Course unit
Financial analysis
Last updated: 22/02/2024
Edit
Course Director(s):
PEILLON Sophie
General Description:
The unit is composed of two courses :
- Financial management
- Balance sheets, economic realities and cash flow statements
Key words:
Financial management
Balance sheets
Cash flow statement
Number of teaching hours
33
Fields of study
Economics, Management, Human and Social Sciences
Teaching language
French
Intended learning outcomes
| On completion of the unit, the student will be capable of: |
Classification level |
Priority |
| Undertaking a financial analysis |
3. Apply |
Essential |
| Mastering investment choice indicators |
3. Apply |
Essential |
| Presenting in a structured manner the strengths and weaknesses of an enterprise with the study of accounting and financial data |
4. Analyse |
Essential |
| Understanding and using cash flow statements |
2. Understand |
Essential |
Learning assessment methods
|
Percentage ratio of individual assessment
|
Percentage ratio of group assessment
|
|
Written exam:
|
67
|
%
|
Project submission:
|
0
|
%
|
|
Individual oral exam:
|
0
|
%
|
Group presentation:
|
0
|
%
|
|
Individual presentation:
|
0
|
%
|
Group practical exercise:
|
0
|
%
|
|
Individual practical exercise:
|
33
|
%
|
Group report:
|
0
|
%
|
|
Individual report:
|
0
|
%
|
|
|
|
|
Other(s): 0 %
|
Programme and content
| Type of teaching activity |
Content, sequencing and organisation |
| Course |
Financial management 1. Financial analysis (analysis of the principle management indicators) Analysis of financial structures and appreciation of global financial balances: capital structure, debt, liquidity and turnover ratios Assessment of activity and profit margins: interpretation of Intermediate Management Balances (IMB); performance ratios and break-even points Optimisation of applied means 2. Financing decisions (long and short term views) Analysis of financing structures: choices between equity and debt funding Notion of leverage effects Optimum growth rates 3. Investment decisions (long and short term views) Notion of capitalisation and discounted cash flow Choice of discounted cash flow rates Calculation of cost of capital Net Present Value (NPV) and other valuation methods (multiples, DFC,...) Internal rate of return (IRR) Payback period method Limits of indicators and models Teaching methods and means: Oral presentations; presentation supports for essential points; Application case studies to be solved during course sessions to apply the presented models and practice with financial analysis and decision support methods Assessment: case study application + MCQ (Final written exam) |
| Course |
Balance sheets, economic realities and cash flow statements Study of real cases with a reflection on the concepts of financial and strategic analysis used by banks in their financial and monitoring relations with companies, in their credit rating approach (Bâle 2) and their appreciation of default probabilities at 3 years. 1 – Creative accounting: Balance sheets and economic realities Critical analysis of accounts documents (adjustment of tax returns. Company case study) 2 - Application of score techniques to financial analysis (focus on financial credit rating methods used by credit institutions) Study of company balance sheets from different sectors of economic activity (Industry (case study of Pneumatique + Pneumatique 4), Transport (case study of DHL 3) Case study of an industrial company faced with the consequences of rising purchase supply rates in a context of increasing activity and heavy investment (case study Banette 1 and 4) The case of a company undergoing a growth crisis and the integration of liquidity and cash flow aspects in the default study (case study of Decor) Highlighting the principle causes of company default (Analysis of the liquidity of the “Toiture” case) Using the score function (economic and liquidity) to explain company default risks at very short terms and at 3 years. 3 – Banking techniques for in-depth financial analysis Key points of a financial study and seeking synergies between ratios Use of sectorial comparisons 4 - How to draft and present a financial analysis Company strengths and weaknesses, studies of operating means, activity, profitability, funding modes and financial structures Teaching methods and means: Supporting course documents and financial analysis case studies will be distributed beforehand for students to become familiar with the methods and techniques to be explained further during the course sessions. Marked copies will be handed back in most cases. Assessment : Company case studies carried out in groups + final individual exam |