UWA Handbook 2017

Unit details

ACCT3302 Financial Statement Analysis

Credit 6 points
  Offering
(see Timetable)
AvailabilityLocationMode
Semester 2UWA (Perth)Face to face
Details for undergraduate courses
  • Level 3 option in the Accounting major sequence
  • Category B broadening unit for Bachelor of Arts, Bachelor of Science and Bachelor of Design students
  • Level 3 elective
Content This unit focuses on five key components of effective financial statement analysis: (1) business strategy analysis is the starting point and provides the foundation for the subsequent analysis; (2) accounting analysis involves examining how accounting rules and conventions represent (or do not represent) the economic reality of a firm in its financial statements; (3) financial analysis primarily involves the use of ratios to analyse a firm's performance against appropriate benchmarks; (4) prospective analysis involves the development of forecast financial statement information which can then be used to estimate a firm's value; and (5) the application of the abovementioned techniques to perform equity security analysis, credit analysis and distress prediction, and an understanding of the important elements of merger and acquisition activities.
Outcomes Students are able to (1) evaluate the appropriateness of a firm's business strategy given the industry in which it operates and likely future developments for that industry; (2) evaluate the appropriateness of a firm's accounting policy choices and the likely impact of any inappropriate accounting policies on the firm's income statement and balance sheet; (3) forecast a firm's likely future performance (profitability), having regard to its business strategy, accounting policies and current performance; (4) value the firm based on the forecast of its likely future performance; (5) perform equity security analysis, credit analysis and distress prediction, and evaluate merger and acquisition activity; and (6) identify and use the appropriate elements of current corporate communication techniques to facilitate the business analysis and valuation process.
Assessment Typically this unit is assessed in the following ways: (1) in-class case studies; (2) individual research assignment; and (3) final examination. Further information is available in the unit outline.

Supplementary assessment is not available in this unit except in the case of a bachelor's pass degree student who has obtained a mark of 45 to 49 overall and is currently enrolled in this unit, and it is the only remaining unit that the student must pass in order to complete their course.
Unit rules
Prerequisites: ACCT2201 Corporate Accounting
Advisable prior study: FINA1221/FINA2221 Introduction to Finance
Incompatibility: FINA2207 Business Analysis and Valuation
Contact hours lectures/tutorials/seminars/workshops: up to 3 hours per week
Unit Outlinehttp://www.unitoutlines.biz.uwa.edu.au/Units/ACCT3302/SEM-2/2017

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