MIDDLE EAST TECHNICAL UNIVERSITY
Department of Business Administration
BA 4818 & BA 5818 – Analysis of Financial Statements
Spring 2014-2015
Hande Ayaydın Hacıömeroğlu
Office: H 121
Phone: 210-2044
Email: hande@metu.edu.tr
Office Hours: Tuesday-Thursday 15:30-17:00
Course Prerequisites:
This is not an introductory accounting course, but an intermediate course thus I expect each
student who enrolled in BA4818 (BA5818) to have completed a Financial Accounting and
Management course (BA 1402 or BA 5401 or their equivalent and BA 2802 or BA5802 or
their equivalent). Also, students should have completed basic courses in economics and
statistics. Moreover it is better if they are capable of using a spreadsheet program like
EXCEL.
Course Credit: 3
Class Days: Tuesday-Thursday
Class Hours: 11:45-13:00
Location of the Class: G 108
Course web page: http://odtuclass.metu.edu.tr
Students are a natural member of ODTU Class. All the course material including power point
slides and solutions to end of chapter problems, your grades, assignments and announcements
will be posted there. In order to not to miss anything, please check your METU email
accounts regularly.
Course Description
Any analyst should be able to examine the financial tables and decide about the financial
position of these companies. The lecture includes the in debt analysis of the financial
statements; balance sheet, income statement and cash flow statement. Furthermore, the
students will know the analysis of investing, financing and operating activities.
Course Objectives:
Financial statements are employed to measure the financial condition and operating
performance of the companies. Thus, an investor has to understand the meaning of the figures
in financial statements before deciding to invest. At the end of this course the students knows
how to interpret the figures in financial statements such as the balance sheet, income and cash
flow statements and analyze the financial position of the companies.
Learning Outcomes:
The students who take the course will be able to:

Find the information s/he needs in order to analyze the financial condition of the
company
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
Understand the details of the accounts in balance sheet, income statement, and cash
flow statement

