Strategic Financial Statement Analysis

BUS424E Strategic Financial Statement Analysis

Autumn 2021

  • Topics

    This course provides the key competences to understand and independently evaluate financial statement information and accounting data. Are the results satisfying? Has the management performed well and deserves a bonus? Is the company financially constrained? How should an investor read corporate accounts? BUS 424 E will enable students to answer these questions.

    Lecture plan:

    • Introduction to financial statements, accounting data and reporting incentives
    • IFRS standards, accounting choices and necessary adjustments for an insightful analysis
    • Reformulation of financial accounts for analysis purposes
    • Analysis of profitability, growth and liquidity
    • Prospective analysis: forecasting future earnings and cash flows
    • Credit analysis and assessment of distress probability
    • Assessment of management performance and preparation of incentive schemes

  • Learning outcome

    Knowledge  - The student will upon completion:

    • Acquire substantial knowledge of profitability, growth and liquidity analyses using financial statements, accounting data and key performance indicators
    • Be able to identify the most suitable analysis from the perspectives of external capital providers and those who internally decide and monitor investment and financing policies
    • Understand and independently evaluate managers’ accounting choices and accounting quality; including their effect on key figures and financial statement analysis
    • Learn how to improve the quality of accounting data for analysis purposes 

    Skills  - The student will upon completion:

    • Be able to apply concepts and principles to conduct relevant analyses of profitability, growth and liquidity using financial statements and accounting data
    • Learn how to perform these analyses from the perspectives of different users: an investor, a creditor / bank and those who internally appraise management performance
    • Be able to identify important areas for flexibility, assess the quality of corporate accounts and make the necessary adjustments so that accounting data is better suited for analysis
    • Understand and independently evaluate the consequences of accounting flexibility for key performance indicators and financial statement analysis

    General competences  - The student will upon completion:

    • Learn how to communicate key results and areas for improvement both in writing and orally
    • Understand the main academic theories and empirical findings related to financial reporting, analysts forecast and distress prediction

  • Teaching

    The lecture plan is accompanied by weekly seminars. Seminars typically take the form of a discussion of a specific problem set, business case or research article. Lectures and seminars can be attended physically or virtually through live streaming. Recordings of all lectures will be made available.

  • Credit reduction due to overlap

    BUS424E cannot be combined with BUS424N or the expired BUS424.

  • Requirements for course approval

    Group presentation held either physically in the classroom or virtually through live streaming

    Retake: Previously awarded course approval is valid also when requirements for course approval has been changed. Course approval is valid for all variants of BUS424, independent of suffixes (-E, -A, -N, or similar).

  • Assessment

    Individual digital home-exam (4 hours)

  • Grading Scale


  • Computer tools

    Book companion site, some applications in Excel and Stata

  • Literature

    Main textbook:

    • Palepu, Healy, and Peek, 2019. Business Analysis and Valuation: IFRS Standards Edition, Cengage, Fifth edition. [ISBN: 978-1-4737-5842-1]

    Supplemental readings:

    • Business cases, research articles, news and other study material are given by the lecturer


ECTS Credits
Teaching language

Autumn. Offered Autumn 2021.

Course responsible

 Simone Traini, RRR