Accounting and Financial Statement Analysis

Accounting and Financial Statement Analysis
Text under revision. Not yet approved by academic staff.
The course aims to familiarise first-year students with the study of financial
statements for going concerns. Starting from accounting terminology, the course
looks at issues concerning the determination of annual income generated from
operations and the related working capital. The values that originate from business
dealings must be recognized, classified and registered in order to allow for
constructing periodic summaries about the components of working capital and
earnings. The valuation of the components of income and capital as part of the
reporting to stakeholders are the final elements of the theoretical framework
concerning annual financial statements. Another objective of the course is to
provide the student with tools for reading and analysing financial statements, from
a business-financial perspective. The course will also present reclassification
techniques and analyses of ratios and financial flows for the purpose of evaluating
the overall business profile of a company from the standpoint of its capital,
earnings and financial position.
- An understanding of the valuation criteria defined by national accounting
principles and some of the criteria contained in the international accounting
principles (IAS/IFRS).
- An understanding of the methods for preparing corporate financial statements, in
accordance with prevailing regulations in Italy.
- A capacity to analyse and interpret trends in earnings, financial position, and the
capital accounts in relation to business management, with the construction and
interpretation of the main financial statement ratios and the statement of changes
in financial position.
Module 1 – Financial statements
- The financial statement information system: functions, addressees, and structure.
The rules of reference and international accounting principles (overview).
The notes to the financial statements and the report on operations.
Financial statements prepared pursuant to the Italian Civil Code.
Valuation of inventories.
Valuation of commissioned work in progress.
Valuation of tangible and intangible fixed assets.
Valuation of financial assets (overview).
Valuation of receivables and foreign-currency denominated transactions/entries.
Valuation of reserves for risks and charges, and payables.
Income taxes (overview).
Examining and interpreting annual financial statements.
Module 2 – Financial statement analysis
- Formats for reclassification of the income statement and balance sheet.
- Definition and significance of the key indicators of solidity, profitability,
liquidity and growth.
- The statement of changes in financial position: purposes, contents and structure.
- Different configurations of the statement of changes in financial position.
- Methodology for constructing the statement of changes in financial position and
the statement's information potential.
P. ANDREI-A. M. FELLEGARA, Contabilità e bilancio, Giappichelli, Turin, 2014.
C. TEODORI, L’analisi di bilancio, Giappichelli, Turin, 2008.
C. TEODORI, Il rendiconto finanziario: caratteristiche, ruolo informativo ed interpretazione,
Giappichelli, Turin, 2009.
R. SILVI, Analisi di Bilancio: la prospettiva manageriale, Mc Graw Hill, 2012.
The course will be taught through lectures on theory and assignments.
Written examination on the entire course programme (Module 1 and Module 2).
Students attending class on a regular basis will have the option of being graded
based on a separate exam at the end of each of the two modules.
Further information can be found on the lecturer's webpage.