Academic management

According to the Undergraduate Degree in Accounting and Finance, Analysis of Financial Information is included in the module of Accounting, under the heading Financial Accounting.

Analysis of Financial Information is taken in the third year of the Degree, once the students have acquired some knowledge about financial accounting in the courses Introduction to Accounting and Financial Accounting I and II.

As users of financial information, students should be able to correctly interpret financial statements in order to evaluate the financial position of the company that has produced them, and by doing so, make appropriate decisions. In this sense, it is important to highlight the undoubtedly practical application of this subject because knowledge of financial information analysis is essential to many Accounting and Finance graduate professions such as risk analysts, investment analysts, auditors, financial managers, etc. Since Accounting is the language of business, in any professional position that involves dealing with accounting information, it is necessary to have a good understanding of analysis techniques.

It is highly recommended that the student has previously studied Introduction to Accounting (first year) and Financial Accounting I and II (second year).

The generic competencies which students will develop in Analysis of Financial Information include:

• Ability for abstract thinking, analysis and synthesis.
• Ability to plan and manage time.
• Ability to communicate both orally and through the written word in English.
• Skills in the use of information and communications technologies.
• Ability to search for, process and analyse information from a variety of sources.
• Ability to identify, pose and resolve problems.
• Ability to make reasoned decisions.
• Ability to work in a team.
• Ability to work in an international context.
• Appreciation of and respect for diversity and multiculturalism.
• Ability to be critical and self-critical.
• Ability to evaluate and maintain the quality of work produced.
• Ability to work autonomously.
• Ability to adapt to and act in new situations.
• Ability to motivate people and move toward common goals.
• Capacity to generate new ideas (creativity).
• Spirit of enterprise, ability to take initiative.
• Commitment to the conservation of the environment.
• Ability to show awareness of equal opportunities and gender issues.
• Ability to act with social responsibility and civic awareness.
• Ability to apply knowledge in practical situations.

The specific competencies which students will develop upon completion of the course are to:

• Develop competence and knowledge of financial management.
• Issue reports on the situation of a company.
• Understand the mechanisms involved in the processing of business information.
• Apply and interpret accounting regulations.
• Analyse and interpret the financial statements of a company.
• Draw up accounting information for decision making.
• Apply accounting standards for the preparation of the financial statements of a company.

As far as student learning outcomes are concerned, the knowledge and skills that students will achieve upon successful completion of the course will enable them to:

• Understand the accounting principles and procedures underlying the company’s financial statements at a basic level and apply them in the bookkeeping process and transaction analysis.
• Understand the accounting cycle, determining accounting profit and producing financial statements.
• Promote ethical behaviour in accounting and ensure standards of professional conduct.
• Analyse and interpret company Annual Accounts.
• Apply techniques and tools of financial analysis in order to measure business performance.
• Interpret business financial statements to evaluate the financial position of real companies, the success of their operations, and gain an insight into their future performance.
• Evaluate business management.

The following table shows the abbreviated programme of the course Analysis of Financial Information:

Abbreviated Programme

The detailed programme of the course, along with the specific objectives of each unit are listed below:

Detailed Programme and Unit Learning Objectives

Unit 1. Introduction to Financial Statement Analysis Using a Case Study

1.1. Introduction to financial statement analysis

1.2. Case study description

1.3. The relationship between the main financial statements

1.4. Calculation and interpretation of commonly used indicators of profitability and solvency

1.5. Formulation of an overall assessment of the financial position and performance of the company

Unit 2. The Annual Accounts

2.1. Standards for the preparation of Annual Accounts

2.2. The Annual Accounts in accordance with the Spanish General Accounting Plan (PGC)

2.2.1. The Balance Sheet

2.2.2. The Income Statement

2.2.3. The Statement of Cash Flows

2.2.4. The Statement of Changes in Equity

2.2.5. Notes to the Annual Accounts

2.3. The Consolidated Annual Accounts

2.4. Databases with accounting information for analysis

Unit 3. The Balance Sheet

3.1. The Balance Sheet in accordance with the Spanish General Accounting Plan (PGC)

3.2. Assets

3.3. Equity

3.4. Liabilities

3.5. Uses and limitations of the Balance Sheet for analysis purposes

Unit 4. The Income Statement

4.1. The Income Statement in accordance with the Spanish General Accounting Plan (PGC)

4.2. Results from operating activities

4.3. Net finance income / (expense)

4.4. Profit / (loss) for the period

4.5. Uses and limitations of the Income Statement for analysis purposes

Unit 5. The Statement of Cash Flows

5.1. Cash flow as cash movements

5.2. The Statement of Cash Flows in accordance with the Spanish General Accounting Plan (PGC). Preparation and interpretation

