Management

SMN 352- Financial Statement Analysis and Security Valuation

Aditi Gupta, King’s College London

Week 1 (Tuesday 21stJanuary, 2016 3-4.30)

The main objectives of this session are to introduce students to the course and provide a context for financial statement analysis. This session provides a brief guideline on the preparation of the three main financial statements (income statement, balance sheet and cash flow statement) and key accounting principles. The lecture also introduces international financial reporting standards (IFRS).

Readings

Background: Any basic financial accounting text to recap preparation and content of financial statements and accounting principles. Students should understand the components of an income statement (revenue and expenses), balance sheet (assets, liabilities and equity) and cash flow statement and explain general accounting principles before starting this course.

Essential: PHP Chapters 1, 4 (skim), 9 (pp 381-384)

Additional: Posted on Keats

• Factsheet for the FTSE 100 (Under ‘Coursework’)

Coursework Tasks Week 1-2: PART 1

The coursework is an ongoing project where you will receive instructions each week. The final objective is to apply financial analysis tools and write a professional equity report on a company of your choice

• Students should work in pairs ideally (2 members).

• Choose a FTSE 100 company. Note: ONLY One student team per company.

• Sign up sheet posted on my door (1.49a). Sign up (first come first ‘served’) by 3rd February

• Choose a possible competitor or set of peer firms for the chosen firm.

• Download the annual report for the past 3-5 years of the company and a competitor. (Use company website/Thomson one-banker/London stock exchange website/OSIRIS).

• Track the share price of the company and competitor firm and the FTSE 100 index level from ‘today’ till submission. Check the historical price performance of your company.

• Identify and collect any...