This subject introduces students to the fundamentals of financial analysis and the various techniques to analyse company financial statements. The subject reviews the accounting and reporting regulatory framework, examines the components of financial reports and the information they can provide to investors, looks at how corporations are financed and explains dividend imputation. It examines the application of financial ratios and introduces students to fundamental valuation concepts and the process of undertaking a company valuation.
There are no prescribed texts for this subject. Details of supporting texts/readings are provided in the subject notes. Retailers of educational books include Co-op Bookshop and Boffins Bookshop. Texts can also be borrowed from the Kaplan library or other libraries.
At the completion of this subject students should be able to:
- Explain the financial reporting framework, key accounting concepts and the components of financial statements
- Explain how corporations are financed, the needs of their shareholders and the calculation of dividend returns to various types of shareholders
- Calculate a company’s working capital, profitability and market performance ratios using its annual report
- Assess the company’s performance using the results of the financial ratios calculated to make an investment recommendation
- Explain key valuation concepts and the valuation process.