Statement Analysis Course Research Articles

Application of an Environmental, Social and Governance (ESG) Course to Enhance the Knowledge of Sustainable Finance of International Chinese College Students in Thailand

The aim of this study was to build an ESG course for integration into a Financial Statement Analysis course to develop the knowledge of sustainable finance of international Chinese college students in Thailand. The study was based on a quasi-experimental design and a total of 108 international Chinese students majoring in finance in Thailand participated in the research. 58 of them were assigned to the experimental group, and the remaining 50 to the control group. The intervention of the ESG course was applied to the experimental group for a 45-hour’ period over 6 weeks, while the control group received traditional teaching in the same period of the class schedule. At the same time, an ESG learning assessment was applied to a pre-test and post-test and the data was subjected to a statistical analysis. The results of a one￾way ANCOVA showed that the performance of the experimental group on the ESG learning assessment was better than that of the control group.

The saga of a Chinese company being listed on a US stock exchange – a global financial reporting case study

Research methodology We obtained information on China Gerui from secondary published sources, including annual reports downloaded from the Securities and Exchange Commission’s (SEC) EDGAR database, news sites and newspapers, the company’s website and journal articles. One of the authors visited the China Gerui plant in Henan, China. Case overview/synopsis China Gerui, a Chinese metal fabrication company, enjoyed exponential growth because of its location, product innovation and ability to move up the value chain. At the height of its success, the company listed on the Nasdaq and had plans to raise capital to fund ambitious expansion plans. Unfortunately, four years after listing on Nasdaq, the company received a letter from the listing qualifications department notifying China Gerui that they were not in compliance with Nasdaq’s filing requirements because it had not filed its Form 20-F. Now, the company had only five days to decide whether to request an appeal of the letter. Complexity academic level This case is best suited for higher-level undergraduate accounting and finance courses such as intermediate accounting, auditing, international accounting, financial statement analysis, corporate finance and investments analysis. It is especially appropriate for graduate-level global accounting and advanced financial statement analysis courses. In these courses, the best placement is after coverage of SEC regulations and requirements for financial statement reporting and disclosure. Moreover, the case may be used as a tool to demonstrate the step-by-step process for searching and retrieving information from a public company’s filings through the SEC’s EDGAR database. Supplementary materials Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

Departmental stores in India: financial performance analysis

Learning outcomes After completion of the case, students will be able to understand the following: how to understand financial statements, income statements and cash-flow statements with the help of ratios; understand the concept of shareholding pattern along with different entities, namely, non-promoters, foreign institutional investor, domestic institutional investor and others; financial ratio analysis with traditional DuPont and extended DuPont analysis; understand the differences between comparable firms; how to analysis return, risk, covariance, correlation, market risk and capital assets pricing model (CAPM) and how to suggest an appropriate investment strategy. Case overview/synopsis The case presents company background and financial statements of four companies listed under departmental stores in India, namely, Vmart retail, V2 retail, Avenue Supermarts (known as DMart) and future retail. Students are asked to determine, which company is performing better to make a recommendation for investment. Students learn the tools of financial ratio i.e. profitability, efficiency, liquidity and market-based ratio along with the traditional DuPont decomposition and the extended DuPont analysis. Students also learn how to measure stock return, standard deviation, covariance, correlation, market risk and CAPM. Complexity academic level This case is suitable for management accounting, financial analysis and security analysis and portfolio management courses at the post-graduate or graduate levels. The case can be used in similar courses such as in financial statement analysis courses or security analysis and portfolio management courses. Supplementary materials Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes. Subject code CSS: 1 Accounting and finance.

Put Your Best Text Forward: Introducing Textual Analysis into the Accounting Classroom

ABSTRACTThe use of textual analysis methods in the accounting profession has grown markedly over the past decade. Accounting professionals as well as business and accounting accreditors have called for accounting students to acquire an increased depth and breadth of knowledge of digital data analytics. This case enables accounting instructors, who have no previous background or experience in textual analysis, to introduce students to the use of textual analysis in accounting and allows students to conduct simple analyses using freely available software and documents retrieved from publicly available SEC filings. This case is designed for auditing, accounting information systems, fraud examination, and financial statement analysis courses, but it can be used in any accounting course in which the content of relevant documents is subject to examination.

