Financial Statement Analysis

Outline:

The goal of the course is to teach students how to perform financial statement analysis and business valuation. It introduces corporate reporting as one of the main information sources for business decision makers and provides insights into the usefulness and limitations of financial statement analysis in different decision contexts (e.g., investment decisions).

Students learn the financial statement analysis tools that enable them to practically conduct business valuation, including industry and corporate strategy analysis, accounting analysis, financial analysis, forecasting methods and valuation models.

Learning Outcomes:

After completing this course the students will have the ability to:

• Use IFRS-based financial statements as one of the main sources of information for conducting a wide range of business analyses, such as

  • Link a firm’s accounting information with its strategy;

  • Identify red flags of potential misrepresentation in financial statements;

  • Reformulate financial statements (i.e., balance sheet, income statement and cash flow statement);

  • Make accounting adjustments to “undo” accounting distortions and to properly capture a firm’s economics;

  • Compute a firm’s financial ratios and interpret ratios from an analyst’s perspective;

  • Use financial ratio analysis to evaluate a firm’s operating, investment and financing efficiency;

  • Forecast financial statements;

  • Value a firm using various valuation techniques such as valuation multiples, dividend discount model, discounted cash flow model and discounted abnormal earnings model.

• Apply common tools of financial statement analysis to conduct a comprehensive analysis

• Prepare forecasted financial statements as the basis for valuation 

• Apply accounting-based valuation models

After completing this course the students will also have the ability to: 

• Confidently conduct financial statement analysis in various decision contexts (like from the perspective of managers, security analysts etc.)

• Recognize the most important aspects of the analysis depending on the decision context

• Acknowledge the need for and potential sources of additional information required for conducting a comprehensive analysis

Formulate a final valuation decision resulting from the comprehensive analysis

Teaching Method:

The teaching material is based on an international text book. Part of the material is presented during lectures and part of it is intended for self-study. Numerous examples and cases of European firms are used to support the discussion of business analysis and valuation throughout the course. Working through problems and exercises, at the lectures and individually, further reinforces the material covered and encourages analytical thinking.

International Accounting Research

Outline:

The course will cover selected topics in accounting theory, accounting research and methods in positive accounting research. After a comprehensive introduction on how to strategically read and comprehend research papers, we discuss selected topics in accounting research and theory supported by examples. The course aims at providing students with answers to the big picture question on why accounting standards and accounting practices are designed and undertaken as they are today. Specifically, we try to provide answers to the following questions:

Under which conditions can accounting information help to improve investment decisions of investors?

• How do capital markets process accounting information (earnings announcements, annual reports, quarterly reports etc.)?

• Is accounting information useful to investors? To what extent and under which conditions?

• Is accounting information relevant in the context of the Conceptual Framework? Under which conditions?

• Is accounting information reliable in the context of the Conceptual Framework? Under which conditions?

• Why and how do managers manage earnings? Is earnings management always adverse? Why/Why not?

Under which conditions can accounting information improve the efficiency of contracts (e.g. compensation contracts to motivate managers or debt contracts)?

Learning Outcomes:

After successfully completing this course, students will have a better understanding of accounting theory and why accounting is practiced as it is practiced today. The course will help students to get a deeper understanding on accounting helping them to better learn, understand and evaluate accounting standards and regulation in the future. Overall, the course intends to shape students' critical mindset.

Additionally, the course is intended to provide students with a step-by-step framework to read and analyze research papers helping them to be better prepared to write a Bachelor’s thesis not only in the area of accounting, but also Finance etc.

To provide students with the technical skills to read and understand research in international accounting (and other areas such as finance), the course will provide students with a step-by-step framework to read and analyze research papers in the area of international accounting. Specifically, after successfully completing this course students will be able to

• read and understand research papers in international accounting. Specifically, after successfully completing the course students will be able to

  • understand how academic papers are typically structured,

  • identify an academic paper’s research question and its motivation,

  • identify the theoretical body of an academic paper and its hypotheses and/or predictions,

  • identify the methodological approach used in the paper to answer the research question,

  • identify the results of an academic paper and put them into perspective.

• conduct a thorough and comprehensive literature review of a given research question and/or topic. Specifically, after successfully completing the course students will be able to

  • search and retrieve academic papers in international accounting research using common databases,

  • find related and similar literature for a given academic paper,

  • place academic papers in a body of prior academic research related to the research question,

  • differentiate between different stages of academic research (working paper vs. publication),

This course will not provide students with the following skills:

1. Students will not learn how to cite and manage academic research. The WU library specifically provides courses for students who are interested in this topic.

