MGM320H5S LEC0101

Financial Statement Analysis and Interpretation

Course Outline - Winter 2024

Course Description

This course will provide an understanding of financial reports, and their use for investment and management decisions. Cases will be used to enhance problem-solving skills and will integrate ideas from finance, management and financial accounting and other areas of study. The course focuses on the interpretation and use of financial statement data for the purpose of assessing the financial performance of a business operation, not on the technical details of accounting rules.

Prerequisite: MGT120H5 or MGM221H5

Exclusion: MGT224H5 or MGT322H5 or MGT225H5 or RSM221H1 or MGAC01H3 (SSc) Distribution Requirement: SSc

Course Objective

The objective of financial statements is to provide information about the financial strength, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions. Readers of financial statements should be able to understand them and to develop a deeper appreciation of what the state of the company is from several perspectives, including operations, balance sheet strength and strategic direction. Reported assets, liabilities and equity are directly related to an organization's financial position and strength. Reported income and expenses are directly related to an organization's financial performance. The notes to the financial statements, the Management Discussion and Analysis (MD&A) and CEO's letter  are all part of the financial report that students will be expected to be able to interpret by the completion of this course.

On completion of this course you will:

1.  Be able to read a full set of financial statements and understand the overall situation, direction and capacity of that company

2.  Understand the role and limitations of financial statements as a source of information about companies and their prospects

3.  Develop an understanding of the components of the financial statements and how to interpret specific accounts represented in those statements

4.  Be able to describe key aspects of  "quality of earnings" including how management decisions can affect this concept

5.  Be able to compute and analyze financial ratios, and cash flow measures of operating, financing and investing performance of a company relative to key competitors and historical performance

6.  Apply the financial statement analysis framework to a variety of decision contexts (E.g. Equity analysis, Credit analysis)

Textbooks and Other Materials

Financial Statement Analysis & Valuation. Easton, McAnally, and Sommers. 6th Ed. Cambridge Business Publishers. ISBN: 978-

1-61853-360-9

Assessment and Grading Policies

Note that the Course Schedule, Assessment and Grading Policies detailed in this course outline are contingent on class delivery staying unchanged. The course outline may change at the instructors' discretion under unforeseeable circumstances, e.g. lockdown due to COVID. For example, ifwe are required to ofer courses via remote delivery during the semester, the instructor will make the necessary adjustments, including, but not limited to, the nature and timing of assignments and tests, reweighting ofcourse assessments, and other course content. These changes will be communicated via Quercus.

Requirements and Criteria

Term Test (25%)

The term test will be open book with two hours in duration, covering specific topics as identified in class. Time management during the term test is extremely important. An appeal for regrading a term test shall be submitted, via emails, within seven days from the    date when the term test paper is available for viewing.

Final Exam (30%)

The final exam will be open book with two hours in duration, and will be held during the formal examination period. The final exam will cover specific topics as identified in class. Time management during the final exam is extremely important.

Course Participation (10%)

Students should actively participate in various learning activities, such as preparing before class, asking and answering questions in class, and making other contributions (e.g., contributing to online discussions at Quercus) that help foster the positive learning environment. Students' full engagement level at the course is expected to go well beyond participation during lectures.

Students should expect a minimum of six hours per week of additional course work beyond lecture times. The professor

will closely track a student's engagement and effort level throughout the course by using a variety of methods. Marks in this category are awarded at the discretion of the professor.

To create an ideal learning environment, students are expected to handle themselves in a professional manner, in and out of this course. Certain inappropriate behaviors, such as being absent from class for no valid reason, coming to class late, leaving class  early, making disruptions while class is in session, and grade grubbing, do not befit a professional class. A student may lose a significant percentage of the mark for unprofessional behaviors.

Group Assignment (25%)

Students will complete one group assignment. Each group will have approximately four members, and groups will be finalized by the professor. Group assignments are required to be submitted to Turnitin by the deadline.

Textbook Assignments (2.5% each, 10% in total)

Four textbook assignments will be given throughout the semester. The purpose of these assignments is to ensure that students periodically review course materials, work on assigned problem sets, and make timely progress in this course.