Facebook as a Pedagogical Tool in Fostering Students’ Critical Thinking Skills

This study examineswhether the implementation of Facebook as a pedagogical tool enhances critical thinking skills among final year accounting students who enrolled in financial statement analysis course. A Facebook group was set up and students were encouraged students to use the Facebook group as a platform to discuss and share resources relating to their group project. The critical thinking skills is analysed based on students’ achievement in addressing thegroup project, which is assessed using a rubric for critical thinking skills. The study finds that the use of the Facebook group fosters critical thinking skills among students with the Facebook group (the experimental group) as compared to students without the Facebook group (the control group). These findings are noteworthy since final year accounting students are struggling with critical thinking skills, yet it is an essential skill for accounting professionals. The results of this study is hoped to encourage educators in the digital age to make use of social media as a technology-enhanced learning environment for the benefits of students.

Examining belief-adjustment model and investors overconfidence on investment decision making

This research aims to examine whether there is a different judgment between the investor who receives good news followed by bad news and the one who receives bad news followed by good news information order in the step-by-step and the end-of-sequence disclosure pattern by using financial information type and non-financial information type and overconfidence characteristics on investment decision making. This research is included in the experimental design by using a mixed design of between-subjects and within-subject design and classified as experimental research which uses the 2x2x2 method. Participants used in this research are undergraduate business students in STIE Perbanas Surabaya who are studying and/or have completed investment management and/or financial statement analysis courses who will serve as non-professional investors. The results obtained in this research showed that recency effect occurred between the investor who receives good news followed by bad news and the one who receives bad news followed by good news in the step by step disclosure pattern, while there is no order effect occurred when the disclosure pattern used is the end-of-sequence. JEL Classification : G02, G11, G17 DOI: https://doi.org/10.26905/jkdp.v23i4.3203

Apple Inc.: An Application of Financial Analysis, 2003–2018

Since its launch out of a garage in 1976, Apple Inc. had transformed from a computer-manufacturing company to the undisputed leader in diversified consumer electronics and media. Unparalleled financial performance along almost every metric followed, and in September 2018, Apple's market capitalization topped $1 trillion, the first time a US publicly traded company reached that mark. Using the company's financial statements, this case provides a longitudinal view of Apple over 2003–2018. Using these data, students can perform a variety of financial analyses in order to assess how Apple has evolved over time. These include computations of traditional analysis metrics (e.g., ROE and gross margin), but also critical valuation inputs (e.g., free cash flow and implied terminal growth). This case is used at Darden in the second-year Financial Statement Analysis course. It would also be suitable in earlier accounting and finance courses, and even executive education programs, wherein the objective is to review financial statements and discuss critical financial metrics. Excerpt UVA-C-2420 Rev. Apr. 10, 2019 Apple Inc.: An Application of Financial Analysis, 2003–2018 Quality is much better than quantity. One home run is much better than two doubles. —Steve Jobs, 1955–2011 As of 2018, Apple Inc. had been one of the best-known companies in the world for over four decades, unarguably reaching iconic status. Steve Jobs, Apple's deceased cofounder and CEO, was widely regarded as one of the elite group of visionaries whose ideas and products significantly changed the world. Since its launch in a garage in 1976, with handmade personal computers as its first product offering, the company had adapted and innovated, staying true to creating unique, high-quality electronic devices that carried mass appeal. Over the years, Apple had transformed from primarily a computer-manufacturing company to the undisputed leader in diversified consumer electronics and media. Unparalleled financial performance along almost every metric followed. Since 2003, total sales had increased over 20 times. Profit margins more than doubled. And in September 2018, Apple's market capitalization topped $ 1trillion, the first time a US publicly traded company reached that mark. . . .

Lakeview Hotel Investment Corp.

ABSTRACT Lakeview Hotel Investment Corp. (LHIC) is a publicly traded owner and operator of hotel properties located primarily within smaller centers in western Canada. The case provides students with the opportunity to develop research and analytical skills by investigating related party disclosures found within LHIC's financial statements. Students are asked to identify related parties and analyze the transactions between LHIC and its related parties. They are then directed to comment on the underlying value of the transactions. This case illustrates both how much can be learned by careful reading and analysis of related party transaction disclosures and also how many questions about related party transactions remain unanswered based on the information contained in financial statements. Although all information used in the case is publicly available, the degree of difficulty can be adjusted for use within undergraduate and graduate courses by varying the amount of information provided to students. This case is suitable for intermediate financial accounting, accounting theory, and financial statement analysis courses.

