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Financial Statesments Analysis

Code: 102376 ECTS Credits: 6
Degree Type Year Semester
2501573 Economics OB 2 1
The proposed teaching and assessment methodology that appear in the guide may be subject to changes as a result of the restrictions to face-to-face class attendance imposed by the health authorities.


Isabel Narbón Perpiñá

Use of Languages

Principal working language:
catalan (cat)
Some groups entirely in English:
Some groups entirely in Catalan:
Some groups entirely in Spanish:


José Javier Romero Mogorrón
Isabel Narbón Perpiñá
Sebastián López Estrada
Yulia Ponomareva
Inmaculada Ruiz Busons
Pedro Escudero Fernández


To make the most of this course, it is recommended the students have passed the course of Introduction to Accounting, which is taught during the first academic year in the Faculty of Business and Economics at the UAB. This last course provides the accounting knowledge necessary to follow the contents of the course of Financial Statement Analysis. 

Objectives and Contextualisation


This is a mandatory 6 credit ECTS subject for the UAB degrees of Business Administration and Economics that is offered during the first semester of the second academic year.

Financial Statement Analysis complements the knowledge acquired on the course of Introduction to Accounting, in which the students have learnt the basic accounting methods as well as the main accounting statements and the way they are formulated.


The objective of this subject is to teach the main financial statements of the companies: balance sheet, income statement, annual report, statement of changes in equity and cash flows statement.

The teaching of analysis tools and techniques will allow the financial statements evaluation in order to make a diagnosis of the company’s past financial and economic situation (solvency and profitability). This also will help to understand the company’s future evolution and to make decisions about the mentioned situation.

To achieve this objective the methodology will be focused on practices using real accounting statements, and based on a theoretical knowledge about the elemental accounting statements.


  • Apply theoretical knowledge of finances to improve relations with sources of financing, identifying the different forms of financing and the advantages and disadvantages for the company and the providers.
  • Capacity for independent learning in the future, gaining more profound knowledge of previous areas or learning new topics.
  • Generate and transmit the information necessary for taking decisions at company headquarters level.
  • Identify improvements in the internal management process to stimulate company productivity.
  • Organise the work in terms of good time management, organisation and planning.
  • Select and generate the information necessary for each problem, analyse it and take decisions based on that information.
  • Show motivation for carrying out quality work and sensitivity to the consequences for the environment and society.
  • Use of the available information technology and adaptation to new technological environments.
  • Value ethical commitment in professional practice.

Learning Outcomes

  1. A capacity of oral and written communication in Catalan, Spanish and English, which allows them to summarise and present the work conducted both orally and in writing.
  2. Analyse business sectors on the basis of annual accounts.
  3. Assess ethical commitment in professional activity.
  4. Assess the usefulness of compatibility for potential users.
  5. Capacity to continue future learning independently, acquiring further knowledge and exploring new areas of knowledge.
  6. Demonstrate motivation regarding the quality of the work performed and sensitivity regarding the consequences on the environment and society.
  7. Identify the decisions that can be made on the basis of accounting information.
  8. Interpret the profitability indicators of a company and prepare decision-making.
  9. Interpret the solvency indicators of a company and understand the decisions that can be made on the basis of this analysis.
  10. Organise work, in terms of good time management and organisation and planning.
  11. Perform a diagnosis on the basis of the economic and financial analysis of a company.
  12. Recognise the qualitative variables that can influence decision-making based on the financial statements.
  13. Select and generate the information needed for each problem, analyse it and make decisions based on this information.
  14. Use available information technology and be able to adapt to new technological settings.



  1. The Purpose of Financial Reporting.
  2. Business information.
         2.1. Annual report.
         2.2. Sources of business information.
  3. The role of qualitative information. Influence of risk decisions.
  4. Users of business information.
  5. The adversarial nature of financial reporting.
  6. Analysis tools: percentages, growth rates and ratios.


  1. The balance sheet.
        1.1.   Structure and financial assets and liabilities. The value problem.
        1.2.   Elements of the financial assets and liabilities and the problems in their valuation.
        1.3.   Analysis tools of the balance sheet: percentages, growth rates and ratios.
  2. The income statement. Revenues and expenses recognition.
         2.1. Structure and intermediate results. What is profit?
         2.2. Elements of the intermediate results.
                 2.2.1. EBIT, EBITDA and net profits.
                 2.2.2. The gross, operating and net margins.
         2.3.   Analysis tools of the income statement: percentages, growth rates and ratios.
  3. The report of the chairman and the notes to the accounts.
         3.1.   Content and structure of the notes to the accounts.
  4. Content of the report of the chairman.
  5. The reliability of disclosure and audits.
  6. The role of the consolidated accounts.


  1. The statement of cash flows.
         1.1. Concept and mandatory level. Cash flow and company life cycle.
         1.2. Classification of cash flows. The financial flexibility.
  2. The statement of changes in equity.
         2.1. Concept and mandatory level.
         2.2. Total statement of changes in equity.
         2.3. The recognized statement of income and expenditure.


  1. The working capital and its funding needs.
  2. The operating cycle: the current assets cycle and the cash conversion cycle.
         2.1. Concept.
         2.2. Types of conversion periods.
         2.3. Relation with the short term solvency.
  3. Liquidity ratios.
  4. Current capital management through statement of cash flows.


  1. The financial equilibrium.
    Analysis of the long term solvency from ratios.
         2.1. Guarantee and financial autonomy ratios.
         2.2. Debt ratios and capital structure.

LESSON 6. PROFITABILITY (Equity analysis)

  1. The economic profitability (ROA: return on assets).
  2. The financial profitability (ROE: return on equity).
  3. Profitability components.
  4. The financial leverage (gearing effect).


