Calicut University • B.Com • Semester 3
Financial Statement Analysis (COM3MN204) — Syllabus & Course Structure
Lecture Notes • Complete Study Material & Course Outline
Course Overview & Pre-requisites
Pre-requisites: Understanding fundamental accounting principles, including the accounting equation, double-entry bookkeeping, and the structure of corporate financial statements.
Course Summary: Financial Statement Analysis equips students with the analytical, diagnostic, and managerial tools required to interpret corporate financial statements, evaluate liquidity and solvency, compute advanced financial ratios, analyze fund flows, and estimate working capital requirements.
Course Outcomes (CO)
| CO | Course Outcome Statement | Cognitive Level | Knowledge Category | Evaluation Tools |
|---|---|---|---|---|
| CO1 | Understand fundamental basic tools and techniques of financial statement analysis. | Understand (U) | Conceptual (C) | Instructor-created exams, Quizzes, External Examinations |
| CO2 | Familiarize students with the basic structure of corporate financial reporting. | Analyse (An) | Procedural (P) | Seminars, Examinations |
| CO3 | Enable students to apply financial analysis and ratio evaluation tools in practice. | Apply (Ap) | Procedural (P) | Practical Assignments, Projects |
| CO4 | Develop critical thinking skills to assess financial information objectively and make informed decisions. | Analyse (An) | Procedural (P) | Comprehensive Projects |
* Cognitive Levels: Remember (R), Understand (U), Apply (Ap), Analyse (An), Evaluate (E), Create (C) | # Knowledge Categories: Factual (F), Conceptual (C), Procedural (P), Metacognitive (M)
Detailed Module Syllabus
| Module | Unit Title | Curriculum Content | Hours |
|---|---|---|---|
| Module I | Introduction to Financial Statement Analysis | 1. Financial Statements: Meaning, Nature, Utility, and Limitations (3 hrs). 2. Financial Statement Analysis: Meaning and Objectives (2 hrs). 3. Procedures & Inherent Limitations: Procedural steps and analytical constraints (2 hrs). 4. Types of Analysis: Horizontal Analysis, Vertical Analysis, Comparative and Common-Size Statements, Trend Analysis (3 hrs). | 10 |
| Module II | Ratio Analysis | 1. Ratio Analysis: Meaning, Objectives, Utility, and Limitations (3 hrs). 2. Classification of Ratios: Liquidity Ratios (Current, Quick/Acid-Test, Absolute Cash) and Profitability Ratios (Gross Margin, Operating Margin, Net Margin, ROI, ROE, ROCE) (3 hrs). 3. Turnover Ratios: Inventory Turnover, Debtors/Receivables Turnover, Working Capital Turnover and Operational Efficiency (3 hrs). 4. Leverage Ratios: Debt-to-Equity Ratio, Proprietary Ratio, Interest Coverage Ratio, and Financial Solvency Implications (3 hrs). | 12 |
| Module III | Fund Flow Analysis | 1. Fund Flow Statement: Concept of 'Fund' and 'Flow of Funds', Purpose, and Computation (2 hrs). 2. Schedule of Changes in Working Capital: Current assets and current liabilities classification (3 hrs). 3. Funds from Operations (FFO): Computation via statement format and Adjusted P&L Account (3 hrs). 4. Preparation of Fund Flow Statement: Multi-account adjustments including fixed assets, depreciation, investments, and tax provisions (5 hrs). | 13 |
| Module IV | Working Capital Management & Estimation | 1. Working Capital Concepts: Gross vs. Net, Permanent vs. Temporary, and Strategic Importance (2 hrs). 2. Determinants & Financing Principles: Factors influencing working capital, Hedging/Matching, Conservative, and Aggressive approaches (3 hrs). 3. Operating Cycle Method: Gross and Net Operating Cycle estimation techniques (3 hrs). 4. Projected Balance Sheet Approach: Forecasting working capital requirements (2 hrs). | 10 |
| Module V | Open Ended Module (Practical Exercises) | 1. Workshops: Hands-on financial modeling using spreadsheet software to calculate ratios and visualize data. 2. Case Studies: Real-world financial scenarios analyzing corporate annual reports. 3. Role Playing: Simulating financial analyst, auditor, and CFO decision-making roles. 4. Peer Review Sessions: Evaluative feedback and comparative presentations. | 30 |
Recommended Reference Books
- Dr. S.N. Maheswari: Management Accounting.
- Saxena: Management Accounting.
- Made Gowda: Management Accounting.
- Dr. S.N. Goyal and Manmohan: Management Accounting.
- B.S. Raman: Management Accounting.
- R.S.N. Pillai and Bagavathi: Management Accounting.
- Sharma and Gupta: Management Accounting.
COM3MN204Financial Statement Analysis
Download Official Syllabus Notes (PDF)
Calicut University • FYUGP 2024 Syllabus
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