A Financial Analysis Exercise: Exxon Mobil vs. Royal Dutch Shell, US GAAP vs. IFRS

This exercise is designed to provide non-accounting majors with a learning experience to integrate the international issues of financial statement formats and reporting standards into financial statement analysis. The exercise requires the use of the 2009 10-K of Exxon-Mobile and the 2009 20-F of Royal Dutch Shell including selected footnotes and disclosures. The year 2009 is selected because of the volatility in crude oil prices between 2008 and 2009. The exercise is completed in three distinct assignments stages; each stage permits students to focus on particular elements of the analysis. The first stage focus is differing financial state58 The BRC Academy Journal of Education Vol. 4, No. 1 ment format and presentation, the second stage focus is cross period and firm analysis, and the third stage focus is US GAAP and IFRS reporting differences. The best learning results are provided if students have a reasonable level of familiarity with financial statement analysis. The exercise has been used is an MBA core accounting course, but is suitable for an undergraduate financial statement analysis course.

WaMu's Option-ARM Strategy

ABSTRACT At the end of 2007, Washington Mutual, Inc. (generally known as “WaMu”) was the largest savings and loan bank in the U.S., based on assets ($328 billion) and revenue ($25.5 billion). Less than nine months later, WaMu was seized by federal regulators and sold to JPMorgan Chase for $1.9 billion in a transaction facilitated by the Federal Deposit Insurance Corporation (FDIC). During the worst recession since the Great Depression, WaMu became the largest U.S. bank failure in history. This case illustrates how a financial institution's business strategy affects risk and how these characteristics are revealed in the financial statements. Students assume the role of a financial analyst examining WaMu's 2007 10-K after its release in March 2008. In particular, they evaluate the quality of WaMu's loans and the adequacy of WaMu's estimates for loan losses, one of the most important discretionary accruals for financial institutions. Students gain insights into the consequences of WaMu's business strategy to emphasize high-margin loan products by comparing WaMu to (1) the relatively conservative Wells Fargo Bank and (2) the average large FDIC bank. This case has been used successfully in graduate-level financial statement analysis courses.

Introducing XBRL through a financial statement analysis project

Abstract In this project, we introduce business and accounting students to the application of eXtensible Business Reporting Language (XBRL) through the use of interactive data. Students study the basic concepts and potential benefits of interactive data and XBRL. Students learn to extract the financial reports of two companies in the same industry. Then, using traditional financial analysis techniques (ratio analysis) students can compare the performance of these companies. Thus, the project accomplishes two important objectives: it introduces students to the benefits and features of XBRL-tagged financial reporting and interactive data, and it shows how this medium can be used to facilitate the analysis of financial statements. The project uses free, publicly available interactive data tools to accomplish these objectives. This project is appropriate for any level of financial accounting course in which students use public company financial statements to generate financial ratios and conduct analysis on them. We aim the project at MBA-type introductory accounting courses. In addition, we show how it can easily be expanded to be applied to higher level financial statement analysis courses, both at the undergraduate and graduate levels. The project provides some background into how XBRL-tagged financial reporting is generated, while the main focus is on application of interactive data and not the technology itself. Since XBRL is now mandated by the US Securities and Exchange Commission (SEC) for most reporting entities, it is critical for today’s business students to be familiar with this method of communicating financial information.

An Empirical Examination Of The Usefulness Of The Motley Fools Flow Ratio

An item in the Motley Fool recently caught our attention. The article Cisco vs. Lucent: The Flow Ratio Tells All (by Matt Richey, June 6, 2000, in The Motley Fool.fool.com), introduced a new ratio that Richey claimed to be useful for measuring the investment worthiness of a company. Since our Financial Statement Analysis course covers traditional ratio analysis and since we were exploring some research ideas on measuring liquidity, the Fool Ratio seemed worthy of investigation.

Are MBA Students a Good Proxy for Non-professional Investors?

We investigate a key assumption underlying much of the experimental research in financial accounting that graduate business students are a good proxy for non-professional investors. To conduct our investigation, we categorize recent experimental studies in financial accounting based on the relative level of integrative complexity inherent in each study's task. We then conduct experiments using two tasks, one that is relatively low in integrative complexity and one that is relatively high in integrative complexity, and compare the responses of two groups of MBA students and non-professional investors. Our results suggest that using MBA students as a proxy for non-professional investors is a valid methodological choice, provided researchers give careful consideration to aligning a task's integrative complexity with the appropriate level of MBA student. MBA students who have completed their core MBA courses and are enrolled in or have completed a financial statement analysis course are a good proxy for non-professional investors in tasks that are relatively low in integrative complexity. Though less definitive, the majority of our tests also suggest that these students are a good proxy for non-professional investors in tasks that are relatively high in integrative complexity. However, care must be taken when using students in the first-year core financial accounting course. In tasks that are relatively low in integrative complexity, these students perform similarly to non-professional investors except when they are asked to make an investment decision. In tasks that are relatively high in integrative complexity, these students acquire information similarly to non-professional investors, but they do not appear to integrate the information in a similar manner.

