This course teaches you how to analyze financial statements in order to develop financial statement models, assess credit risk, and, ultimately, value a company. The course provides both a framework and the tools necessary to analyze financial statements. Its primary objective is to advance your understanding of how financial reporting can be used in a variety of decisions (e.g., lending and investment decisions) and analyses (e.g., financial distress and bankruptcy prediction). It is applied in nature and stresses the use of actual financial statements. Throughout the course, I draw heavily on real business examples and use cases to illustrate the application of the techniques and tools. Topics include traditional ratio analysis techniques, accounting analysis (i.e., identifying earnings management and accounting quality issues), and financial risk assessment. The second part of the course focuses on equity valuation, e.g., the preparation of pro forma financial statements, and the use of various valuation models. While students with a multitude of interests will benefit from this course, students with an interest in investment banking, equity or credit analysis, consulting, strategy, corporate finance, or management will find this course particularly relevant.

Business 30000 (or 30116) and Business 35000 (or 35001) are strongly recommended and ideally should be taken prior to taking my class. In essence, I expect students to have a solid foundation in financial accounting and an understanding of investments (including the CAPM) as provided by Business 30000 and 35000, respectively. Business 35200 is also strongly recommended but can be taken concurrently. If you decide to take this class without these prerequisites, you will have to work much harder and may be at a disadvantage. Preqs are recommended, and students can bid without securing a waiver. Cannot enroll in BUSN 30130 if BUSN 20150 taken previously.

The textbook should be purchased prior to the first week of class. All other materials (including reading assignments for the first class) will be posted to Canvas.

Based on individual and group assignments, class participation, a group valuation project, a quiz, and a final exam. Cannot be taken pass/fail. No registered auditors.