Financial Information for Business Decisions

Module Title	Financial Information for Business Decisions
Module Code	25-6075-00L
Semester of Delivery	Full Year
Mandatory/Elective/Option	Option
Level	6
Credit Points	20

Assessment Mode Weighting	Coursework	50 % (30% groupwork, 20% individual)
	Examination	50 %
	NOTE: The University is currently reviewing its assessment regulations for 2008/09 and the assessment package for this module may be subject to change.
Pre-requisites	Introductory accounting module. This module is not available for students that have passed Financial Accounting and Reporting
Co-requisites	None

Breakdown of Student Learning Hours by Type	Class contact average 1.5 hours per week Directed learning 5 hours per week

Module Leader	Chris Jones
	Sheffield Business School
Module Banding	A

Aims and Rationale

These are the aims of this module:

To develop an understanding of the functions and form of financial statements
To develop an understanding of the significance of the regulatory, political and economic contexts for the understanding of publicly available financial information including corporate governance and audit.
To enable the student to access published financial statements and other financial and non financial data relevant to business decisions.
To develop a critical understanding of the analysis of financial statements and other sources of financial data

The reason for having this module and for having it at this level is

The module is designed to provide students who are not accounting specialists with the understanding of financial information they will need in order to communicate with finance specialists and contribute to effective management decisions. It will expose students to issues of a practical and academic nature concerning the understanding and use of financial data and particularly published financial statements. It builds on the general understanding of the nature of business developed by students in their earlier studies and also on their industrial placement.

By the end of the module you will be able to

understand the purposes of financial reports and how they are prepared;
understand the professional, political and economic contexts of corporate reporting including corporate governance and audit and critically assess the implications of these for the construction and understanding of financial statements;
identify examples creative accounting and more questionable manipulation of financial data and understand the effect and implications of this;
identify and critique the tools available for financial statement analysis for a variety of purposes;apply appropriate tools of analysis to a range of financial information from a variety of organisations (both UK and overseas);
understand the relationships between financial information and the operation of financial markets.

These are the main ways of learning and teaching which will help you to achieve the learning outcomes

Topics will be introduced by way of lectures, and developed in seminars but there will be flexibility in the use of these. Students will work in learning sets on a variety of topics including a project which identifies, analyses and interprets the financial information available prior to and during the running of the module relating to a specific large company of their own choosing. Learning sets will be expected to make presentations on various topics during the course. Information sources will include databases such as Datastream and FAME.

This is how the learning outcomes will be assessed

There is a strong emphasis on co-operative learning and students will be expected to contribute to the assessment process through the allocation of group marks. Skills of critical analysis and demonstration of knowledge will be assessed partly through coursework closely related to a specific company and partly by 2 hour terminal examination.

This is how and when you will be given feedback on your performance

Students will be provided with feedback on their progress in achieving the desired learning outcomes via a combination of seminar activities (formative) and case studies, including their chosen company (both formative and summative). Verbal feedback will be provided both on interim group reports on their chosen company and also on a group presentation (contributing to final grading) prior to the submission of both group and individual reports. Written feedback will be provided on the written group and individual reports.

Assessment criteria All outcomes are assessed through both coursework and examination

Learning outcome	0-40	40-50	50-60	60-70	>70
Understand the purposes of financial reports and how they are prepared	Fails to demonstrate an adequate understanding of the roles and context of financial reports	Some understanding but largely reproducing texts etc.	Satisfactory understanding with some application and exemplars	Good understanding including wide-ranging application and exemplars	Excellent understanding with perceptive and focused analysis of key issues, breadth of data gathering and critical insight.
Understand the professional, political and economic contexts of corporate reporting including corporate governance and audit and critically assess the implications of these for the construction and understanding of financial statements (both UK and overseas);	Fails to demonstrate an adequate understanding of the contexts and how they have shaped financial reporting	demonstrates an understanding of the contexts and how they have shaped financial reporting but largely derivative in nature	Satisfactory understanding with some application and exemplars	Good understanding including wide-ranging application and exemplars	Excellent understanding with perceptive and focused analysis of key issues, breadth of data gathering and critical insight.
Identify examples creative accounting and more questionable manipulation of financial data and understand the effect and implications of this	No real grasp of the possibilities for the manipulation of financial data	Some understanding that financial can be manipulated but little idea of the practical ways in which this can be achieved	Satisfactory understanding of the manipulation of financial information with practical examples	Good understanding of the manipulation of financial information including appropriate examples	Excellent, perceptive and focused analysis understanding of the manipulation of financial information gathering and critical insight.
Identify and critique the tools available for financial statement analysis for a variety of purposes and apply appropriate tools of analysis to a range of financial information from a variety of organisations (both UK and overseas);	Weak or no understanding of the use of ratios etc. Fails to go beyond mechanical calculation	Limited understanding of the use of ratios etc. Fails to go much beyond mechanical calculation. Limited understanding of meaning.	Clear grasp of theory and good information relating to the chosen company. Good application of techniques	Good critical consideration of theoretical context and perceptive application to chosen company	Excellent and perceptive critique of theory, with focused and insightful application to chosen company
Understand the relationships between financial information and the operation of financial markets	Weak or no understanding of the working of financial markets or the influence of financial information	Limited understanding of the working of financial markets or the influence of financial information, doesn't go much beyond the basic content of textbooks	Clear grasp of theory and good information relating to the chosen company. However, could show more perception	Good critical consideration of theoretical context and perceptive application to chosen company	Excellent and perceptive critique of theory, with focused and insightful application to chosen company and evidence of a real grasp of the issues surrounding financial markets.

These are examples of the content of the module and the main learning resources you will use

Indicative content

Sources of financial data relating to companies and databases available at SHU
The background of accounting, its history and general form
The purpose and structure of financial statements - the Accounting Standards Board Statement of Principles
Values in financial statements
The effect of accounting choice and manipulation of financial statements. The importance of accounting policies
The agency problem, executive rewards, corporate governance and audit
Accounting/legal regulation and standards
A structured approach to the interpretation of financial statements
Cash flow analysis
Credit analysis
The significance of stock market prices and the relationship of these to financial information including dividend, earnings and other announcements
International aspects of financial reporting including the move to an international accounting standards system
The prediction of corporate failure

Learning resources

At this stage, the best text identified for the course is Financial Information Analysis Philip O'Regan 2001 John Wiley and alternative is Financial Analysis(Second Edition) by Bill Rees, published by Prentice Hall but this is getting a little out of date. Neither text covers all dimensions of the module and other readings will be given in the form of staff prepared materials and selected journal articles.

Students will be given training on the use of various databases available at the University and they will be expected to carry out independent research of topics covered. They will also be expected to access financial information that is available through the financial press etc.

Sheffield Business School, Howard Street, City Campus, Sheffield Hallam University, Sheffield, S1 1WB
Student Support - All Full Time students: Student Help and Information Point, Level 1, Stoddart, City Campus Telephone 0114 225 5256
Part Time Postgraduate and Doctoral students: The Welcome Point, Level 1, Stoddart, City Campus Telephone 0114 225 2820