Spring 2024 Accounting B8008 section 001

Earnings Quality & Fundamental

Earnings Quality & Fundam

Call Number 14631
Day & Time
Location
MW 10:50am-12:20pm
820 Kravis Hall
Points 3
Grading Mode Standard
Approvals Required None
Instructor Doron Nissim
Type LECTURE
Method of Instruction In-Person
Course Description

Financial reporting provides a window into the operational and financial workings of a company. However, translating this information into actionable insights is anything but straightforward. It requires an understanding of: Generally Accepted Accounting Principles (GAAP), the quality of financial information, and the adjustments and analyses used to assess profitability, risk, growth, and value.

The course starts with a short review of financial reporting and then focuses on various modules of fundamental analysis, including earnings quality analysis, performance evaluation, risk assessment, forecasting, and valuation. The remaining class meetings (approximately 14 out of 24) are devoted to a deeper dive into the reporting and analysis of key transactions (e.g., business combinations, leasing) and financial statement line items (e.g., revenue, income taxes).

To allow for dynamic progress, the class schedule is flexible:
Topic Approximate # of class meetings
1. Review of financial reporting 2
2. Financial statement analysis 4
3. Forecasting and valuation 4
4. Revenue and related items 2
5. Operating capacity 3
6. Estimated items 3.5
7. Financial instruments 2
8. Investments in businesses 2.5
9. Equity and related items 1
Total 24

While the course covers the theoretical underpinning of the various analyses, it focuses on implementation and practical uses. We will study many actual financial disclosures and cases of accounting abuses, and we will conduct fundamental-based valuation and other financial analyses, including using Excel tools that will be provided to the students. Studying financial disclosures will help you better understand the underlying assumptions and accounting choices the firm made in arriving at its accounting numbers. This information can be used to make earnings quality adjustments to the accounting numbers to make them more consistent across time or more comparable across companies. Studying cases of accounting abuses will help you improve your ability to “read between the lines” and develop a set of red flags to look for in analyzing financial statements. The class also incorporates insights from practitioner and academic research.

The primary objective of the course is to acquire a deep understanding of accounting information and how to intelligently use it in making investment, credit, and similar resource allocation decisions. Such knowledge is required of investors, consultants, analysts, banke

Web Site Vergil
Department Accounting (ACCT)
Enrollment 70 students (74 max) as of 12:09AM Tuesday, December 10, 2024
Subject Accounting
Number B8008
Section 001
Division School of Business
Open To Business, Engineering:Graduate, Journalism
Section key 20241ACCT8008B001