Course Outline: Financial Reporting & Analysis (FIN1105)

Area: Finance | Credit: 3

Programme: PGDM | Duration: August-November, 2022| Term: I
_______________________________________________________________________
Instructor(s) Name : Dr. Rajashri Chatterjee
Email : ra.chatterjee@imi-k.edu.in
Phone (Extn no.) : 033-6652-9636
Meeting Hours : With prior appointment
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PART 1
INTRODUCTION
Financial statements of a firm are positioned to serve the needs of the financial markets, input
markets, product markets and regulators. The financial statements are the product of the
interplay of the forces that drive businesses. The course Financial Reporting and Analysis will
discuss the basic accounting model of analyzing and processing transactions and presenting
the information in the form of financial statements. In this endeavour it will introduce the
principles and standards that underlie a firms’ accounting policies and managerial implications
for the same. The course subsequently will focus on interpretation of numbers in the financial
statements. It covers the tools and techniques that are useful in analyzing financial statements
to understand business beyond numbers. To summarize, this course aims to provide a
comprehensive idea about various key aspects of financial reporting and analysis.

COURSE OBJECTIVES (CO)

• To understand the concept, importance, scope, principles of accounting

• To understand the process of measuring and reporting income, assets, liabilities and
equity
• To comprehend various aspects of financial reporting practices in India
• To evaluate and use accounting data for business
• To analyze and interpret financial statements of companies with a special focus on
listed Indian companies

COURSE LEARNING OUTCOMES (CLO)

At the end of this course, students would be able to:

1
CLO1 - (Map with PLO1) Acquire comprehensive understanding and knowledge of the
fundamentals of financial reporting principles, processes and practices.

CLO2 - (Mapped with PLO2) Summarize, measure, report and assess accounting data or
financial information presented in the financial statements.

CLO3 - (Mapped with PLO2, PLO3) Critically evaluate and interpret financial statements
for the usage and benefit of any business organization; acquire decision making skills in the
context of financial reporting, analysis and interpretation to suggest solutions for intricate
managerial problems

CLO4 – (Mapped with PLO4, PLO5) Understanding the significance of Ethical Issues in
Financial Accounting & Reporting

COURSE CONTENT
1. Introduction to Accounting, Accounting fundamentals and process leading to
preparation of financial statements
2. Exposure to various aspects and components of income, expenses, assets, liabilities and
equity along with their measurement/valuation and impact in the context of financial
reporting and decision making
3. Various tools and techniques of financial statement analysis
4. Exposure to reporting practices and format of Indian firms
5. Understanding the significance of Ethics in Financial Accounting & Reporting

PRESCRIBED TEXT BOOK

Financial Accounting: A Managerial Perspective, R. Narayanaswamy, Edition 7th, Prentice

Hall India

OTHER READINGS AND REFERENCES

Introduction to Financial Accounting by Horngren, Sundem, Elliot and Philbrick, Latest

Edition, Pearson Publication

Financial Accounting: Information for Decisions by John J Wild and Prakash Singh, Special
Indian Edition, 10th edition

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Financial Accounting for Managers by Sanjay Dhamija, Latest Edition, Pearson

Financial Accounting for Management by N. Ramachandran and Ram K. Kakani, Latest

edition., McGraw Hill

POLICY ON PLAGIARISM:
Plagiarism of any kind and to any extent would attract penalties. The assessment would be
‘zero’ for that particular component, with no further opportunity to improve. Repetition of the
offence would result in failure in the subject.

ASSESSMENT SCHEME AND WEIGHTAGE:

{a} END-TERM

Weightage Duration (in Open/Close

Evaluation CLO Tested
(%) minutes) Book

End-Term 35 120 Close CLO 2, CLO 3

{b} OTHER ASSESSMENTS

Sl. Unit of Weight

Evaluation Item Time CLO
No. Evaluation (%)

