Financial Statement Analysis (ACC 405)

2022 Fall
Sabancı Business School
Ali Coşkun,
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Formal lecture,Interactive lecture
Interactive,Communicative,Discussion based learning,Project based learning,Task based learning,Guided discovery
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Financial statement analysis is concerned with extracting relevant information from a firm's financial statements to answer questions about that firm. This is a technical course which integrates finance and accounting concepts together with the appropriate tools of analysis. It will help students understand how businesses work, how value is generated, and how this value is (or is not) captured in the financial statements. Emphasis will also be given to interpreting information in financial statements in order to make sound credit, investing, and equity analysis decisions. Topics covered in the course will include a review of the related conceptual framework and the contents of financial statements as well as their footnotes, tools and procedures common to financial statement analysis, accounting and finance based valuation analysis tools, and preparation and interpretation of state-of-the-art credit and equity research reports.


This is a technical course bringing finance, accounting and valuation concepts together. It focuses on both the inputs and outputs of financial statements. The course asks how financial statements are prepared and what they tell and show ?in action.?
This course is about the analysis of financial information - particularly firms? financial statements - for making decisions to invest in businesses. The primary focus is on financial analysis and equity (share) valuation.. Topics include models of shareholder value, discounted cash flow approaches to valuation, the analysis of profitability, growth and valuation generation, forecasting earnings and cash flows, and the determination of price/earnings (P/E) and price-to-book (P/B) ratios.
The course will be taught with a view to designing techniques to be used in an (independent) equity research department or firm. Accordingly, the material is particular interest to those who want to work as buy-side and sell-side equity analysts who must issue a buy, hold or sell recommendations on stocks. However, much of the material covered in the course is also relevant to those students who want to work as investment bankers, consultants, public accountants, corporate financial analyst and private equity analysts, for evaluating acquisitions, restructurings and other investments, and for calculating the value generated by strategic scenarios. By the end of the course, the student should feel prepared in writing a thorough, credible equity research report or investment analysis.


  • At the end of this course, the students should be able to: 1. Evaluate effects of issues related to economic and business environment, and evaluate the market and companies performances 2. Analyze the business strategy of a company and the source of the competitive advantage to predict the sustainability of the growth and profitability of the company. 3. Comprehend the logic behind the Market Multiples valuation ratios and evaluate the market performance of Companies by using market multiple ratios 4. Interpret horizontal/vertical analysis 5. Conduct and interpret profitability, leverage, working capital, liquidity analysis 6. Analyze past financial performance, project the free cash flow and run Discounted Cash Flow analysis 7. Present their own analysis to the class covering competitive strategy, financial ratios, DCF Analysis, Multiples Valuation and investment strategy.


1. Understand the world, their country, their society, as well as themselves and have awareness of ethical problems, social rights, values and responsibility to the self and to others. 4

2. Understand different disciplines from natural and social sciences to mathematics and art, and develop interdisciplinary approaches in thinking and practice. 4

3. Think critically, follow innovations and developments in science and technology, demonstrate personal and organizational entrepreneurship and engage in life-long learning in various subjects; have the ability to continue to educate him/herself. 4

4. Communicate effectively in Turkish and English by oral, written, graphical and technological means. 5

5. Take individual and team responsibility, function effectively and respectively as an individual and a member or a leader of a team; and have the skills to work effectively in multi-disciplinary teams. 5

1. Have an understanding of economics and main functional areas of management

2. Have a basic all-around knowledge in humanities, science, mathematics, and literature

3. Have a basic knowledge of law and ethics, awareness of social and ethical responsibilities

4. Work effectively in teams and environments characterized by people of diverse educational, social and cultural backgrounds

5. Demonstrate proficiency in oral and written communications in English

6. Pursue open minded inquiry and appreciate the importance of research as an input into management practice; thus, a.know how to access, interpret and analyze data and information by using current technologies b.use the results from analyses to make informed decisions

7. Use office softwares for written communication, presentation, and data analysis

8. Demonstrate awareness that business settings present different opportunities and challenges for managers due to environmental/contextual differences that arise in economic, political, cultural, legal-regulatory domains


  Percentage (%)
Final 30
Quiz 30
Participation 10
Group Project 20
Homework 10



Financial Statement Analysis K.R. SUBRAMANYAM