COURSE SYLLABUS & OUTLINE

Course Title:
Reg. Number:

X 432.3 Financial Statement Analysis

252438

Quarter:

Winter 2015

Dates:

Wednesdays, January 7, 2015 March 25, 2015

6:30 pm 9:30 pm

Instructor:
Chee-Sum Tan, MBA, FCCA, CPA, CFA, ABV, CGMA has over 30 years of accounting and
finance experience. He has worked in public accounting, manufacturing, wholesale,
retailing, licensing, transportation and banking industries. Other works included
development of complex multi-billion dollar business planning models, financial and
accounting models, database applications for CPA firm clients and the Federal Deposit
Insurance Corporation. His academic and professional affiliations included a Masters of
Business Administration degree from Drake University, Fellow of the Association of
Chartered Certified Accountants, charter holder of the Chartered Financial Analyst
designation, Certified Public Accountant, and, Accredited in Business Valuation. Mr.
Tan had taught at the Level II Exam USC/CFA program and is an instructor at various
universities and colleges.
Contact:

cstan01@sbcglobal.net

Availability:

9:00AM 5:00PM Mondays Fridays

Location:

2232 School of Public Affairs Building, UCLA

(626) 524-1674

Course Description:
This course is intended for financial and credit analysts, CPA or CFA candidates, investors, business
managers, or individuals who are involved in real or personal property financing, leasing or credit analysis.
Focus is on the mechanics of financial statement analysis; balance sheets, income statements and cash flow
statements. Techniques to be used include ratio analysis, common size analysis and trend analysis. Skills
developed in this course are used in corporate, banking and investment settings.

Prerequisites:

At least two courses of financial accounting, or consent of instructor.

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Scope, Goals & Objectives:

The course is participative and requires critical thinking. Students will form teams of 3 to 5 members and
are expected to:
a) Analyze and evaluate liquidity (i.e. cash flow generation), profitability (e.g. return on equity),
operating efficiencies, and the impact of leverage on business risks and rewards.
b) Present findings and conclusions
c) Critique other team presentations and be subjected to critical peer review
Project (Team Assignment):
Students are expected to complete and submit their team project report (only 1 report per team).
Written reports must include at least the following format content:
PJ01
PJ02
PJ03
PJ04
PJ05

Nature and History of Company (products and services since inception until now)
Economic Environment (i.e. economic outlook)
Industry Outlook (e.g. porters 5 forces, technology, legal/regulatory environment, SWOT)
Financial Analysis Vertical and Horizontal (include industry comparison where possible)
Conclusion (supported by financial analysis and findings)

Nature and history of company should be less than 1 page. Economic environment and industry outlook
should be less than 2 pages. Financial analysis and conclusion should comprise the majority of your work
with a minimum of 5 or more pages. Except for the cover page, all pages must be numbered and titled.
Your work must flow logically and lead readily into your conclusion. Please make sure that the cover page
has a title (e.g. Financial Statement Analysis: XYZ Inc.), course number & course name, course quarter,
presented by, presented to, and dated.
Individual Report (Individual Assignment):
Students are expected to submit a written individual report based on the Bond Analysis and
Strategies material. Upon completion of this report students are required to participate in an open
forum Q & A discussion.
Written reports must include at least the following format content:
IR01 Briefly introduce and describe your individual report/paper
IR02 Body of Report should include key points, interesting analysis, etc.
IR03 Conclusion or closing remarks
Choose from any part of the Bond Analysis and Strategies material. The work should reflect your own
thoughts (i.e. please dont cut and paste). Your individual report should have a minimum of 5 pages + any
appendices, graphs, or illustrations, if applicable. Except for the cover page, all pages must be numbered
and titled. Please make sure that the cover page has a title (e.g. Financial Statement Analysis: XYZ Inc.),
course number & course name, course quarter, presented by, presented to, and dated.

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Two Required Course Packs:

XMANG 432.3 - Case Studies and Concepts
https://ucla.redshelf.com/book/8395

The Balance Sheet; Harvard Business School 9-101-108

The Income Statement; Harvard Business School 9-101-109
The Statement of Cash Flows; Harvard Business School 9-101-107
Financial Statement Analysis; Harvard Business School 9-195-177
Identify the Industries 1996; Harvard Business School 9-198-017
Merrimack Tractors & Mowers, Inc: LIFO or FIFO; Harvard Business School 3217
Depreciation at Delta Air Lines: The Fresh Start; Harvard Business School 4013
Bond Ratings; Harvard Business School 9-104-060
Assessing a Companys Future Financial Health; Harvard Business School 9-911-412
Quality of Earnings Analysis; Harvard Business School 9-194-050
Assessing Accounting Risk; Harvard Business School 9-105-054
Accounting Fraud at WorldCom; Harvard Business School 9-104-071
An overview of Financial Statement Analysis: The Mechanics; Darden Business Publishing UVA-C-2255
Sack It & Pack It, Inc.: 12 Combinations of GAAP & How They Differ; Darden Business Publishing UV1774
The Thoughtful Forecaster; Darden Business Publishing UVA-F-1490
Assessing Earnings Quality: Nuware, Inc.; Darden Business Publishing UV1757
Financial Statement Analysis Identify The Industry; Thunderbird School of Global Management TB0069
Enrons Demise Were There Warning Signs?; Thunderbird School of Global Management TB0135

XMANG 432.3 - Bond Analysis and Strategies

https://ucla.redshelf.com/book/60082/

Bonds
Mortgage type securities
Options
Portfolio management
Derivatives
Appendices
Monte Carlo Simulation
Excel Models

Additional Reading (Optional):

Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports
Howard M. Schilit and Jeremy Perler; McGraw Hill, Latest or any edition.

