Requirements

• Knowledge of finance and accounting
• Basics of business valuation

Investors and creditors need reliable and comparable information on various aspects of companies to make informed decisions. A frequently used source of information is the annual report, which includes the financial statements as well as other reporting elements. This lecture introduces financial statements under international law and highlights various methods for analyzing the information in the balance sheet, income statement, and cash flow statement to gain insights into, for example, a company’s profitability, operational efficiency, and liquidity. It also presents approaches for using financial statement data for the purpose of business valuation.

Students

• have a basic understanding of the content and structure of financial statements under international law,
• can apply financial ratios and methods of financial analysis in a targeted manner,
• are able to assess a company’s profitability in a nuanced manner,
• are able to evaluate a company based on profit and cash flow figures,
• are able to assess the quality of financial statements.

• Alexander, D. and C. Nobes (2020): Financial Accounting – An International Introduction, 7th ed., Pearson.
• Palepu, K.G. et al.  (2022): Business Analysis and Valuation - IFRS Edition, 6th ed., Cengage.