This course examines the analysis of financial information presented in firms’ financial reports. The course comprises three related sections: fundamental analysis; valuation; and, the application of fundamental analysis and valuation techniques to a variety of specific decisions. Fundamental analysis involves answering questions such as: how is the firm performing? how might the firm perform in the future? what risks does the firm face? Valuation describes the methods by which our expectations of firms’ future performance may be converted to a present day value of the firm’s assets, and the various financial claims on those assets. The course also provides an introductory coverage to issues such as equity security analysis and credit analysis, with a strong emphasis on the use of financial statement data for these purposes.

Learning Outcomes

Upon successful completion, students will have the knowledge and skills to:

1. Describe and apply the basic techniques of financial statement analysis;
2. Explain the relationship between strategic business analysis, accounting analysis and financial analysis;
3. Identify and utilise value-relevant information contained within financial statements;
4. Recognise and explain the fundamental role of accounting numbers in the valuation of entities and the key financial claims on these entities' assets (equity and debt securities);
5. Understand the impact of financial reporting choices on the usefulness of reported earnings to predict future performance;
6. Prepare a written analysis of a listed company, which incorporates and synthesises techniques covered in the course;
7. Conduct applied business research (including locating, critically interpreting and evaluating firm-specific financial information);
8. Demonstrate their ability to work effectively in a team environment.

Research-Led Teaching

The overall syllabus and specific teaching materials draw directly on research in the areas of financial statement analysis and valuation.

Examination Material or equipment

Calculator (non-programmable)

Recommended Resources

Palepu, K. G., P. M. Healy, S. Wright, M. Bradbury, J. Coulton, Business Analysis and Valuation Using Financial Statements, Third Asia Pacific Edition, Cengage Learning, 2021.

Students are expected to have access to a copy of the prescribed book for the duration of the semester. The book can be purchased from the Cengage's website (e-book) (https://cengage.com.au/product/title/business-analysis-and-valuation-using-financi/isbn/9780170425186). A few copies of the text are available for 2-hour loan in the reserve loan section of the Chifley Library. An e-book version of the text is available from the ANU Library (https://anu.primo.exlibrisgroup.com/permalink/61ANU_INST/1alil8h/alma991020122689707631).

Additional materials, for example, analyst reports, book chapters and journal articles, will be made available via the course WATTLE website.

Details of prescribed workshop questions and cases and other required readings will be made available on the course website at least one week in advance of the workshop in which those materials will be considered. 

TECHNOLOGY, SOFTWARE, EQUIPMENT

You will be required to use MS-Word and MS-Excel in completing the requirements of this course. You will also need to use some of the ANU’s electronic library resources, including Morningstar DatAnalysis Premium, to obtain current and historical financial statement data. DatAnalysis Premium can be accessed from any computer within the ANU network or via GlobalProtect remote access (from outside ANU: https://services.anu.edu.au/information-technology/login-access/remote-access ) at:

http://datanalysis.morningstar.com.au/af/dathome?xtm-licensee=datpremium

(Please note: if you have problems using the above URL, you can find the current URL by browsing through the ANU Library's list of E-resources)

You are strongly advised to make yourself familiar with the DatAnalysis Premium website as early in the course as possible. The ANU Library also hosts a number of search engines with which you may identify literature relevant to your written assignments.

Staff Feedback

Students will be given feedback in the following forms in this course:

• written comments
• verbal comments
• feedback to whole class, groups and individuals.

Student Feedback

ANU is committed to the demonstration of educational excellence and regularly seeks feedback from students. Students are encouraged to offer feedback directly to their Course Convener or through their College and Course representatives (if applicable). Feedback can also be provided to Course Conveners and teachers via the Student Experience of Learning & Teaching (SELT) feedback program. SELT surveys are confidential and also provide the Colleges and ANU Executive with opportunities to recognise excellent teaching, and opportunities for improvement.

