To provide theoretical concepts and practical tools for the analysis and evaluation of financial performance and risk of non-financial companies, industries and portfolios. In details, the course aims at developing competences and skills in critical analysis, interpretation and valuation-judgement in the following fields:
economic and financial performance of firms/industries in manufacturing and tertiary sector
financial dynamics and financial needs of non-financial firms
financial solvency, credit risk and cost of debt
risk and return of equity portfolios and mutual funds.
The course contents are applicable in two main areas:
decision making for resources allocation by managers, public decision-makers and financial analysts
fundamental analysis of shares/portfolios for asset management/financial investments.
economic and financial performance of firms/industries in manufacturing and tertiary sector
financial dynamics and financial needs of non-financial firms
financial solvency, credit risk and cost of debt
risk and return of equity portfolios and mutual funds.
The course contents are applicable in two main areas:
decision making for resources allocation by managers, public decision-makers and financial analysts
fundamental analysis of shares/portfolios for asset management/financial investments.
teacher profile teaching materials
1. Objectives, content, applications, and users of financial statement analysis
2. Elements of strategic analysis: competitive forces analysis as the foundation of financial statement analysis
3. Standardization, reclassification, and adjustments of financial statements and accounting data
4. Performance analysis of industrial, commercial, and service firms:
a. Financial ratios:
i. categories and measurement criteria
ii. informational and diagnostic content
iii. logical/analytical models for decomposition and linkage
iv. benchmarks for cross-sectional analysis
v. practical implementation issues
vi. sector/firm analysis and comparison using real-world data
b. Cash flow analysis and preparation of the cash flow statement
5. Forecasting: structure, logic, and stages of financial forecasting analysis. Preparation of pro forma financial statements
6. Financial statement analysis for business valuation: DCF, DDM, abnormal profit, abnormal profit growth, and multiples. Differences between asset-side and equity-side approaches
7. Working capital management: (a) trade receivables/payables management; (b) inventory management models; (c) cash management models
8. Financial solvency and cost of debt:
a. fixed-income securities: fundamentals, pricing, and duration
b. measures and concepts of financial solvency
c. corporate bond ratings: key determinants
d. bankruptcy prediction and corporate fundamentals
9. Financial analysis in the asset management industry
10. Return and risk of equity portfolios/mutual funds:
a. portfolio return (TWR and MWR) and risk measures
b. risk-adjusted performance measures
c. style analysis and performance attribution
2) Benninga, S., Mofkadi, T., 2021 (5° edizione), Financial modeling (uses Excel and R), MIT Press, exercises and spreadsheets delivered in class
3) Basile, I., Ferrari, P., Braga, M.D., 2024 (3° edizione). Asset management e investitori istituzionali. Chapters 8-9-10.
Mutuazione: 21201513 ANALISI FINANZIARIA in Economia L-33 R MORRESI OTTORINO
Programme
The main topics covered in the course are:1. Objectives, content, applications, and users of financial statement analysis
2. Elements of strategic analysis: competitive forces analysis as the foundation of financial statement analysis
3. Standardization, reclassification, and adjustments of financial statements and accounting data
4. Performance analysis of industrial, commercial, and service firms:
a. Financial ratios:
i. categories and measurement criteria
ii. informational and diagnostic content
iii. logical/analytical models for decomposition and linkage
iv. benchmarks for cross-sectional analysis
v. practical implementation issues
vi. sector/firm analysis and comparison using real-world data
b. Cash flow analysis and preparation of the cash flow statement
5. Forecasting: structure, logic, and stages of financial forecasting analysis. Preparation of pro forma financial statements
6. Financial statement analysis for business valuation: DCF, DDM, abnormal profit, abnormal profit growth, and multiples. Differences between asset-side and equity-side approaches
7. Working capital management: (a) trade receivables/payables management; (b) inventory management models; (c) cash management models
8. Financial solvency and cost of debt:
a. fixed-income securities: fundamentals, pricing, and duration
b. measures and concepts of financial solvency
c. corporate bond ratings: key determinants
d. bankruptcy prediction and corporate fundamentals
9. Financial analysis in the asset management industry
10. Return and risk of equity portfolios/mutual funds:
a. portfolio return (TWR and MWR) and risk measures
b. risk-adjusted performance measures
c. style analysis and performance attribution
Prerequisiti
Basic knowledge of accounting principles, annual report, corporate management and strategy, corporate financeCore Documentation
1) Palepu, K.G., Healy, P.M., Peek, E., 2025 (7° edizione). Business analysis and valuation: An international perspective, Cengage. Chapters 1-8; section 9.5; chapter 102) Benninga, S., Mofkadi, T., 2021 (5° edizione), Financial modeling (uses Excel and R), MIT Press, exercises and spreadsheets delivered in class
3) Basile, I., Ferrari, P., Braga, M.D., 2024 (3° edizione). Asset management e investitori istituzionali. Chapters 8-9-10.
Attendance
Attendace is strongly recommended because of the use of Excel and practical exercisesType of evaluation
Knowledge is assessed through written exam composed of open-ended questions, true/false, exercises.