Financial Statements: How to Prepare and How to Analyze (1.5 ECTS)

Are you studying business, or planning to study business soon? Clear understanding of basic accounting is very important for you to understand Finance and other related courses. Are you planning to open a business of your own? Then you definitely need to know how to prepare financial statements and how to analyze those statements for decision making.

This course has three objectives: (a) how to prepare financial statements: Income Statement, Balance Sheet, and Cash Flow Statement; (b) how to analyze financial statements.

Under (a) we will learn basic accounting principles and book-keeping techniques to prepare financial statements. Under (b) we will analyze the statements to learn how to look at the numbers from owners’, managers’, or creditors’ points of view. We will perform comparative analysis between firms using liquidity, efficiency, profitability, and leverage ratios. We will also learn how to use the DuPont Analytical techniques in analyzing a firm’s financial statement. We will use real world problems/statements.

Who should attend:

  • Current and prospective students in business
  • Existing and prospective small business/entrepreneurs
  • Who studied accounting before but things are not clear yet

Teaching method:

We will follow problem based learning (PBL) to make sessions interesting and enjoyable. That means, we will deal with problems and learn by solving those in class or in groups.

Expected achievements:

After completing the course you should be able to:

  1. Record transactions in Journals, transfer transactions in General Ledgers, prepare Trial Balance, and complete Financial Statements
  2. Analyze the financial statements to see the company’s strengths and weaknesses.
  3. Perform DuPont Analysis to see the situation of a firm from different perspectives

 Planned sessions:

Day one: Accounting: Principles and Procedures

  1. Forms of Business Organization: sole proprietorship, partnership, limited company and corporations
  2. Basic Accounting Equation
  3. Recording transactions following double entry system
  4. Preparing Trial Balance
  5. Rigorous practice (individual and groups)

Day two: Preparing Income Statement and Balance Sheet

  1. What is and how to record Adjusting Entries
  2. Preparing Income Statement
  3. Preparing Balance Sheet
  4. Rigorous practice (individual and groups)

Day three: Financial Statement Analysis: Basics

  1. Preparing Cash Flow Statement
  2. Rigorous practice (Group work with practical problems)
  3. Mini-test to test the progress
  4. Review of mini-test questions

Day four: Financial Statement Analysis I

  1. Preparation of Common-sized Statement
  2. Perform liquidity, profitability, efficiency, leverage ratios

Day five: How Accounting is done in practice using Accounting Software

  1. Introduction of DuPont Analysis (Group work with practical problems)
  2. Practice, practice, and practice with different real world financial statements.
  3. Demonstration: How Accounting is done with an Accounting Software.
  4. Course evaluation

Text: Weygandt, Kimmel and Kieso (2013) Financial Accounting IFRS Ed. Wiley.

 Instructor: Dr. Golam Robbani (mdgolamr@yahoo.com); The Hague University of Applied Sciences, The Netherlands

Who is Dr. Golam Robbani

Dr. Robbani is the Coordinator of this Summer School. Currently he is teaching at the Hague University of Applied Sciences. He is the module coordinator of Financial Management and Corporate Finance. Formerly he was an Associate Professor of Finance and Banking at the University Rajshahi. Previously he taught at Maastricht University (2008-2014) Netherlands; Also taught short courses in Suriname, UK (Liverpool University-online) and Germany.

Dr. Robbani earned his PhD in Applied Economics from the University of Antwerp (Belgium); did MBA from AIM (Philippines); and completed Masters in International Law and Economics from World Trade Institute (Switzerland). Currently he is living in The Hague.

Dr. Robbani worked with United Nations University center for Comparative Regional Integration Studies (UNU-CRIS) for his PhD. He is an “Excellent Tutor” recognized several times by Maastricht University for his excellent teaching quality.