Other Information

COURSE DELIVERY

There will be one 2-hour lecture per week, and one 1-hour workshop per week. The lecture will typically include both a lecture component and time devoted to the discussion of a prescribed question (usually a core practical question). The 1-hour workshop will examine both theoretical and practical aspects of the syllabus. Questions for discussion in class will be available on the course website at least one week prior to the relevant class. Students are expected to have prepared a response to workshop questions in advance of class, and to actively participate in class discussions of the prescribed questions.

This course uses the ANU’s Wattle system for delivery of all on-line course materials. Students are expected to check the course Wattle site at least weekly. Copies of lecture slides will be made available on the course website, normally in advance of the lecture date. Guideline solutions for practical (i.e. quantitative) workshop solutions will be made available in the week following that in which the workshop was completed. ‘Solutions’ for theoretical / definitional workshop questions will not be provided. 

ASSESSMENT REQUIREMENTS

As a further academic integrity control, students may be selected for a 15 minute individual oral examination of their written assessment submissions.

Any student identified, either during the current semester or in retrospect, as having used ghost writing services will be investigated under the University’s Academic Integrity Rule.

COMMUNICATION

Email and Forums on the Wattle Course Website

Email and the Wattle course website are the preferred ways of communication. Student forums are set up on Wattle for each topic and can be viewed by all enrolled students and teaching staff. Students are encouraged to post any questions they have in the appropriate forum.

If necessary, the lecturer and tutors for this course will contact students on their official ANU student email address. Students should use this email address when contacting staff as spam filters used by ANU may not allow other email addresses to be received. 

Announcements

Students are expected to check the Wattle site for announcements about this course, e.g. changes to timetables or notifications of cancellations. Notifications of emergency cancellations of lectures or workshops will be posted on wattle or the door of the relevant room.

Class Schedule

Week/Session	Summary of Activities	Assessment
1	Framework for Analysis & Revision of Financial Reporting EssentialsValuation Theory and Concepts: Introduction to Discounted Cash Flow Approaches Text: Ch.1, Ch. 7
2	Strategy Analysis: How strong are the competitive forces affecting a firm’s future profit and position? Text: Ch. 2	Quiz 1 available on Wattle
3	Introduction to Accounting Analysis: Revision of Basics; Impact of Accounting Discretion on Reporting Quality Text: Ch. 3, Ch. 12
4	Implementing Accounting Analysis:Re-Casting Financial Statements (lecture slides provided, no ‘live’ lecture)Adjusting Financial Statements Text: Ch. 4, Ch. 5
5	Financial Analysis – IDe-composing ROE to better understand sources of profitability Text: Ch. 4, Ch. 5	Quizzes 2 & 3 available on Wattle
6	Financial Analysis – IIAnalysis of Asset Management and Leverage; Cash Flow Analysis Text: Ch. 5, Ch. 9	Written Assignment Due24 March (Monday) 5PM
7	Forecasting Future Performance and Position: Use what we have learned in the topics above to predict future sales, profits, assets, and financing requirements.  Text: Ch. 6
8	Valuation Implementation – Apply Forecasts from Topic 7 to value the firm using a) Discounted Free Cash Flows, b) Discounted Abnormal Earnings, c) Discounted Abnormal ROE.  Text: Ch. 8
9	Using Prices to Infer Market Expectations of Growth;Evaluating Mergers and Acquisitions and IPOs Text: Ch. 10, Ch. 11
10	Application of FSA to Equity Analysis; Accounting-related stock market ‘anomalies’   Text: Ch. 9
11	Using Financial Statement Data to Assess Creditworthiness Text: Ch. 10	Company Analysis Report Due16 May (Friday) 5PM
12	Valuation of "tech" firms when market sentiment is high: Does financial statement analysis still apply?

Tutorial Registration

Workshop enrolment is NOT required because there is only one workshop.

