Università Roma Tre

Three modules are scheduled.
Module I –Accounting, Basic
Review of basic corporate financial reports and disclosures that serve as inputs to valuation analysis.
Module II – Financial Statement Analysis
Analysis of financial ratios to measure financial risks and returns; analysis of financial disclosures to identify red flags of potential distress or earnings manipulation;
Module III – Financial Statement Analysis and Debt Sustainability
The module is divided into three interconnected sub-modules.
Sub-module A addresses the issue of capital structure, with reference to debt monitoring tools in the context of financial restructuring as well as post-restructuring alternatives.
Sub-module B analyzes the criteria and the new guidelines for assessing the creditworthiness of a company, focusing on the tools and techniques for analyzing company data as well as on alert indicators for monitoring company financial dynamics.
Sub-module C proposes an in-depth analysis on derivative instruments for hedging purposes in the financial statements of companies, taking into account the assessments necessary to verify their effectiveness. The valuation elements in the absence of listing on the markets as regards unlisted bonds are the subject of in-depth analysis.
Classroom exercises are planned.

Course material
E-Book to download from course website (Moodle)

Key reading list
Sutton T (last edition), Corporate Financial Accounting & Reporting, Prentice Hall
Damodaran A. (last edition), Damodaran on Valuation: Security Analysis for Investment and Corporate Finance, Wiley Finance
Tutino M., Ranciaro V. (2020), Innovation in Financial Restructuring. Focus on Signals, Processes and Tools, Sumy, Ukraine, Virtus Interpress

Introduction
Part One. The business analysis: indexes and flows
First Section. The financial statement ratio analysis
The logical and accounting process of the financial statements.
The financial statements: the purpose of ratio analysis
The reinterpretation of the balance sheet for the purpose of financial analysis / balance sheet
The reinterpretation of the income statement to profitability analysis purposes
The asset analysis of the aspect: the organic framework of the quotients of capital structure
The financial analysis of the aspect: the organic framework of financial ratios
The profitability analysis: the organic framework of the income ratios
The weighted ratios
Section Two. The analysis of financial flows
The funds flow
The statement of changes in total financial resources
The cash flow statement of changes in net working capital
The financial statements of the liquidity fluctuations

Part Two - The economic capital
Purposes and subject positions in the company's assessments
Direct methods of evaluation of the economic capital
Theoretical indirect methods of estimating
The simplified income methods
The balance sheet methods
The mixed evaluation 'methods'
Application

Recommended reading

Part One:
G. Paolucci, Analisi di bilancio e finanziaria. Logica, finalità e modalità applicative, Franco Angeli, quinta edizione, 2021 ( o in alternativa G. Ferrero – F. Dezzani – P. Pisoni – L. Puddu, Le analisi di bilancio – indici e flussi, Giuffrè).
F. Manni – A. Faccia, Financial Accounting, ARACNE, 2019.
Part Two:
G. Zanda. - M. Lacchini - T. Onesti, La valutazione delle aziende, Giappichelli.