Fundamental analysis as an investment tool 2400-ZEWW892-OG

Class 1: Discussion of the organization of the class. Familiarising students with the class rules and the requirements for passing. Discussion of general principles of financial reporting (according to the Polish Accounting Act and International Accounting Standards).
Class 2 / 3: Financial statements: Balance sheet - the function of the statement and its structure according to Polish and international reporting, discussion of the main balance sheet categories and their valuation.
Class 4 / 5: Financial statements: Income statement - function of the statement, its structure according to Polish and international reporting, discussion of the differences between the comparative and the calculative formats of the income statement and the importance of the so-called cost circle.
Class 6: Financial statements: Cash flow statement - function of the statement, its structure according to Polish and international reporting, discussion of the differences between indirect and direct formats of the report, principles of preparing the cash flow statement using the indirect method.
Class 7: Qualitative analysis. Principles of conducting macro- and micro-economic analysis of enterprises. Analysis of the enterprise - measurable and non-measurable factors. Presentation of Porter's 5 forces model, PESTEL and SWOT as tools for enterprise analysis.
Class 8: Group work. Conducting a qualitative analysis of the chosen company.
Class 9: Preliminary analysis of financial statements. Discussion of vertical and horizontal analysis of Balance Sheet and Income Statement and sign analysis of Cash Flow Statement.
Class 10: Preliminary analysis of sample financial statements of a Polish company. Discussion of the stages of analysis and main conclusions.
Class 11: Ratio analysis. Presentation of ratio analysis in the areas of liquidity, debt, efficiency and profitability. Familiarising students with the Du Pont analysis.
Class 12: Ratio analysis of sample financial statements of a Polish company. Discussion of the stages of analysis and main conclusions.
Class 13 / 14: Student presentations.
Class 15: Summary of class. Feedback to the presentations.

Type of course

general courses

Course coordinators

Agata Kocia

Learning outcomes

After completing the course, the student will be able to assess the financial position of the company based on publicly available information and financial statements. In addition, the student will be able to assess what information is relevant to the analysis of the company taking into account its market environment (e.g. sector, type of market, type of product).

The student has knowledge of financial reporting taking into account the differences between Polish and international financial reporting standards. The student has knowledge of the essential categories of reports that can have a significant impact on the decisions made by stakeholders. The student has knowledge of how to evaluate the financial stataments using profitability, efficiency, debt and liquidity ratios.

1 The student knows and understands the methods of preparing financial statements (balance sheet, income statement, cash flow statement). (S1A_W07)
2. The student has knowledge of conducting financial statements analysis using the ratio method. The student knows the four groups of ratios of profitability, efficiency, debt and liquidity. (S1A_W06)

The student has the ability to conduct an independent analysis of financial statements and evaluate the performance of the company in terms of profitability, efficiency, debt and liquidity.

1. The student is able to carry out the analysis of financial statements using the ratio method. (S1A_U01), (S1A_U02), (S1A_U03), (S1A_U04)
2. The student can interpret the quantitative results of preliminary analysis (vertical and horizontal) and ratio analysis. (S1A_U01), (S1A_U02), (S1A_U03), (S1A_U04)
3. Student is able to present the basic recommendations for improving the results of financial ratios. (S1A_U01), (S1A_U02), (S1A_U03), (S1A_U04)

The student is aware of the impact of accounting policies and principles on the information presented in the financial statements of companies. The student knows how to make decisions regarding the investment of funds in the analyzed companies.

1 The student is aware of how the choice of accounting policies and principles affects the information presented in the financial statements of companies, and understands how companies can affect their evaluation. (S2A_K04), (S2A_K05), (S2A_K07)

Assessment criteria

Mandatory attendance in class with one unexcused absence allowed.
Prepare in a group of 2-4 people and then present a presentation on a chosen analysis of chosen financial statements.
The presentation should contain about 30-40 slides, and the speech should last from 25 to a maximum 35 minutes.

Bibliography

Required reading:
- Wędzki D., „Analiza wskaźnikowa sprawozdania finansowego”, Oficyna Ekonomiczna Wolters Kluwer, Krakόw, 2006.

Additional reading:
- Jajuga K. i Jajuga T., „Inwestycje”, Wydawnictwo Naukowe PWN, Warszawa, 2008.
- White G. I., Sondhi A. C. i Fried D., „The analysis and use of financial statements”, John Wiley & Sons, Inc., 2002.
- Fridson M. i Alvarez F., „Financial statement analysis: A practitioner’s guide”, John Wiley & Sons, Inc., 2003.

Additional information

Information on level of this course, year of study and semester when the course unit is delivered, types and amount of class hours - can be found in course structure diagrams of apropriate study programmes. This course is related to the following study programmes:

Additional information (registration calendar, class conductors, localization and schedules of classes), might be available in the USOSweb system:

Description of 2400-ZEWW892-OG in USOSweb