5.3. Uses of the information about cash flows for analysis purposes

5.4. An alternative definition of cash flow

Unit 6. Liquidity and Solvency Analysis

6.1. Tools and techniques for analysis: percentages, ratios and differences

6.2. Analysis of the financial structure equilibrium

6.3. Normal operating cycle analysis

6.4. Working capital analysis

6.5. Techniques and ratios for financial analysis

6.5.1. Short-term financial analysis

6.5.2. Long-term financial analysis

Unit 7. Profitability Analysis

7.1. Analysis of the Income Statement

7.2. Profitability ratios

7.3. Financial leverage (gearing)

7.4. Value Added: the Value Added Statement

7.5. Other indicators for analysis

The teaching-learning methodology used in the Analysis of Financial Information course is based on a combination of in-class and out-of-class activities, in both cases encouraging active student participation by means of the introduction of elements of discussion and argument during the classes, with a view to assessing and supervising students’ understanding of the topics explained.

In this discipline theory and practice are perfectly integrated, therefore any teaching method for accounting must necessarily have a strong practical orientation which helps the student face and confront economic reality by applying theoretical knowledge. Accordingly, in-class practical activities involve participative discussions and resolution of exercises wherein students take an active role, consolidating previously acquired knowledge and identifying gaps and doubts that may arise upon its implementation.

The students who follow the course in Spanish will use the following basic bibliography (Ediciones de la Universidad de Oviedo):

• Manual de Análisis de los Estados Financieros.
• Supuestos de Análisis de los Estados Financieros.

Additional resources to be used in the development of the course will be available to students through the Virtual Campus (Course Moodle), and they should be supplemented with the instructor’s explanations during in-class activities.

The proposed methodology of the course includes the following activities, described below:

In-class activities: 60 hours

• Lectures. Lectures are aimed at presenting the key concepts and theoretical aspects of the subject, which are illustrated with numerous examples. The course will foster active participation and student engagement.
• Practical sessions. These activities involve discussing and solving cases and exercises which will help students consolidate their understanding of the subject and develop their capability for analysis by applying previously acquired theoretical knowledge. Active-learning techniques will be used in order to encourage student participation and interpersonal interaction among students, as well as between the instructor and students.
• Evaluation session. Exam consisting of theoretical questions and practical exercises to assess student progress.

Exceptionally, if sanitary conditions require it, non-classroom teaching activities may be included. In this case, the student body will be informed of the changes made.

Out-of-class activities: 90 hours.

Student’s individual work. It consists of the following activities: reading lecture notes in advance and solving the cases and exercises at home before in-class practical sessions; subsequently studying what has been discussed in class; completing homework assignments and carrying out, where appropriate, any other out-of-class activities. It also includes the preparation of the final exam.

The following table summarises the distribution of time for each type of activity:

The following methods will be used to evaluate student performance:

1. Continuous assessment. This method of assessment will be based on objective follow-up tests and activities throughout the course. Since the content of this course is cumulative, students must demonstrate during the term that they understand and assimilate the subject by accomplishing certain goals and learning outcomes when these are required. Therefore, there will not be retakes for continuous assessment tests and activities.
2. Final exam. It is the overall assessment that takes place at the end of the learning process, which quantifies and evaluates student performance with a grade. Its primary purpose will be to measure the level of student achievement at the end of the course.

Grading system

The final grade in the ordinary examination will be a weighted average of scores on the continuous assessment and the final exam, with a weighting of 40% for the continuous assessment and 60% for the final exam. In the extraordinary examinations, students will be assessed through a single final exam which accounts for a maximum of 10 points (the grades obtained on the continuous assessment during the development of the course will not be maintained in the extraordinary examinations). Successful completion of the course is achieved when the student attains a final passing grade of 5 points or above (out of 10).

Exceptionally, if sanitary conditions require it, non-face-to-face evaluation methods may be included. In this case, the student body will be informed of the changes made.