Assessment Summary

Assessment task	Value	Due Date	Return of assessment	Learning Outcomes
Written Assignment	10 %	24/03/2025	07/04/2025	2,3,4,5
Company Analysis Report	40 %	16/05/2025	28/05/2025	1,2,3,4,5,6,7,8
Final Examination	50 %	29/05/2025	26/06/2025	1,2,3,4,5,6,7
Non-Assessable Quizzes	0 %	07/03/2025	07/03/2025	1,3

* If the Due Date and Return of Assessment date are blank, see the Assessment Tab for specific Assessment Task details

Policies

ANU has educational policies, procedures and guidelines , which are designed to ensure that staff and students are aware of the University’s academic standards, and implement them. Students are expected to have read the Academic Integrity Rule before the commencement of their course. Other key policies and guidelines include:

• Academic Integrity Policy and Procedure
• Student Assessment (Coursework) Policy and Procedure
• Extenuating Circumstances Application
• Student Surveys and Evaluations
• Deferred Examinations
• Student Complaint Resolution Policy and Procedure
• Code of practice for teaching and learning

Assessment Requirements

The ANU is using Turnitin to enhance student citation and referencing techniques, and to assess assignment submissions as a component of the University's approach to managing Academic Integrity. For additional information regarding Turnitin please visit the Academic Skills website. In rare cases where online submission using Turnitin software is not technically possible; or where not using Turnitin software has been justified by the Course Convener and approved by the Associate Dean (Education) on the basis of the teaching model being employed; students shall submit assessment online via ‘Wattle’ outside of Turnitin, or failing that in hard copy, or through a combination of submission methods as approved by the Associate Dean (Education). The submission method is detailed below.

Moderation of Assessment

Marks that are allocated during Semester are to be considered provisional until formalised by the College examiners meeting at the end of each Semester. If appropriate, some moderation of marks might be applied prior to final results being released.

Participation

Course delivery: on-campus lecture (recording on Echo360) and weekly on-campus workshop.

Attendance at all classes, while not compulsory, is expected in line with “Code of Practice for Teaching and Learning”, clause 2 paragraph (b).

Examination(s)

Information regarding permitted examination materials for the course will be available on the examination timetable website when the examination timetable is released:  http://timetable.anu.edu.au/

Assessment Task 1

Written Assignment

Due Date: 5pm, 24 March 2025 (Monday), via Turnitin on Wattle - Late submission of this assessment task is not permitted.

Details: Your written assignment requires you to present time-series trends of a firm's financials and to write a 1000-word essay on a current accounting/finance topic relevant to this course’s objectives, and will require you to apply knowledge obtained from the first four topics of this course and from pre-requisite courses. This assignment is an individual assignment. Contents that exceed the 1000-word limit will not be assessed.

While you may use AI to assist the writing of the assignment, the vast majority of content should be your work. Given the potential lack of correctness and depth with the content that AI generates, you will be expected to check the accuracy and augment the content generated.

You must reference the use of all material and ideas that are not the candidate’s own (including the use of AI), using the Harvard (‘author date’ or ‘in text’) referencing system. The Harvard system, and referencing requirements more broadly, are described here (https://www.anu.edu.au/students/academic-skills/academic-integrity/referencing). If you are in any doubt regarding referencing requirements, please ask the convenor for help before submitting your assignment. Your online quizzes may include questions designed to test your understanding of referencing requirements.

Assessment Task 2

Company Analysis Report

Due Date: 5pm, 16 May 2025 (Friday), via Turnitin on Wattle - Late submission of this assessment task is not permitted.

Details: Details of the Company Analysis Report will be available on the course website before the end of Week 4. This comprehensive assignment will require you to analyse and evaluate the financial statements of, and other information pertaining to, a specific listed firm, and in doing so to demonstrate an understanding of topics key to this course, including: business strategy, accounting analysis, corporate governance, and the basics of equity valuation. 