  1. Financial Net Debt.
  2. Equity Value.
  3. Enterprise Value.
  4. Price-to-earnings (PER) ratio.


Teaching will be offered on campus or in an on-campus and remote hybrid format depending on the number of students per group and the size of the rooms at 50% capacity.

  • Theoretical classes: teacher’s presentations using supporting material.
  • Practical classes: analysis and discussion of real cases. Exercises resolution and practical cases to reinforce and apply the theoretical knowledge, working individually or in group, always under the teacher’s direction.
  • Tutorship: doubts resolution, monitoring of the assigned work and the prepared cases.
  • Autonomous student’s work: readings related to the matter, studying and preparation of diagrams, preparation of cases and exercises.
  • Evaluation tests and monitoring: written evaluations of the acquired knowledge.

The proposed teaching methodology may undergo some modifications according to the restrictions imposed by the health authorities on on-campus courses.


Title Hours ECTS Learning Outcomes
Type: Directed      
Practical classes 12 0.48 5, 10, 13, 14
Theoretical classes 33 1.32 6, 13, 14, 3
Type: Supervised      
Tutorships 7.5 0.3
Type: Autonomous      
Autonomous work 88 3.52 5, 6, 10, 13, 14, 3
Tests of evaluation and monitoring 5 0.2 10, 13


A student will be considered "No Evaluable” as long as they have not participated in any of the assessment tests. If the student goes to any test he no longer will be able to be considered as “No evaluable”.

All students with a grade lower than 3.5 points in the final exam will be receive a failing grade.

Calendar of evaluation activities

The dates of the evaluation activities (midterm exams, exercises in the classroom, assignments ...) will be announced in advance during the semester.

The date of the final exam is scheduled in the assessment calendar of the Faculty.

"The dates of evaluation activities cannot be modified, unless there is an exceptional and duly justified reason why an evaluation activity cannot be carried out. In this case, the degree coordinator will contact both the teaching staff and the affected student, and a new date will be scheduled within the same academic period to make up for the missed evaluation activity." Section 1 of Article 115. Calendar of evaluation activities (Academic Regulations UAB).

Students of the Faculty of Economics and Business, who in accordance with the previous paragraph need to change an evaluation activity date must process the request by filling out an Application for exams' reschedule https://eformularis.uab.cat/group/deganat_feie/application-for-exams-reschedule

Grade revision process

After all grading activities have ended, students will be informed of the date and way in which the course grades will be published. Students will be also be informed of the procedure, place, date and time of grade revision following University regulations.

Retake Process

"To be eligible to participate in the retake process, it is required for students to have been previously been evaluated forat least two thirds of the total evaluation activities of the subject." Section 3 of Article 112 ter. The recovery (UAB Academic Regulations). Additionally, it is required that the student to have achieved an average grade of the subject between 3.5 and 4.9.

The date of the retake exam will be posted in the calendar of evaluation activities of the Faculty. Students who take this exam and pass, will get a grade of 5 for the subject. If the student does not pass the retake, the grade will remain unchanged, and hence, student will fail the course.

Irregularities in evaluation activities

In spite of other disciplinary measures deemed appropriate, and in accordance with current academic regulations, "in the case that the student makes any irregularity that could lead to a significant variation in the grade of an evaluation activity, it will be graded with a 0, regardless of the disciplinary process that can be instructed. In case of various irregularities occur in the evaluation of the same subject, the final grade of this subject will be 0". Section 10 of Article 116. Results of the evaluation. (UAB Academic Regulations).

The proposed evaluation activities may undergo some changes according to the restrictions imposed by the health authorities on on-campus courses.

Assessment Activities

Title Weighting Hours ECTS Learning Outcomes
Comprehensive Final Examination (it is necessary a minimum of 3.5 points over 10 to pass the subject) 50% 2.5 0.1 2, 1, 5, 11, 7, 8, 9, 6, 10, 12, 13, 14, 3, 4
Exercises 10% 0 0 2, 1, 11, 7, 9, 12, 13
Mid term test - lessons 1 to 3 20% 1 0.04 10, 13
Mid term test - lessons 4 to 7 20% 1 0.04 10, 13



  • Subramanyam, K.R. (2013), "Financial Statement Analysis". Irwin Accounting


  • Walker, J. (2009): Accounting in a nutshell. Edició 3rd ed. Electronic resource from “Biblioteca de Ciències Socials. UAB”.
  • Wild, J; Subramanyam, K.; Halsey, R. (2005): Financial Statement Analysis. 9ª ed. Ed. McGraw-Hill.
  • Wahlen, J. M., Baginski S. P., Bradshaw, M. (2010): Financial Reporting, Financial Statement Analysis and Valuation: A Strategic Perspective, ed. South-Western College Pub, 7th edition.


  • Instituto de Contabilidad y Auditoría de Cuentas (ICAC). http://www.icac.meh.es
  • Banco de España. http://www.bde.es
  • Banc Central Europeu. http://www.ecb.int
  • Borsa de Madrid. http://www.bolsamadrid.es
  • Comisión Nacional del Mercado de Valores. http://www.cnmv.es
  • Guía Empresarial de Esade. http://www.guiame.net
  • Consell General de Cambres de Catalunya. http://www.cambrescat.es
  • Informe Anual de l'Empresa Catalana. http://www.gencat.net/economia/progecon/ecocat/inform.htm
  • Registro de Economistas Auditores. http://www.rea.es
  • Registre Mercantil. http://www.registradores.org
  • Instituto Censores Jurados de Cuentas de España. http://www.icjce.es