Growth rates as measures of financial performance

This teaching note provides a vehicle to help students understand, calculate, and communicate growth rates as part of the process of financial performance evaluation. The note also makes use of the graphic capabilities and functions available within Excel. Graphics are widely used by companies in their annual reports to highlight financial performance and to focus on change over time. Many companies also report 3, 5, and 10 year growth rates for selected financial data in their annual reports. Alternative approaches for calculating growth rates are presented with a focus on understanding the differences that can exist in the resulting calculated values. The underlying biases and the advantages of each approach are discussed. A project appropriate for classroom use in a Financial Accounting or Financial Statement Analysis course is included in an Appendix.

Are M.B.A. Students a Good Proxy for Nonprofessional Investors?

We investigate a key assumption underlying much of the experimental research in financial accounting that graduate business students are a good proxy for nonprofessional investors. To conduct our investigation, we categorize recent experimental studies in financial accounting, based on the relative level of integrative complexity inherent in each study's task. We then conduct experiments using two tasks, one that is relatively low in integrative complexity and one that is relatively high in integrative complexity, and compare the responses of two groups of M.B.A. students and nonprofessional investors. Our results suggest that using M.B.A. students as a proxy for nonprofessional investors is a valid methodological choice, provided researchers give careful consideration to aligning a task's integrative complexity with the appropriate level of M.B.A. student. M.B.A. students who have completed their core M.B.A. courses and are enrolled in or have completed a financial statement analysis course are a good proxy for nonprofessional investors in tasks that are relatively low in integrative complexity. Though less definitive, the majority of our tests also suggest that these students are a good proxy for nonprofessional investors in tasks that are relatively high in integrative complexity. However, care must be taken when using students in the first-year core financial accounting course. In tasks that are relatively low in integrative complexity, these students perform similarly to nonprofessional investors except when they are asked to make an investment decision. In tasks that are relatively high in integrative complexity, these students acquire information similarly to nonprofessional investors, but they do not appear to integrate the information in a similar manner.

Survey of Financial Statement Analysis Courses in Europe and the United States

The paper reports the results of a survey of the content and learning materials used in courses in financial statement analysis in Europe and the United States. Courses in Europe and undergraduate courses in the US exhibit similar characteristics with respect to course content (heavy emphasis on basic tools of analysis). Graduate courses in the US place heavier emphasis on coverage of generally accepted accounting principles and on applications of basic analytical tools. Differences in course content appear related to where the financial statement analysis course lodges within the accounting curriculum.

Using an intranet to facilitate student-centered learning

Abstract This paper describes the use of computer-aided learning and an intranet in a third year financial statement analysis course in 1996. The course required students to create a substantial report on the financial analysis of an allocated company. A series of small movies of relevant computer skills were used by students over an intranet. These movies replaced the need for tutor based demonstration on these topics. The intranet was also used to supply a wealth of data and information, including financial and share price data, exams, focus questions, lecture notes, and newspaper articles. Students also had access to several mirrored sites on the intranet, including sites of some of the companies under student investigation. This provided students with convenient, fast, no cost access to a wider range of text and graphical information than was previously possible. Discussion groups were also created to allow discussion to occur outside the classroom. Student reaction has been favorable to the use of the Intranet in this course. The paper also briefly outlines how the Web site was created and discusses some of the resource issues.

Instructional Case: Detecting Earnings Manipulation

This case focuses on the use of financial statement analysis in the detection of earnings manipulation. Specifically, it draws on advances in the accounting research literature and provides a way of integrating this knowledge into an auditing or master's level accounting/financial statement analysis course. Students are required to assess the probability that a set of financial statements contain fraud by analyzing excerpts from the company's financial and proxy statements, and applying the Beneish (1997) probit model for detecting earnings manipulation. Students are also encouraged to utilize the Compustat database to compare the company's financial data to a peer group of firms in the industry. The appendix provides a discussion of academic research relevant to the analysis, including a description of simple analytical procedures, a listing of important qualitative risk factors to consider in assessing the likelihood of fraud (in part from Statement on Auditing Standards No. 82), and an in-depth description of the Beneish (1997) probit model. A spreadsheet is made accessible via the Internet for easy application of the model to the company in this case and to other companies.