Please note that your Midterm and Final Examfor this course will be written on a laptop computer in the classroom. You will therefore need to bring a laptop computer to class for your Midterm and Final Exam. Ifyou do not have access to a laptop for your Midterm or Final Exam, please email me by the end of the first week of the semester.

Conduct of Class

You are expected to check Quercus regularly for course related material, including recommended problems, news articles, etc. You

are responsible for all content posted on Quercus. Important announcements may be posted on Quercus periodically, so you are

advised to check there frequently for updates.

Procedures and Rules

Special Consideration Request for Academic Accommodation Request - Missed Tests & Quizzes (term work only, no final exams):

To be considered for academic accommodation for missed tests and quizzes (ONLY), please follow the appropriate next steps

depending on your circumstance (i.e. illness related or non-illness related). Do NOT submit a petition for final exams. Final exam deferrals must be submitted through the Registrar's Office. Extension of time requests should follow the same process.

Special Consideration Request Application: https://uoft.service-now.com/utm_scr Illness or Non-illness Related Next Steps

1.  Inform. your professor in writing (e-mail is acceptable) no later than 24 hours after the test or quizdate of any

circumstances that prevent you from writing a test or quiz. Failure to do so will result in your special consideration request petition being denied.

2.  Submit an online Special Consideration Request as soon as possible, but no later than 72 hours after the test or quiz date. Failure to do so will result in your request being denied. Special Consideration Request Application:

https://uoft.service-now.com/utm_scr

3.  Provide your supporting documentation on the Special Consideration Request Application by attaching screenshots   or relevant documents within one week of the missed test/quiz. Supporting documentation may include a screenshot of   the Absence Declaration tool on ACORN. Please ensure the dates identified in your absence declaration include the actual test or quiz date, if applicable. Please refer the course outline for term work exclusions from use of Absence

Declaration. The Department requires supporting documentation (such as Verification of Illness form) ifyour course

outline excludes test/quiz from the one-time ACORN declaration. Illness related documentation include the Verification of Illness form. which must be in English and completed by a practitioner registered and licensed in the Province of

Ontario with original signature and business stamp. Non illness related documentation will vary but a death in the family requires submission of a death certificate. Requests without supporting documentation will be denied.

IMPORTANT

.  Failure to follow this process will result in your Special Consideration Request being denied.

·  If your form. is not completed correctly with the necessary details to assess your Special Consideration Request, your request may be denied.

   In the case of an illness, you need to follow the specific Missed Tests requirements for your course (see Missed Tests section below).

   You may receive a follow up email or response on the Special Consideration Request Application from the UTMM petitions committee. If so, you MUST respond within 24 hours.

   If there is concern about your Special Consideration Request, your request may be refused and/or you may be asked to meet with an Associate Chair or Program Director.

   If you have multiple Special Consideration Requests your request may be refused.

   If you do not complete the make-up work as and when required, you will receive a grade of zero for the original missed test; further special consideration is not permitted.

Holidays and pre-purchased plane tickets, family plans (unless critical, such as death of an immediate family member), your

friend's wedding, lack ofpreparation, or too many other tests are not acceptable excuses for missing a quiz, a test, or an item of course work.

The written explanation and documentation that you submit represents an appeal from you, which requests the opportunity to account for that portion ofyour grade in an alternate manner than the normal one that is described in this course outline. If an

appeal is not received by the deadline specified above, or if the appeal is deemed unacceptable, you will receive a grade of zero.

Missed Test(s):

The midterm test is excluded from the one-time absence declaration. If you miss the midterm test (for a legitimate illness or non-    illness reasons), you are required to provide documentation with your online Special Consideration Requests, as per point 3 above.

To ensure that at least 15% of the final grade is returned to students by the course drop deadline, students who have missed a term test but are eligible to get the term test reweighted to the final exam may need to take a special term test. The special term test will be accounted for such a percentage of the final grade that the 15% rule is satisfied.

Late Assignment(s):

No late assignments will be accepted.

Final Exams:

Students who cannot complete their final examination due to illness or other serious causes must file an online petition within 72 hours of the missed examination. Late petitions willNOT be considered. Upon approval of a deferred exam request, a non-refundable fee of $72 is required for each examination approved.