Verify the different stockholders of the company

Calculate the financial ratios and interpret them

Identify the strengths and weaknesses of the company
Tentative Course Schedule (Subject to Change)
Date
Title
Feb. 17
Introduction
Reading
Overview of Financial Statement Analysis
Chapter 1
Feb. 19
Overview of Financial Statement Analysis
Chapter 1
Feb. 24- 26
Financial Reporting and Analysis
Chapter 2
Mar. 3-5
Cash Flow Analysis
Chapter 7
Mar. 10-12
Return on Invested Capital and Profitability Analysis
Chapter 8
Mar. 17-19
Prospective Analysis
Chapter 9
March 24-26
Credit Analysis
Chapter 10
Mar. 31-Apr 2
Equity Analysis and Valuation
Chapter 11
Apr. 3
Interim Exam I (Chapters Included: 1, 2, 7 ,8 ,9, 10)
Apr. 7-9
Analyzing Financial Activities
Chapter 3
Apr. 14-16
Analyzing Investing Activities
Chapter 4
Apr. 21-28
Analyzing Investing Activities: Incorporate
Investments
Chapter 5
Apr. 30-May 5
Analyzing Operating Activities
Chapter 6
May 7-12
Guest Speaker/Case Discussion
May 14-21
Project Presentations
May 22
Interim Exam II (Chapters Included: 11, 3, 4, 5, 6)
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Please be aware that there are no finals in this lecture therefore there are
no re-sit exams.
Reading Material:
Required Textbook: “Financial Statement Analysis” Tenth Edition by Subramanyam, K. R.
and Wild, J. J.
Grade Determination:
The end of semester grades will depend on the judgmental evaluation of the student
performance by the instructor as in other courses. In order to give an idea the weights (the
weights are subject to change) of the different course requirements are presented below.
Interim Exams
Case Discussion
(including peer group evaluation)
Course Project and Presentation
(including peer group evaluation)
Quizzes and attendance:
29% each
12%
20%
10%
Course Requirements:
Exams:
There will be two interim exams. There will be no make-up exams. No exam makeups will be given, except for extreme reasons. If you believe that you have an extreme
reason, please try to notify me in writing before the exam and obtain my permission for not
taking the exam. Please make sure that you add all supporting documents to your letter. If
you cannot notify me before the exam, then please try to do so as soon as possible after the
exam. If I am convinced that you had an extreme reason, I will let you take a comprehensive
make-up exam. All students who missed an exam with a valid reason during the semester
will be asked to take a comprehensive exam that will be given during the period of final
exams regardless of which exam they missed during the semester.
Comprehensive Case
I will assign each student into groups of 3 or 4 students, the number of group members will be
decided for you after the registration period. Each group will prepare a written (word
processed) analysis of the case no longer than 7 pages excluding exhibits and tables. The
report should have at least 2.5 cm left indent and 1.5 line spacing. At the end of the term each
of you will be required to provide an evaluation of the contribution of each of the group
members to the group's output. The comprehensive case will be due on May 12 lecture
hours. Please be aware that you will have only 5 days to finish your report.
Course Project and Presentation:
The course project will held in groups. You form your own groups of 3 to 4 students and the
number of group members will be decided for you after the registration period. You are
required to choose a company which is listed in Borsa İstanbul to examine and obtain its
financial statements. You must register your choice with the lecturer and obtain the
approval. At the end of the semester you will have to present and discuss your main findings.
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You can use visual aids in your presentation. In addition, at the end of the term each of you
will be required to provide an evaluation of the contribution of each of the group members to
the group's output. The project will be due on May 14.
Quizzes:
There will be unannounced quizzes at the end of some classes. You will be asked one or two
questions about the material covered in that lecture or the previous lectures. There won’t be
any make-up quizzes.
Classroom Requirements:
 Please do not enter late. If the door of the classroom is closed then it means the lecture has
started.
 If you have an excuse to be late then please inform me before the lecture.
 Please keep your mobile phones switched off during the lecture.
 Important: The students are expected to send their pictures to the lecture via mentioned email address until 27th of February, 17:00 p.m.
The message subject must be: BA4818-photograph
The photograph filename must be: yourlastname-yourfirstname.jpg (or .gif)
The attached photograph file must not be excessively large (<200kb)
Middle East Technical University
Department of Business Administration
Rules of Academic Honesty
Cheating: All university, faculty, and department principles on academic honesty will be
strictly enforced. The usual consequence for academic dishonesty is failure in the course and
additional disciplinary action. Examinations are individual and are to be completed without
unauthorized outside assistance. Persons observed cheating during examinations will
automatically receive a failing grade in the course. Homework assignments are individual,
unless otherwise specified by the instructor, and are to be completed without unauthorized
outside assistance as well. Persons observed cheating in their homework assignments will
receive a score of zero for the portion of the semester grade that is allocated to such
assignments. In addition to the consequences above, the instructor will initiate disciplinary
action against the student(s) involved in academic dishonesty.
Plagiarism: The instructor assumes that students will do their own work. By placing their
names (individual or team) on assignments, students are affirming that the contents are their
original work. Ideas should be stated in the student’s own wording. Violation of this
provision will be considered as unethical behavior, subject to disciplinary action. If you have
any doubt about the use of a specific material, see the instructor ahead of time.
Civility in the Classroom: Students are expected to assist in maintaining a classroom
environment which is conducive to learning. In order to assure that all students have an
opportunity to gain from time spent in class, students are prohibited from using cellular
phones or beepers, eating or drinking in class, arriving late or leaving early without prior
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permission, or engaging in any other form of distraction. Inappropriate behavior in classroom
shall result in, minimally, a request to leave class.
Examination Rules: Students must present a valid METU Student ID before they can be
allowed into the examination rooms. Those students who cannot present this ID will not be
allowed into the examination room under any circumstances. Cellular phones must be turned
off and stowed away during the examinations. Students whose phones are observed to be
turned on and/or not stowed away will receive a score of zero for the examination.
Student Disabilities: Any student, who, because of a disabling condition, may require special
arrangements in order to meet course requirements, should contact the instructor as soon as
possible. Students should present the appropriate documentation from the university’s
Disability Support Office (Engelsiz ODTÜ Birimi, ODTÜ Kütüphanesi, Solmaz İzdemir
Salonu, Tel: 210.7196; engelsiz@metu.edu.tr) verifying their disability, and outlining the
special arrangements required. Please note that no accommodations will be provided to the
disabled students prior to the completion of this approved University process.
Know your rights and responsibilities!
http://www.oidb.metu.edu.tr/yonetmelik/index.html
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