This major assignment can be completed in groups of no more than three students or can be completed individually. Students who choose to work in groups will form their own groups. A discussion forum will be created on Wattle to assist with group formation. Students do not have to register the group members with the lecturer in advance. Students are expected to commence work on the Company Analysis Report prior to the mid-term break. So, it is important to have your group formed before the break. Students who do not form a group before the semester break will be assumed to do the assignment individually. This major assignment could take weeks to complete, so please plan ahead and start working on the assignment as soon as possible.

A signed Statement of Contribution by all group members will be required as part of the assignment submission. Guidance on how to work in a group can be found here: Group work | Australian National University Please closely follow the guidance. In a rare situation, a group member may fail to perform satisfactorily. Left unaddressed, the problem can lead to stress, animosity, and a sub-standard mark for all group members. If you encounter such a member, it is the group’s responsibility to deal with the issue. Often a simple verbal warning is all that is required early to ensure the deviant behaviour changes. If this fails, you should issue a written warning and in this warning, you should indicate that the member will be expelled from the group if such behaviour does not change within a set time period. If the written warning is unsuccessful, you should expel the member from the group and notify the course coordinator accordingly. Expelled members can still continue to complete the assignment but will be required to find a different listed firm (subject to the Course Coordinator’s approval) from their original firm.

Because this assignment can be done individually, failing to form a group of two or three members does not constitute grounds for any extension or special considerations.

 

There will be a 25-page limit for the report (details to be announced). Contents exceeding the page limit will not be assessed. The assignment will be returned with feedback by the end of week 12.

While you may use AI to assist the writing of the assignment, the vast majority of content should be your work. Given the potential lack of correctness and depth with the content that AI generates, you will be expected to check the accuracy and augment the content generated.

You must reference the use of all material and ideas that are not the candidate’s own (including the use of AI), using the Harvard (‘author date’ or ‘in text’) referencing system. The Harvard system, and referencing requirements more broadly, are described here (https://www.anu.edu.au/students/academic-skills/academic-integrity/referencing). If you are in any doubt regarding referencing requirements, please ask the convenor for help before submitting your assignment. Your online quizzes may include questions designed to test your understanding of referencing requirements.

Assessment Task 3

Final Examination

Details of Task:

Centrally administered examinations through Examinations, Graduations & Prizes will be timetabled prior to the examination period. The due date listed in the assessment summary is the earliest possible date. Please check ANU Timetabling for further information. Information regarding exam script viewing will be provided in due course.

The 2-hour, closed-book, final exam will be an on-campus invigilated exam that takes place during the examination period. All topics covered in classes are examinable. Workshop questions and lecture examples serve as a good gauge of the type of questions in the final exam. Details will be provided no later than Week 10.

Assessment Task 4

Non-Assessable Quizzes

Details of Task:

Three quizzes will be made available on Wattle during the first five weeks of semester (the Class Overview for details of availability of each quiz). These quizzes carry a 0% assessment weighting (i.e. they do not affect your final grade for the course), but represent an opportunity for you to obtain feedback regarding your understanding of key issues introduced in the early part of this course. You will receive feedback immediately upon completing each quiz, and may attempt each quiz as many times as you like throughout the semester.

Academic Integrity

Academic integrity is a core part of the ANU culture as a community of scholars. The University’s students are an integral part of that community. The academic integrity principle commits all students to engage in academic work in ways that are consistent with, and actively support, academic integrity, and to uphold this commitment by behaving honestly, responsibly and ethically, and with respect and fairness, in scholarly practice.

The University expects all staff and students to be familiar with the academic integrity principle, the Academic Integrity Rule 2021, the Policy: Student Academic Integrity and Procedure: Student Academic Integrity, and to uphold high standards of academic integrity to ensure the quality and value of our qualifications.

The Academic Integrity Rule 2021 is a legal document that the University uses to promote academic integrity, and manage breaches of the academic integrity principle. The Policy and Procedure support the Rule by outlining overarching principles, responsibilities and processes. The Academic Integrity Rule 2021 commences on 1 December 2021 and applies to courses commencing on or after that date, as well as to research conduct occurring on or after that date. Prior to this, the Academic Misconduct Rule 2015 applies.

