Accounting and financial analysis

Objective

The objective of the course is to enable students to master the basic concepts of corporate accounting and financial decision-making within a company, through their most common applications. It will allow students to understand the design, content, and limitations of accounting documents and will introduce them to fundamental concepts in financial analysis, such as investment decision criteria, the different instruments used to finance investments, and methods of business valuation.

At the end of the course, students will be able to:

• Read a balance sheet, an income statement, and a cash flow statement, and understand the links between these different accounting documents.

• Use the main ratios and accounting concepts of financial analysis, in particular the functional presentation of company accounts, margin analysis, solvency analysis, and the concept of cash flows.

• Distinguish the main financial instruments—stocks, bonds, and bank credit—their financial and legal characteristics.

• Understand the basics of dynamic financial analysis, linking business valuation and corporate strategy.

Planning

The course will consist of two parts. First, the initial lectures and the first tutorial session will be devoted to corporate accounting. Then, these concepts will be directly used and applied in a section more specifically focused on financial analysis.

References

VERNIMMEN P., QUIRY P., LE FUR Y. et CEDAHA F. (2002) : Finance d’entreprise,  Dalloz.