0708 S3INTA1 Financial Statement Analysis
Univ.Prof. Dr. Katrin Hummel
Contact details
Weekly hours
Language of instruction
09/02/22 to 09/25/22
Registration via LPIS
Notes to the course
Subject(s) Master Programs
Day Date Time Room
Tuesday 10/11/22 02:00 PM - 05:00 PM TC.3.10
Wednesday 10/12/22 10:00 AM - 01:00 PM D4.0.019
Thursday 10/27/22 02:30 PM - 06:00 PM Online-Einheit
Friday 10/28/22 10:00 AM - 01:00 PM Online-Einheit
Tuesday 11/08/22 02:00 PM - 05:00 PM TC.5.12
Wednesday 11/09/22 10:00 AM - 01:00 PM D4.0.019
Thursday 12/01/22 12:30 PM - 04:30 PM D3.0.233

This course will be held in English


The goal of the course is to teach students how to perform financial statement analysis and business valuation. It introduces corporate reporting as one of the main information sources for business decision makers and provides insights into the usefulness and limitations of financial statement analysis in different decision contexts (e.g., investment decisions).

Students learn the financial statement analysis tools that enable them to practically conduct business valuation, including industry and corporate strategy analysis, accounting analysis, financial analysis, forecasting methods and valuation models.

Learning outcomes

After completing this course the students will have the ability to:

  • Use IFRS-based financial statements as one of the main sources of information for conducting a wide range of business analyses, such as
    • Link a firm’s accounting information with its strategy;
    • Identify red flags of potential misrepresentation in financial statements;
    • Reformulate financial statements (i.e., balance sheet, income statement and cash flow statement);
    • Make accounting adjustments to “undo” accounting distortions and to properly capture a firm’s economics;
    • Compute a firm’s financial ratios and interpret ratios from an analyst’s perspective;
    • Use financial ratio analysis to evaluate a firm’s operating, investment and financing efficiency;
    • Forecast financial statements;
    • Value a firm using various valuation techniques such as valuation multiples, dividend discount model, discounted cash flow model and discounted abnormal earnings model.
  • Apply common tools of financial statement analysis to conduct a comprehensive analysis
  • Prepare forecasted financial statements as the basis for valuation 
  • Apply accounting-based valuation models

After completing this course the students will also have the ability to: 

  • Confidently conduct financial statement analysis in various decision contexts (like from the perspective of managers, security analysts etc.)
  • Recognize the most important aspects of the analysis depending on the decision context
  • Acknowledge the need for and potential sources of additional information required for conducting a comprehensive analysis

Formulate a final valuation decision resulting from the comprehensive analysis

Attendance requirements

Prüfungsimmanente Lehrveranstaltung: 80% minimum. 

Teaching/learning method(s)

The teaching material is based on an international text book. Part of the material is presented during lectures and part of it is intended for self-study. Numerous examples and cases of European firms are used to support the discussion of business analysis and valuation throughout the course. Working through problems and exercises, at the lectures and individually, further reinforces the material covered and encourages analytical thinking.


The course evaluation is based on (1) a term project (30%), (2) a presentation of the term project (30%), (3) two clicker exams (each 15%) and (4) in-class participation (10%). 

(1) Term project (30%)

Groups of students have to prepare a research report that covers a specific company. The report includes a business analysis, financial analysis, financial forecasting and equity valuation.The project constitutes 40% of the course grading.

(2) Presentation of the term project (30%)

Students have to present in class how they conducted the term project and what results they derived. Students have to elaborate on each of the term project's parts (i.e. business analysis, financial analysis, financial forecasting and equity valuation).

(3) Clicker exams (two clickers, each accounting for 15%):

Two clicker exams cover the contents of the course.

(4) In-class participation (10%):

Students must read and prepare cases that are discussed in class.

1 Author: Palepu, Krishna G., Paul M. Healy, and Eric Peek

Business Analysis and Valuation: IFRS Edition

Publisher: Cengage Learning
Edition: 3
Remarks: Main Reading (This semester's lecture is based on edition 3 of the book!)
Year: 2013
Content relevant for class examination: Yes
Content relevant for diploma examination: No
Recommendation: Essential reading for all students
Type: Book
2 Author: Penman, Stephen H.

Financial Statement Analysis and Security Valuation

Publisher: Mcgraw-Hill
Year: 2012
Content relevant for class examination: Yes
Content relevant for diploma examination: No
Recommendation: Reference literature
Type: Book
3 Author: Alexander, David and Christopher Nobes

Financial Accounting – An International Introduction

Publisher: Prentice Hall
Year: 2010
Content relevant for class examination: No
Content relevant for diploma examination: No
Recommendation: Reference literature
Type: Book
Last edited: 2022-04-27