Tuesday, May 01, 2007

Financial Analysis - Simon Business School - EWH

Financial Analysis

Highlighting one of today's fastest growing and most lucrative industries, the Financial Analysis Certificate explores the challenges and rewards of financial accounting and reporting, financial statement analysis and investment strategies. At the Simon School, which is highly renowned for its research and scholarship in the area of finance, we offer students state-of-the-art techniques for financial analysis and market research. Students learn to formulate and solve critical finance problems and obtain vital information from the many financial market databases.

Two foundational courses

  • ACC 401. Corporate Financial Accounting

    Corporate financial accounting is concerned with the form and content of the information firms disclose to external parties (e.g., shareholders). In the United States, financial reporting is based on generally accepted accounting principles (GAAP) set by the Financial Accounting Standards Board (FASB). GAAP define the accounting methods and disclosure practices that firms select from when providing financial statements to external parties. This course covers these principles and other important financial reporting practices. The primary focus of the course is developing the skills required to interpret and analyze financial information, rather than the skills required to prepare financial statements. Upon completion of the course, students will appreciate how financial accounting information is used in contracts between parties (e.g., lenders and the firm) and to evaluate a firm’s past performance and potential future performance.

  • FIN 402. Capital Budgeting and Corporate Objectives

    This course presents an analysis of the firm’s role in the market system and the nature of the firm’s objectives. Discussed are the implications of the firm’s goal for choice among alternative investment projects (the capital-budgeting problem); introduction to modern portfolio theory and market valuation of risky assets under uncertainty with implications for capital budgeting; analysis and illustration, with problems, of alternative investment criteria; the nature of interest-rate effects and the calculation of net cash flows; analysis of the effects of financial structure and dividend policy on the value of the firm; and the cost of capital.

Advanced courses (select three)

  • ACC 411. Financial Statement Analysis

    An objective of this course is to develop students’ ability to use financial statement information (broadly defined) in various decision-making settings. Various parties routinely use financial statement information to make a variety of economic decisions. Such users include corporate boards, individual and institutional equity investors, financial analysts, creditors, lenders and bond investors. The uses of financial statement information include: 1) evaluation of managerial performance; 2) analysts use financial statement information to perform prospective analysis, which serves as an input into the valuation of a firm’s equity. Analysts make buy, sell, and hold recommendations based on analysis of financial information; 3) creditors and lenders use financial statement information as input into lending decisions. Lenders use financial information to determine the type, amount and terms of a loan, and also the nature of any covenants, and 4) corporations and investment bankers use financial statements to value companies that might be takeover targets.

    This course is designed to provide the framework and tools necessary to conduct economic analysis in the above settings. The primary objective is to develop and sharpen students’ analytical ability to analyze financial statements and draw inferences about a firm’s performance and future prospects. Cases and analysis of actual reporting practices are used to achieve the course objectives.

  • FIN 411. Investments

    Investments includes discussion of the efficient-markets theory of the dynamic behavior of prices in speculative markets, along with empirical evidence for the validity of the theory; evaluation of the implications of the efficient-markets theory for the profitability of alternative investment strategies; exploration of the implications of portfolio theory for equilibrium asset prices and the measurement of risk; emphasis on the empirical evidence for various mean-variance and multifactor models of asset pricing and the use of these models for evaluating portfolio performance; and introduction to special topics in financial markets, such as arbitrage pricing theory, options and futures contracts.

  • FIN 434. Investment Management and Trading Strategies

    This course explores selected topics in the management of equity portfolios. Course content may vary from year to year. Topics include: active portfolio management with particular emphasis on risk analysis, multifactor risk/return models and performance evaluation and style analysis. The course also considers issues and evidence on different forms of market structure and trading systems, including the role of specialists/ dealers, optimal trading behavior for institutions, price impact of trades, and related information technology. Extensive use is made of investment software.


    FIN 448. Fixed-Income Securities

    The objective of this course is to undertake a rigorous study of fixed-income securities and markets. A variety of fixed-income securities will be discussed including coupon bonds, callable and putable bonds, sinking fund provisions, and floating rate notes. Interest rate derivatives such as forwards and futures on fixed-income securities, bond options, options on bond futures, caps, floors, and collars will also be discussed. In addition, we will study some tools that are useful in bond portfolio management including horizon analysis, duration, optimization techniques for constructing bond portfolios and modes for pricing fixed-income securities. While the perspective of this course is from the viewpoint of a bond investor, a person in corporate finance needs to understand similar material. Evaluating an investment in a fixed income security is the mirror image of the problem faced by a corporation in deciding whether or not to issue a bond.


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