributions to team/group work. You will be required to provide feedback to, and receive feedback from, your team members. Based on a series of answers from each team member SPARKPLUS automatically produces two weighting factors: your RPF and SAPA. For further information on SPARKPLUS please refer to the "Assessments" section of the unit's LMS page.

Purpose of assessment

There are a number of reasons for having assessable tasks as part of an academic program. These assessable tasks are designed to encourage you to explore and understand the subject more fully. The fact that we grade your work provides you with an indication of how much you have achieved. Providing feedback on your work also serves as part of the learning process.

In this unit both formative and summative assessment is used. Workshop Participation and completing the In-Class Group Case Study assists in developing the skills to appreciate the advantages of and how to effective work in teams. The Individual Assignment allows students to work independently and to develop their research and written communication skills. The Final Examination assesses knowledge of the learning outcomes across the unit.

Unit website

This unit makes use of LMS. Weekly lecture and Workshop handouts (when applicable) will be made available on LMS. Solutions for the Workshop Questions will be provided during class, and marked In-Class Group Case Studies will be returned to students via LMS.

LMS also provides a forum for students to discuss unit content. All questions regarding the unit content should be posted on the appropriate forum for the week/topic and the questions will be answered via the forum by one of the unit's teaching staff.

We strongly advise students to regularly access their student email accounts. Important information regarding the unit is often communicated by email and will not be automatically forwarded to private email addresses.



Standard of assessment

The Business School must ensure that the processes of assessment are fair and are designed to maintain the standards of the School and its students. The School follows the UWA marks and grades distribution:

Higher distinction

(HD)

80-100%

Distinction

(D)

70-79%

Credit pass

(CR)

60-69%

Pass

(P)

50-59%

Fail

(N+)

45-49%

Fail

(N)

0-44%

Failed component

(FC)

 

 

The scaling of marks to ensure comparability between classes is an acceptable academic practice. The School and Board of Examiners have the right to scale marks where it is considered necessary to maintain consistency and fairness.

Quality assurance

Your assessed work may also be used for quality assurance purposes, such as to assess the level of achievement of learning outcomes as required for accreditation and audit purposes. The findings may be used to inform changes aimed at improving the quality of Business School programs. All material used for such processes will be treated as confidential, and the outcome will not affect your grade for the unit.

Approved calculators for examinations

The University permits only the use of calculators in examinations when the calculator has an approved sticker and the examiner permits their use.  If the student does not have an approved sticker on their calculator, they will not be permitted to use the calculator.  Calculators can be approved at the Undergraduate Student Centre, the Postgraduate Student Centre or at Student Administration.  Further information is available on the Business School website at www.business.uwa.edu.au/students/assessments

Special consideration/alternative arrangements

If you are unable to attend a class, tutorial or examination due to circumstances beyond your control and are seeking an extension for submission of an assignment or a deferred exam, please read valid reasons for special consideration at www.student.uwa.edu.au/life/health/uniaccess/special-consideration, complete the application form and submit at the Student Centre.
PLEASE NOTE that deferred exams are not available in Summer School units.

Acknowledging Sources of Information and the Business School Policy on Plagiarism

Student Services provides an online plagiarism portal that includes a definition of plagiarism and a link to FAQ www.studentservices.uwa.edu.au/ss/learning/online_services/plagiarism_portal

‘Turnitin' Originality Checking & Plagiarism Prevention is used in the Faculty to allow both educators and their students check written work for improper citation or misappropriated content. More information about 'Turnitin' can be found at http://turnitin.com/static/index.html

eBooks and open book exams

eBooks cannot be accessed at an examination. Please check your exam details and purchase a printed version of any book you would select to take into an open book exam.

Referencing

It is important that the referencing of any sources used in your written work is done properly, if only to substantiate the points you are making in your assignment or project.  The Harvard style is the preferred and there are some notes for guidance which have been prepared by the library staff:  ‘Citing your Sources Harvard Style’ http://libguides.library.uwa.edu.au/harvard

The EndNote software package is a really good system for building up a database of references.  Not everyone will want to invest the time in using this system but you should consider it if you intend to build up resource materials or plan to undertake extensive research in a particular area.  The library staff have also developed a tutoring package: ‘A Quick Guide to Using EndNote’ which provides the basics for using EndNote with an essay http://libguides.library.uwa.edu.au/endnote

Last day to add a unit offered in a semester

The final date to add a unit is the end of week 2 of the semester.  For further information on important dates for 2017, refer to www.student.uwa.edu.au/course/dates/important

STUDYSmarter

STUDYSmarter helps students get more out of their study by equipping you with additional skills needed at university. Explore the range of free on-campus and online services to help you develop academic communication, research, critical analysis, numeracy and study skills. http://www.student.uwa.edu.au/learning/studysmarter