Balance Sheet Analysis Planning and Control
PROFESSOR LAURA ZONI
COURSE AIMS
The course objective is to provide the students with the fundamentals of financialeconomic analysis and measurement methods. The first part of the course will
present and interpret various methods for reclassifying and analysing financial
statements, with the use of ratios and financial flows, for the purpose of being able
to evaluate a company's overall business framework, with respect to its capital,
financial position, earnings and liquidity. The second part of the course will look
at various methods and techniques for cost calculation, economic analysis and the
simulation of earnings and financial position. The extensive use of case analysis
will give students the chance to interpret financial and earnings data from a
problem-solving perspective.
LEARNING OUTCOMES
At the end of the course, the students should be able to:
- Reclassify financial statements according to pre-set criteria.
- Prepare the statement of changes in financial position.
- Extract financial statement date from databases such as AIDA, Amadeus and
Orbis.
- Carry out analyses of financial statements through ratios.
- Interpret the trend in earnings and financial position for a company.
- Evaluate earnings and financial performance of a company.
- Calculate the product cost.
- Develop a profitability analysis consistent with the decision-making framework.
- Identify performance measures suitable for each organisational unit.
- Prepare the master budget.
COURSE CONTENT
Module I – Financial Statement Analysis
PART I - Analysing Financial Statements Through Ratios
- Reading and interpreting financial statements.
- Financial statement analysis: purpose and methods.
- Formats for the reclassification of the income statement and the balance sheet.
-
Definition and significance of the main indicators of solidity, profitability,
liquidity and growth.
PART II - Statements of Change in Financial Position: Construction /
Interpretation
- Statement of changes in financial position: purpose, contents and structure.
- The various types of formats for the statement of changes in financial position.
- Methodology for constructing the statement and its potential information
content.
READING LIST
Required reading:
C. TEODORI, L’analisi di bilancio, Giappichelli, Turin, latest edition.
Recommended reading:
R. SILVI, Analisi di Bilancio: la prospettiva manageriale, Mc Graw Hill, 2012.
A. PROVASOLI (compiled by), Bilancio d’Esercizio, Letture e Casi, Egea, 2005.
C. TEODORI, La costruzione e l’interpretazione del rendiconto finanziario, Giappichelli, Turin, latest
edition.
The course presupposes that the students have a good knowledge of general accounting and
financial statements.
TEACHING METHOD
Lectures on theory, assignments, group projects.
ASSESSMENT METHOD
Students will be graded on the basis of a mandatory written exam. In the case of students
attending class on a regular basis, the grade will also take into account an assessment of the
group projects.
Module II – Planning and Control
COURSE CONTENT
The course program is divided into three sections:
- Analysis and management of costs: terminology, concepts and classifications;
cost analysis, cost-volumes-results analysis, economic analyses for decisions in
the short run.
- Planning of cost computation systems: methods and techniques for computing
costs.
- Planning and simulation models for earnings results and financial position: the
master budget and the budget control process.
READING LIST
All students will need to study the following textbook in preparing for the exam:
A. ARCARI, Programmazione e controllo, McGraw-Hill, Milano, 2013
Recommended reading for further study:
Programmazione e controllo, R.H. GARRISON-E.W. NOREEN, Managerial Accounting per le
decisioni aziendali, Mc-Graw Hill, 2004.
Recommended exercise book:
A. CAGLIO-A. DITILLO (compiled by), Esercizi e problemi di programmazione e controllo, Mc Graw
Hill Editore.
Alternately:
A. PITZALIS-A.. TENUCCI, Strumenti per l’analisi dei costi – Esercizi e casi di cost accounting,
Giappichelli Editore, Turin, 2005.
F. MIROGLIO-G. TOMASI, Programmazione e controllo, Egea, Milan, 2003.
TEACHING METHOD
The course programme will be developed through lectures on theory, analysis and
discussion of business cases, and the completion of assignments. The different instructional
methods have the common objective of having the student develop and use planning skills
and quantitative calculation methods for different economic aggregates in various decisionmaking cases and in different sectors.
ASSESSMENT METHOD
The final exam will be a written test covering the entire programme, including the cases
discussed in class.
NOTES
Further information can be found on the Faculty notice board.