Topics
-BUS 437 is an applied comprehensive course that integrates accounting standard-setting with financial analysis and company valuation. In particular, students are taught how to read financial statements and form opinions on companies¿ past, present and future performances. Our main objective is to enable participants to independently analyze accounting information when determining the value of a business entity. As such, BUS 437 is right on the edge between financial accounting and corporate finance/asset pricing.
BUS 437 is particularly suitable for students who desire a good understanding of how to read and perform analyses on the basis of financial statement information. Having such skills is often critical even when students do not wish to pursue a career in financial accounting and auditing.
Please note that the department of Accounting, Auditing and Law offers a number of individual courses that cover the areas of accounting standards (e.g. BUS 402), financial statement analysis (e.g. BUS 424) and company valuation (e.g. BUS 425/440). Students specializing in financial accounting might benefit more from following these courses. BUS 437 can be combined with BUS 402 (a `kjernekurs'), but not with more than one of BUS 424, BUS 425 and BUS 440.
Details
In 2005 publicly listed firms across Europe adopted International Financial Reporting Standards (IFRS), and today companies located in more than 100 countries use IFRS. Because having a solid knowledge of IFRS is key to working in today's global business world, these accounting standards form the backbone of BUS 437. The first half of the course we spend on learning how to use accounting information produced under IFRS. The emphasis is consistently on improving students' skills in identifying troublesome areas (often those where `earnings management' is frequent), and comprehending major areas of analysis (such as the use of `unusual items' or `intangible assets'). Gradually, we introduce the second part of the course: financial statement analysis. In this section we learn how to reclassify individual accounting items and make use of larger building blocks (such as `operating assets' and `financial assets').
In the end of the course we study how knowledge of past performance can be used in forecasts of the future. Modeling the future can never be an exact science, and hence our emphasis is to offer structured analytical models where the analyzed information can be entered. When doing so, we use important financial concepts (such as the `cost of capital' and `discounting techniques').
Our objective when teaching BUS 437 is to be as applied as possible. During the semester students are confronted with innumerous individual case analyses based on financial statements of various European companies. In addition, we employ an integrated case analysis of the Finnish company Nokia. The aim with the lectures is to help students comprehend and apply an analytical structure when performing the practical analyses.