Scoring Model 1_International Graduate School of Accounting Policy (IGSAP) 2015 FALL Semester

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1 Scoring Model 1_International Graduate School of Accounting Policy (IGSAP) 2015 FALL Semester Class Time: October 3, 2015-January 23, 2016, 10:30-12:00, Saturdays Classroom: Kasumigaseki Building 33F Kasumigaseki, Chiyoda-ku, Tokyo-to, Japan Instructor: Masumi Nakashima, M.B.A., Ph.D. Adjunct Instructor at Tohoku University IGSAP Chair and Professor of Accountancy at Chiba University of Commerce Office hours: By appointment 1. Course Objectives This course provides a comprehensive framework for business analysis and valuation by using financial statement information. Students can learn not only the concepts and principles for evaluating a firm s financial performance and predicting its future economic condition but also tools for the financial statements analysis. Topics are covered: Strategy Analysis, Accounting Analysis, Financial Analysis, and Prospective Analysis. The goal is to understand the basic principles of fundamental analysis and to obtain skills and techniques to analyze the financial statements and determine the fundamental value. 2. Course materials #1 Business Analysis Valuation: Using Financial Statements, Krishna G. Palepu and Paul M. 5th edition, South-Western College Publishing (ISBN-10: ISBN-13: ). #2 Earnings Management and Earnings Quality: Evidence from Japan, Masumi Nakashima, 2015, Hakuto Shobo Publishing (ISBN: ) The above textbooks are to be stored at the classroom at Hirai. Supplemental materials #3 Jones, J Earnings management during import relief investigations, Journal of Accounting Research, (Autumn) #4 Roychowdhury, S Earnings management through real activities manipulation. Journal of Accounting and Economics, 42:

2 3. Grading (1) Contribution to class 25%, (2) Analysis Paper 50%, and (3) Presentation 25%. 4. Schedule Class is to be held on Sundays, 10:30-12:00 from October 4, 2015 through January 24, This course has 15 classes in total. No class because of the IGSAP Orientation on October 4 and an international conference on November 1. The following is the tentative schedule. # Date Topic Contents Reference IGSAP Orientation Skip but counted Orientation Students should understand the course 9:30 objective, course class materials, schedule, starts and grading of this course Framework for business Students learn a Read Chapter 1 analysis and valuation comprehensive framework for business analysis by using financial statement information Strategic analysis Students understand Read Chapter 2 how to evaluate the economic condition of a firm and to identify the firm s profit drivers and key risks. If students obtain the skills, he or she can assess the sustainability of the firm s operations and to forecasts its future performance. 2

3 Accounting analysis: Students learn how to Earnings management Numbers Game CUC International Conference at CUC 13:00-14:30 analyze the degree of distortion in a firm s accounting numbers. Students need to understand two kinds of earnings management: accruals management by employing accruals and real management by using cash flows. Professor Matthias Kipping, York University International Careers in Accounting, Finance and Consulting Accounting analysis: Students learn how to analyze the degree of distortion in a firm s accounting numbers. Students need to understand two kinds of earnings management: accruals management by employing accruals and real management by using cash flows Earnings quality 1 Students learn how to assess earnings quality such as accruals quality, discretional accruals, and accuracy for future cash flows. Chapter 3 #1 Palepu and Read #3 Jones (1991) and #4 Roychowdhury, (2006). Chapter 4 in #1 Palepu and Read #3 Jones (1991) and #4 Roychowdhury, (2006). Read #2 Earnings Management and Earnings Quality (Nakashima 2015) 3

4 Earnings quality 2 Students learn how to assess earnings quality such as accruals quality, discretional accruals, and accuracy for future cash flows Earnings quality 3 Students learn how to assess earnings quality such as accruals quality, discretional accruals, and accuracy for future cash flows Financial analysis: ratio Students understand analysis financial analysis such 9:30 as ratio analysis. Ratio class analysis involve starts. assessing how the items in a firm s financial statements are related to one another. Also, the ratio analysis focus on examining a firm s income statement item such as net profit margin and its balance sheet item such as asset turnover and financial leverage. Read #2 Earnings Management and Earnings Quality (Nakashima 2015) Read #2 Earnings Management and Earnings Quality (Nakashima 2015) Read Chapter 5 4

5 Financial analysis: cash flows analysis Prospective analysis: Forecasting Cash flow analysis involve evaluating the firm s financial flexibility and liquidity, and how the firm manages the cash flows from operating, investing, and financing respectively. Cash flow analysis also provides an indication of the quality of the information in the firm s income statement and balance sheet. We focus on forecasting future performance. Students learn a comprehensive forecasting approach. Students need to understand the approach to focus on projecting condensed financial statements Paper presentation 1 Paper submission due prior to presentations regarding their selected firm analysis. Students present their analysis paper Paper presentation 2 Paper submission due prior to presentations regarding their selected firm analysis. Students present their paper. Read Chapter 5 Read Chapter 6 Presentation by PPT is encouraged. Presentation by PPT is encouraged. 5

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