2. Students will not learn about formalities of academic research.

Teaching Method:

The course provides a good overview on accounting theory and related research covering the most important studies in the area. Research is discussed based on a given framework to read and analyze research papers. Examples are given throughout the course for better understanding. Students will have to carry out a small project on their own to deepen the knowledge. 

Planning Simulations

Outline:

Am Beispiel eines Unternehmens wird mit Unterstützung einer Planungssoftware ein Fallbeispiel zur integrierten Planung im Plenum erarbeitet. Vor allem der Fokus auf die Finanzplanung wird speziell diskutiert. Über die Szenariotechnik werden verschiedene Ansätze in der Unternehmenssteuerung dargestellt. Zusätzlich wird auf die Zusammenhänge Rating, Bonität, Basel II bzw. der Dialog mit den Banken eingegangen.

Learning Outcomes:

Nach Abschluss dieses Kurses sind die Absolventen und Absolventinnen in der Lage:

• Die Zusammenhänge einer integrierten Unternehmensplanung zu verstehen und anzuwenden.

• Szenariotechniken im Zusammenhang mit einer integrierten Unternehmensrechnung anzuwenden.

• Eine Planungssoftware zur Unterstützung der oben angeführten Aspekte anzuwenden.

• Betriebswirtschaftliche Kennzahlen zu ermitteln, zu verstehen und zu interpretieren und Einsatzmöglichkeiten für die Steuerung von Unternehmen - im Speziellen zur Bankensteuerung - im Vergleich zu evaluieren.

• Diese Aspekte mit dem Einsatz einer Controllingsoftware zu verknüpfen.

Nach Abschluss dieses Kurses sind die Absolventen und Absolventinnen weiters in der Lage:

• Die Fähigkeit zur Zusammenarbeit in Gruppen zu zeigen, Gruppenarbeit zu organisieren und konstruktiv an der Lösung von an einzelne Gruppen gestellte Problemstellungen beizutragen.

• Im Team die Zusammenhänge einer Unternehmensplanung zu reflektieren und IT-Unterstützung zu evaluieren

Teaching Method:

Die Lehrveranstaltung ist vortrags- sowie beispielorientiert. Einführend erfolgen in der ersten Einheit Vortragselemente, um Hintergründe, ggf.Rechentechniken und Methoden, die der IT-Umsetzung zu Grunde liegen,vorzustellen. Darauf aufbauend dienen kleine Praxisbeispiele zur Illustrationdieser Inhalte sowie zur Diskussion der Vorgehensweise.Interpretationsmöglichkeiten und praktischer Anwendungsgebiete, insbesondere in Hinblick auf bestimmte IT-Umsetzungsmöglichkeiten bauen auf diese Elemente auf. Zur Vertiefung des Verständnisses werden dabei aktive Diskussionsbeiträge der TeilnehmerInnen gefördert bzw. sind eigenständig Problemlösungen für vorgegebene Problemstellungen zu erarbeiten.

Non Financial Accounting

Outline:

This course deals with relevant concepts and standards in the fields of non-financial accounting, adressing the question of how to measure and report on the non-financial performance of companies (and other entities). It covers sustainability accounting (esp. based on the GRI's SRS), integrated reporting (based on the IIRC Framework) and non-financial reporting as established by the NFRD (Non-Financial Reporting Directive) in the EU. Furthermore, an outlook on recent developments is given, especially with regards to the proposed new Corporate Sustainability Reporting Directive (CSRD). Besides external reporting purposes, also relevant implication for management accounting, finance and valuation are outlined.

Learning Outcomes:

At the end of the course, students are able to assess the relevance of non-financial information for corporate practice and analysis, including the link between financial and non-financial performance. Especially, they are able to distinguish different types of reporting standards and the information included in them. They have a deepened understanding for the processes and requirements underlying such reports and can derive implications for managing companies.

Teaching Method:

The course comprises two parts: the first part gives theoretical inputs about relevant frameworks for non-financial accounting (as well as their implications for financing and valuation) and the necessary processes for drawing up reports about the non-financial performance of companies. The second part focusses on supporting students to work with and interpret such a report in order to give them further practical insights into the subject matter.

The first part of the course consists of lectures, practical examples and discussions. The lectures are partly based on international textbooks and partly on the texts of relevant standards. Relevant chapters in the books and additional material will be announced and partly also provided throughout the course. Please note that some of these materials are only available in German.

In the second part of the course, students work out case studies and get the opportunity to present them to as well as discuss them. In doing so, they are coached so that they get practical insights into the required processes that underlie non-financial reports.