Grading System Summary

Alternative Assessment for Part-Time Students

Students certified as registered part-time students, according to article 7 of the “Rules for the evaluation of learning results and the abilities acquired by students”, will be assessed through a single final exam, which will take place on the same date for all the students of the course. This final exam accounts for a maximum of 10 points. Successful completion of the course is achieved when the student attains a final passing grade of 5 points or above (out of 10).

Exceptionally, if sanitary conditions require it, non-face-to-face evaluation methods may be included. In this case, the student body will be informed of the changes made.

Please be advised that the University of Oviedo’s Code of Ethics, available at the following link: https://www.uniovi.es/en/launiversidad/panoramica/codigoetico, is in force and shall apply.

Bibliography in English

ATRILL, PETER; and MCLANEY, EDDIE (2019a): Accounting and Finance for Non-Specialists, Eleventh Edition, Pearson, England.

ATRILL, PETER; and MCLANEY, EDDIE (2019b): Financial Accounting for Decision Makers, Ninth Edition, Pearson, England.

ELLIOTT, BARRY; and ELLIOTT, JAMIE (2019): Financial Accounting and Reporting, Nineteenth Edition, Pearson, England.

FRASER, LYN M.; and ORMISTON, AILEEN (2016): Understanding Financial Statements, Eleventh Edition, Pearson, England.

SCHOENEBECK, KAREN P.; and HOLTZMAN, MARK P. (2013): Interpreting and Analyzing Financial Statements. A Project-Based Approach, Sixth Edition, Pearson, New Jersey.

SUBRAMANYAM, K.R. (2014): Financial Statement Analysis, Eleventh Edition, McGraw-Hill Education, New York.

TRACY, JOHN A. and TRACY, TAGE (2014): How to Read a Financial Report. For Managers, Entrepreneurs, Lenders, Lawyers, and Investors. Wringing Vital Signs out of the Numbers, Eighth Edition, John Wiley and Sons, New Jersey.

WALSH, CIARAN (2008): Key Management Ratios. The 100+ Ratios Every Manager Needs to Know, Fourth Edition, Prentice Hall (Pearson Education), England.

Bibliography in Spanish

Basic Bibliography

ÁLVAREZ PÉREZ, B.; DE ANDRÉS SUÁREZ, J.; CÁRCABA GARCÍA, A.; CASTRO PÉREZ, O.; FERNÁNDEZ RODRÍGUEZ, E.; GARCÍA CORNEJO, B.; GARCÍA DIEZ, J.; GARCÍA FERNÁNDEZ, R.; LORCA FERNÁNDEZ, P.; PÉREZ MÉNDEZ, J.A.; SUÁREZ ÁLVAREZ, E. (2021): Manual de Análisis de los Estados Financieros, 3ª edición corregida, Ediciones de la Universidad de Oviedo, Oviedo.

ÁLVAREZ PÉREZ, B.; DE ANDRÉS SUÁREZ, J.; CÁRCABA GARCÍA, A.; CASTRO PÉREZ, O.; FERNÁNDEZ RODRÍGUEZ, E.; GARCÍA CORNEJO, B.; GARCÍA DIEZ, J.; GARCÍA FERNÁNDEZ, R.; LORCA FERNÁNDEZ, P.; PÉREZ MÉNDEZ, J.A.; SUÁREZ ÁLVAREZ, E. (2021): Supuestos de Análisis de los Estados Financieros, 3.ª edición revisada y ampliada, Ediciones de la Universidad de Oviedo, Oviedo.

Supplementary Bibliography

AMAT i SALAS, O. (2013): Análisis Integral de Empresas. Claves para un Chequeo Completo: desde el Análisis Cualitativo al Análisis de Balances, Profit Editorial, Barcelona.

ARCHEL DOMENCH, P.; CARRASCO DEL AMO, F.; LIZARRAGA DALLO, F.; SÁNCHEZ ALEGRÍA, S. y CANO RODRÍGUEZ, M. (2022): Estados Contables. Elaboración, Análisis e Interpretación, Pirámide, Madrid.

CABAL GARCÍA, E.; CUERVO HUERGO, J.C.; DE ANDRÉS SUÁREZ, J.; GARCÍA FERNÁNDEZ, V. (2014): Manual de Análisis Contable (Segunda Edición), Servicio de Publicaciones de la Universidad de Oviedo, Oviedo.

