Financial Statement Analysis

The course is concerned with various aspects of the analysis and interpretation of financial statements. In addition to examining the basic techniques of financial analysis, such as accounting and financial ratio analysis, the course places the interpretation and understanding of financial statements into a broader context by:

• Considering the information needs of different stakeholders;  
• Linking the interpretation of financial statements to an organization’s core strategies, risks and opportunities;  
• Examining the role and importance of narrative reporting; and  
• Providing perspectives on the quality and reliability of accounting information.
• Understanding how to use and critique generative AI tools in this context.  

BMAN20081 has pre-requisites of: BMAN10501 AND BMAN10522 / 10522(M) or BMAN10621 AND BMAN10552 @60% or BMAN10621(M) AND BMAN10522 / 10522(M).

BMAN10501 and BMAN10522 or
BMAN10621 (A), (B) or (M); and BMAN10522 or BMAN10522(M) or
BMAN10621 (A),(B) or (M);  and BMAN10552 subject to passing the BMAN10552 examination at 60% or above.

Co-requisites: None

Dependent course units: BMAN30190 (Only available to students specialising in Finance either singly or jointly and provided all the following area pre-requisites have been passed BMAN23000 (A) or (B), BMAN20072 and BMAN20081).

Dependent course units BMAN31000 (Only available to students specialising in Accounting, including Business Accounting, either singly or jointly and provided all the following area pre-requisites have been passed BMAN21020, BMAN21040, and BMAN20081. In addition BMAN23000A or BMAN23000B must have been passed or is being taken as a co-requisite with BMAN31000).

Pre-requisite course units have to be passed by 40% or above at the first attempt unless a higher percentage is indicated within this course outline. If the pre-requisite unit is defined as a compulsory course unit within your programme of study (Maths with Finance, IBFE, Accounting, BA Econ pathways for example) then progression onto the dependent unit is permitted as long as you have gained the appropriate amount of credit to progress on to the following year of your registered undergraduate programme.

Pre-requisites: see above

The unit aims to: Increase knowledge of the theory and practice of financial statement analysis and place it in its broad societal business, accounting and financial context.  

Students should be able to:

 

Fundamental techniques for analysing and interpreting financial statements, including accounting and financial ratio analysis.

Evaluation of the information requirements of various stakeholders in financial reporting.

Integration of financial statement analysis with organizational strategy, assessment of risk, and identification of business opportunities.

Exploration of narrative reporting and its role in providing context and depth to financial disclosures.

Critical assessment of the quality, reliability, and limitations of accounting information.

Application and evaluation of generative AI tools for financial statement analysis and interpretation. 

Lectures: 10 two-hour lectures including a clinic session at the end of the course

Workshops: Four one-hour workshops  

 

Students are supplied with a workbook containing both self-study and workshop activities. Self-study activities are supplemented by short videos and other asynchronous learning materials. 

KU1: Understand how to calculate and interpret a range of accounting ratios from the financial statements of large companies

KU2: Understand the role of, and draw upon, the strategic (competitive and sustainability) context of a business in interpreting that business's financial statements 

IS1: Effectively interpret financial statements from the perspective of the forward-looking information needs of different stakeholders

IS2: Appreciate the complex nature of real life financial statement ratio calculations 

IS3: Understand a range of factors that can indicate the quality and reliability of financial statement information

PS1: Appreciate the various sources of data that may be useful in analysing the position, performance and future prospects of a firm

PS2: Understand how to use and critique generative AI in the context of financial statement analysis 

TS1: Gain relevant employability skills useful to internships and future work involving investment analysis and decision-making 

Online examination (100%)

 

 

Methods of Feedback to Students

• Post-assessment general feedback to all students/brief individual comments relating to each submission.
• Informal advice and discussion during a lecture or workshop.
• Responses to student emails and questions from a member of staff including feedback provided to a group via an online discussion forum.
• Peer to peer feedback via workshop activities
• Generic feedback posted on Blackboard regarding overall examination performance.

Palepu, K.G., Healy and Peek, E. 2025. Business analysis and valuation: An international perspective. 7th edition, Cengage Learning, EMEA.

 

Deegan, C. 2023. Financial Accounting Theory. 5th edition, Cengage Australia.  

 

Other journal articles and business reports as indicated on a weekly basis. 
 

Programme Restrictions: There are no programme restrictions for this course providing the pre-requisites listed above are met.

BMAN20081 is available to study abroad and exchange students admitted through the University of Manchester International Programmes Office.