 

The University commits to assisting all students to understand how to engage in academic work in ways that are consistent with, and actively support academic integrity. All coursework students must complete the online Academic Integrity Module (Epigeum), and Higher Degree Research (HDR) students are required to complete research integrity training. The Academic Integrity website provides information about services available to assist students with their assignments, examinations and other learning activities, as well as understanding and upholding academic integrity.

Online Submission

Assignments are submitted using Turnitin in the course Wattle site. You will be required to electronically sign a declaration as part of the submission of your assignment. Please keep a copy of the assignment for your records. You may be asked to provide an electronic copy of supporting spreadsheets if the staff marking your assignment deem this necessary.

For your Company Analysis Report, in addition to online submission, you are also required to attach a scanned copy of a cover sheet, signed by each member. Cover sheet is available here. Please keep a copy of tasks completed for your records.

Hardcopy Submission

This course does not require hardcopy submission of assessments.

Late Submission

Late submission not permitted. For any submission of assessment tasks without an approved extension after the due date, a mark of 0 will be awarded.

Referencing Requirements

The Academic Skills website has information to assist you with your writing and assessments. The website includes information about Academic Integrity including referencing requirements for different disciplines. There is also information on Plagiarism and different ways to use source material. Any use of artificial intelligence must be properly referenced. Failure to properly cite use of Generative AI will be considered a breach of academic integrity.

Returning Assignments

Assignments and feedback will be returned to students via email (to the student’s ANU account) or via the course Wattle site.  

Extensions and Penalties

Extensions and late submission of assessment pieces are covered by the Student Assessment (Coursework) Policy and Procedure. Extensions may be granted for assessment pieces that are not examinations or take-home examinations. If you need an extension, you must request an extension in writing on or before the due date. If you have documented and appropriate medical evidence that demonstrates you were not able to request an extension on or before the due date, you may be able to request it after the due date.

Resubmission of Assignments

There is no provision for the resubmission of assignments.

Privacy Notice

The ANU has made a number of third party, online, databases available for students to use. Use of each online database is conditional on student end users first agreeing to the database licensor’s terms of service and/or privacy policy. Students should read these carefully. In some cases student end users will be required to register an account with the database licensor and submit personal information, including their: first name; last name; ANU email address; and other information.
In cases where student end users are asked to submit ‘content’ to a database, such as an assignment or short answers, the database licensor may only use the student’s ‘content’ in accordance with the terms of service – including any (copyright) licence the student grants to the database licensor. Any personal information or content a student submits may be stored by the licensor, potentially offshore, and will be used to process the database service in accordance with the licensors terms of service and/or privacy policy.
If any student chooses not to agree to the database licensor’s terms of service or privacy policy, the student will not be able to access and use the database. In these circumstances students should contact their lecturer to enquire about alternative arrangements that are available.

Distribution of grades policy

Academic Quality Assurance Committee monitors the performance of students, including attrition, further study and employment rates and grade distribution, and College reports on quality assurance processes for assessment activities, including alignment with national and international disciplinary and interdisciplinary standards, as well as qualification type learning outcomes.

Since first semester 1994, ANU uses a grading scale for all courses. This grading scale is used by all academic areas of the University.

Support for students

The University offers students support through several different services. You may contact the services listed below directly or seek advice from your Course Convener, Student Administrators, or your College and Course representatives (if applicable).

• ANU Health, safety & wellbeing for medical services, counselling, mental health and spiritual support
• ANU Accessibility for students with a disability or ongoing or chronic illness
• ANU Dean of Students for confidential, impartial advice and help to resolve problems between students and the academic or administrative areas of the University
• ANU Academic Skills supports you make your own decisions about how you learn and manage your workload.
• ANU Counselling promotes, supports and enhances mental health and wellbeing within the University student community.
• ANUSA supports and represents all ANU students