CORONA ROMERO, E.; BEJARANO VÁZQUEZ, V.; GONZÁLEZ GARCÍA, J.R. (2014): Análisis de Estados Financieros Individuales y Consolidados, UNED, Madrid.

DE JAIME ESLAVA, J. (2010): Las Claves del Análisis Económico-Financiero de la Empresa, ESIC Editorial, Madrid.

GONZÁLEZ PASCUAL, J. (2016): Análisis de la Empresa a través de su Información Económico-Financiera. Fundamentos Teóricos y Aplicaciones, 5ª Edición, Pirámide, Madrid.

GONZÁLEZ PASCUAL, J. (2011): Análisis de la Empresa a través de su Información Económico-Financiera. Aplicaciones Prácticas, 4ª Edición, Pirámide, Madrid.

GUTIÉRREZ VIGUERA, M. (2011): Análisis Contable para Directivos, CISS, Valencia.

PÉREZ-CARBALLO VEIGA, J.F. (2010): Diagnóstico Económico-Financiero de la Empresa, ESIC Editorial, Madrid.

RIVERO TORRE, P. (2009): Análisis de Balances y Estados Complementarios, Pirámide, Madrid.

RIVERO TORRE, P. (2012): Análisis de Balances y Estados Complementarios. Ejercicios Resueltos y Comentados, Pirámide. Madrid.

ROJO RAMÍREZ, A. (2019): Análisis Económico-Financiero de la Empresa. Un Análisis desde los Datos Contables, 2ª Edición, Ibergarceta, Madrid.

Rules and Regulations in English

Spanish General Accounting Plan (Plan General de Contabilidad Español. English Translation), Instituto de Contabilidad y Auditoría de Cuentas, Madrid, http://www.icac.meh.es.

Rules and Regulations in Spanish

Real Decreto 1514/2007, de 16 de noviembre, por el que se aprueba el Plan General de Contabilidad (BOE de 20 de noviembre).

Real Decreto 1515/2007, de 16 de noviembre, por el que se aprueba el Plan General de Contabilidad de Pequeñas y Medianas Empresas y los criterios contables específicos para microempresas (BOE de 21 de noviembre).

Real Decreto 602/2016, de 2 de diciembre, por el que se modifican el Plan General de Contabilidad aprobado por el Real Decreto 1514/2007, de 16 de noviembre; el Plan General de Contabilidad de Pequeñas y Medianas Empresas aprobado por el Real Decreto 1515/2007, de 16 de noviembre; las Normas para la Formulación de Cuentas Anuales Consolidadas aprobadas por el Real Decreto 1159/2010, de 17 de septiembre; y las Normas de Adaptación del Plan General de Contabilidad a las entidades sin fines lucrativos aprobadas por el Real Decreto 1491/2011, de 24 de octubre (BOE de 17 de diciembre).

Ley 11/2018, de 28 de diciembre, por la que se modifica el Código de Comercio, el texto refundido de la Ley de Sociedades de Capital aprobado por el Real Decreto Legislativo 1/2010, de 2 de julio, y la Ley 22/2015, de 20 de julio, de Auditoría de Cuentas, en materia de información no financiera y diversidad (BOE de 29 de diciembre).

Resolución de 5 de marzo de 2019, del Instituto de Contabilidad y Auditoría de Cuentas, por la que se desarrollan los criterios de presentación de los instrumentos financieros y otros aspectos contables relacionados con la regulación mercantil de las sociedades de capital (BOE de 11 de marzo).

Real Decreto 1/2021, de 12 de enero, por el que se modifican el Plan General de Contabilidad aprobado por el Real Decreto 1514/2007, de 16 de noviembre; el Plan General de Contabilidad de Pequeñas y Medianas Empresas aprobado por el Real Decreto 1515/2007, de 16 de noviembre; las Normas para la Formulación de Cuentas Anuales Consolidadas aprobadas por el Real Decreto 1159/2010, de 17 de septiembre; y las normas de adaptación del Plan General de Contabilidad a las entidades sin fines lucrativos aprobadas por el Real Decreto 1491/2011, de 24 de octubre  (BOE de 30 de enero de 2021).

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