1 Assignment Individual 25 Post 10th session CLO 2

2 Quiz 1 Individual 10 Post 7th session CLO 1

3 Quiz 2 Individual 10 Post 15th session CLO 1

Project Work & CLO 1

4 Presentation Group 20 20th session

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 PART 2: SESSION PLAN

Session. Topics Pedagogy Reading

Introduction to Accounting & Accounting Lecture Text: Narayanaswamy
Basics: Accounting overview, Importance of Chapter 1, Chapter 4
1
Accounting, Accounting concepts,
conventions & principles
Accounting process leading to preparation of
financial statements for reporting financial
information: Fundamental Accounting Text: Narayanaswamy
Equation, Analyzing transactions, Recording Chapters 2, 3, 4
Lecture,
2,3,4 transactions, Posting to ledger, Preparing Trial
exercises
Balance, Preparing Adjusted Trial Balance,
Preparing financial statements viz. Income
Statement, Balance Sheet & Cash Flow
Statement
Inventory valuation and its impact on profits:
Concept, Effect of inventory error, Comparing Text: Narayanaswamy
Lecture,
5-6 alternative costing methods, Lower-of-cost-or- Chapter 5
exercises
market (LCM) principle, Periodic & Perpetual
Inventory Systems
Valuation of long-lived assets and accounting Text: Narayanaswamy
for depreciation/amortization: Concept of Chapter 6
long-lived assets, Depreciation methods,
Lecture,
7-8 Crucial issues in depreciation accounting, Conceptual reading:
exercises
Derecognition of PPE, Concepts of Annual Report: Any
Revaluation and Impairment, Intangible Select Indian Company
Assets & Amortization

Quiz 1 (10%)

Text: Narayanaswamy
Chapter: 11
Understanding Equity: Equity Share Capital,
Lecture,
9 Preference Shares, Bonus Shares, Stock Split, Conceptual reading:
exercise
Right Issue, Reserves & Surplus Annual Reports of Indian
companies

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 Text: Narayanaswamy
Chapter: 9, 10: relevant
sections
Understanding Liabilities: concepts of various Lecture,
10
forms of liabilities exercise
Conceptual readings:
Annual Reports of Indian
companies

Assignment (25%)

Select Financial Instruments; Lease Text: Narayanaswamy

11-12 Lecture
receivables Chapter 7

Lecture, Text: Narayanaswamy

13 Cash Flow Statement: An Overview
exercise Chapter 13
Text: Dhamija, Chapters:
5&6
Understanding format and items of Balance Lecture,
14-15
Sheet and Profit & Loss Statement discourse Conceptual reading:
Financial Statements of
Indian Companies

Quiz 2 (10%)

Lectures, Text: Narayanaswamy

Analysis of Financial Statements: Profitability,
exercises Chapter 12
Liquidity & Solvency Analysis; Capital
16,17,18 Market Standing Analysis; Common size
Conceptual readings:
statements; Analysis; Horizontal analysis
Annual Reports of Indian
companies.
Guest
19 Business Combinations: Overview Lecture: TBD NA
Project presentation (20% weightage)
20

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 PART 3: SUPPLEMENTARY INFORMATION

* Project Details – This will be a group assignment. Each group will be allocated a topic
pertaining to financial reporting/financial analysis in the contemporary world. Every team will
be asked to prepare a comprehensive yet crisp report on the same. Each team needs to submit
the report (word document) prior to the 20th session. The report will be judged based on a viva
as well. Report should not exceed 8 pages (with 12 font size & 1.5 spacing).

PLO MAPPING FOR THE COURSE

Addressed CLO
by No.
PLO# Program Learning Outcome
Course?
(Yes / No)
Application of Fundamentals
PLO1 Traits: Demonstrate application of functional / conceptual knowledge Yes CLO 1
to business situations
Problem Identification and Solution CLO 2,
PLO2 Traits: Demonstrate ability to identify a problem, critically assess Yes CLO3
various alternatives and suggest appropriate solution

Integrative Thinking
Traits: Demonstrate ability to identify inter-linkages among functional CLO 3
PLO3 Yes
areas within an enterprise and assess the impact of external
environment on its performance

Effective Communication CLO 4

PLO4 Traits: Demonstrate proficiency in Oral and Written Communication Yes

Ethical Responsibility
PLO5 Traits: Demonstrate awareness and assess impact of ethical behavior Yes CLO 4
on business
Leadership NA
PLO6 Traits: Demonstrate capability to take leadership role in a business No
situation