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Recommended Readings and Resources:

Wall Street Journal www.wsj.com, The Economist www.economist.com, Security Exchange
Commission www.sec.gov, Mission of Financial Accounting Standards Board www.fasb.org
National Bureau of Economic Research www.nber.org, Bureau of Economic Analysis www.bea.gov,
The Federal Reserve Bank www.federalreserve.gov, Interest rates historical quotes http://www.federalreserve.gov/releases/H15/data.htm, Financial Institutions Regulatory Authority www.finra.org, U.S. Bureau of Labor Statistics www.bls.org, Yahoo! Finance
www.finance.yahoo.com, Moodys Analytics - www.economy.com, Morningstar
www.morningstar.com, Valueline www.valueline.com, Ibbotson SBBI Yearbook http://corporate.morningstar.com/ib/asp/subject.aspx?xmlfile=1414.xml, Capital IQ www.capitaliq.com,
SNL www.snl.com

Grading:
Course grades will be based on participation and completion of assignments as follows:
%
3
17
25
25
10
10
10

Code Item
PJG1 Project: Select 2 public companies for team project (cannot be any of course pack firms).
PJG2 Project: Progress report to the class on PJ01, PJ02 & PJ03
PJG3 Project: Complete and submit final written team project report [PJ01, PJ02, PJ03, PJ04, PJ05]
PJG4 Project: Class presentation of final report by team members. Critique other teams reports.
IRGD Individual report: Complete and submit a written topic from Bond Analysis and Strategies.
OPGD Open Forum: Q & A
CPGD Class Participation

Students assignments are expected to be neat and completed in time, points will be deducted for
homework which is late, sloppy, minimally attempted, or clearly wrong.

(A) 90 100%, (B) 80 89%, (C) 70 79%, (D) 60 69%, (F) Below 60%
Please note that ALL COURSE GRADES ARE FINAL.
Incompletes: The interim grade Incomplete may be assigned when a student's work is of passing quality,
but a small portion of the course requirements is incomplete for good cause (e.g. illness or other serious
problem). It is the students responsibility to discuss with the instructor the possibility of receiving an I
grade as opposed to a non-passing grade. The student is entitled to replace this grade by a passing grade
and to receive unit credit provided they complete the remaining coursework satisfactorily, under the
supervision of and in a time frame determined by the instructor in charge, but in no case later than the end
of the next academic quarter. At that time, the Registrar will cause all remaining Incompletes to lapse to
the grade "F". Note: Receiving an I does not entitle a student to retake all or any part of the course at a
later date.

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Date/Topic
Assignments
Week 1
Introduction to Financial
(1/7/15)
Statement Analysis

COURSE OUTLINE
Readings
The Balance Sheet; HBS 9-101-108
The Income Statement; HBS 9-101-109
The Statement of Cash Flows; HBS 9-101107

Grades

CPGD 1%

Financial Statement Analysis

Team Project: Select final
public company

Financial Statement Analysis; HBS 9-195177

(1/21/15)

The Mechanics of Financial

Statement Analysis

An overview of Financial Statement Analysis:

The Mechanics; DBP UVA-C-2255

CPGD 1%

Week 4

Operating Activities

Identify the Industries 1996; HBS 9-198017

FSA Identify The Industry; TSGM TB0069

CPGD 1%

Week 2
(1/14/15)

Week 3

(1/28/15)

Week 5
(2/4/15)

Week 6
(2/11/15)

Credit Analysis & DCF

Team Project: Provide an
update or progress report
Bond Analysis and Strategies
(BAS)

Bond Ratings; HBS 9-104-060

BAS-Section 1 (1A, 1B, 1C)
BAS-Section 2 (2A, 2B, 2C)
BAS-Section 3 (3A, 3B)
BAS-Section 4 (4B, 4C)

CPGD 1%
PJG1 3%

CPGD 1%
PJG2 17%
CPGD 1%

(2/18/15)

Future Financial Health,

Forecasting & Valuation
Concepts

Assessing a companys FFH; HBS 9-911-412

The Thoughtful Forecaster; DBP UVA-F1490

CPGD 1%

Week 8

Quality of Earnings

Quality of Earnings Analysis; HBS 9-194-050

Assessing EQ: Nuware, Inc.; DBP UV1757

CPGD 1%

Week 7

(2/25/15)

Week 9
(3/4/15)

Week 10
(3/11/15)

Individual Paper:
Individual report due
Open Forum: Q & A

(Optional: Write a second individual paper of

same or better quality in lieu of Open Forum
attendance due by week 12)

CPGD 2%
(1% each week)

Week 11
(3/18/15)

Week 12
(3/25/15)

IRGD 10%
OPGD 10%

Team Project:

Final Report Due

Team Presentation

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PJG3 25%
PJG4 25%