ACC 191 - Financial Analysis

Credits: 3
Lecture Hours: 3
Lab Hours: 0
Practicum Hours: 0
Work Experience: 0
Course Type: Voc/Tech

1. Identify the basic financial goals of a firm or business
   1. Discuss the forms of business organizations
   2. Discuss the purpose of financial analysis
   3. List factors that affect the value of a firm or business
2. Describe how the US Financial system works
   1. Define financial securities
   2. Explain the function of financial intermediaries
   3. Identify the different financial marketplaces
   4. Describe the securities traded in the money and capital markets
   5. Identify the determinants of the nominal interest rate
   6. Construct and analyze a yield curve
3. Explain the use of the four basic financial statements
   1. Discuss how depreciation affects cash flow
   2. Compute depreciation
   3. Explain how taxes affect a firm?s cash flow
   4. Calculate marginal and average tax rates
4. Explain how financial ratio and analysis is used to assess a business operation
   1. Compute profitability ratios
   2. Compute liquidity ratios
   3. Compute asset activity ratios
   4. Compute market value ratios
   5. Compare financial accounting information for business over time
   6. Compare financial accounting information between business enterprises
   7. Discuss the limitation of ratio analysis
   8. Perform comparative analysis of financial statements
5. Explain why financial forecasting is vital to business success
   1. Describe the financial statement forecasting process
   2. Prepare to pro forma (projected) financial statements
   3. Explain the importance of analyzing forecasts
6. Define risk, risk aversion, and risk/return relationship
   1. Measure risk
   2. Identify the types of risk that business firms encounter
   3. Explain methods of risk reduction
   4. Describe how business firms compensate for assuming risk
7. Explain the time value of money
   1. Identify future value and present value of a single sum
   2. Explain future and present values of an annuity
   3. Discuss present and future value of money problems
8. Explain the importance of bond and stock valuation
   1. Discuss the valuation of securities
   2. Explain components of market value and the yield to maturity of a bond
   3. Discuss the market value and expected yield of preferred stock
   4. Explain the market value and expected yield of common stock
9. Explain the capital budgeting process
   1. Calculate the payback period for a proposed capital project
   2. Calculate the net present value for proposed capital project
   3. Calculate internal rate of return for a proposed capital project
   4. Describe capital rationing
   5. Describe methods for selecting a project
   6. Measure the risk of a capital budgeting project
   7. Explain risk-adjusted discount rates
10. Describe the sources of capital
    1. Estimate the cost of capital for each financing source
    2. Estimate the average cost of capital
    3. Explain how changes in capital structure affect a firm?s value
    4. Discuss sources of long-term financing
    5. Discuss sources of short-term financing
11. Identify facts that influence dividend decisions
    1. Compare the major dividend theories
    2. Describe how a firm pays dividends
    3. Identify alternative to paying cash dividends
12. Explain the importance of managing working capital
    1. Discuss the trade-off between liquidity and profitability and the affects on current assets management policy
    2. Describe how a business firm reaches an optimal level of current assets
    3. Discuss the three approaches to working capital financing policy
13. Describe how a business firm manages accounts receivable and inventory as investments
    1. Describe alternative inventory management approaches
    2. Explain how business firms make credit decisions
    3. Explain how business firms create credit policies
    4. Explain the need for short-term financing
    5. List the advantages and disadvantages of short-term financing
    6. Describe the three types of short-term financing
14. Prepare an in-depth analysis of a publicly-held corporation utilizing accepted financial tools
    1. Prepare accepted ration analysis and trend analysis
    2. Analyze data
    3. Interpret data
    4. Summarize data
    5. Project earnings capability
    6. Communicate findings in a formal presentation