Financial Reporting and Financial Markets

Course Director: Katerina Hellström

To complete the specialization, ensure you finalize both BE0352 and BE0353. Any completed course from a discontinued specialization will be counted as a course in addition to the degree and can never be counted as an elective course within the degree. This does not apply to exchange students.

For questions email: academic.advisor@hhs.se

This course adopts an external perspective on the firm. Accounting is useful to external users (capital providers, financial analysts) in that it is a well-established language that captures the financial consequences of both strategic and operational business decisions. The course emphasizes the use of financial reports both for forward-looking purposes (forecast function) and for measuring outcome in terms of performance and financial position (feedback function). The contents and the learning objectives are directed towards students’ abilities to perform financial statement analyses and corporate valuations based on an informed use of financial and non-financial information. During the course, students get to construct a financial planning model for a listed company, where knowledge in accounting, financial analysis, and corporate valuation is practically applied. The course proceeds from the accounting and financial management courses given in the mandatory part of the SSE bachelor program.

Contents

The course consists of four modules:

1. Financial planning – cash flows, profits, and balance sheets
   The distinction between cash flows, profits, and balance sheets, introduced in previous accounting courses, is revisited and further developed. Students will construct a computer-based financial planning model for a listed company, where the knowledge of accounting concepts and accounting relationships is practically applied. The financial planning model also includes parts related to financial analysis, corporate valuation and environmental, social and governance (ESG) factors. The links between the business scenario, financial consequences, and valuation techniques are particularly emphasized.
2. Mergers and acquisitions
   This module focuses on evaluating the financial consequences of mergers and acquisitions. What is the impact of a takeover on the acquiring company’s balance sheet and income statement? What is the impact on reported profitability and financial position under different financing and price level conditions?
3. Financial key ratios and accounting issues
   This module deals with how investors and creditors perform financial analyses of a firm based on accounting numbers. Different categories of key ratios are introduced and used for comparative financial analysis. The module also covers an introduction to within and between industry comparisons and financial distress prediction.
4. Corporate valuation and ESG
   This module deals with theory and application issues related to the dividend discount model, the residual income valuation model and the use of multiples. The module also covers emergent topics in ESG that are relevant for valuation purposes. The strong link between financial and non-financial information and corporate valuation is emphasized and explored from a practice-oriented perspective.

Course activities and pedagogy

The course is organized around a series of lectures and seminars and a computer-based project. Lectures and regular seminars are not compulsory to attend, whereas the project is compulsory and part of the examination.

The different subjects of the course will be introduced during the lectures, where key concepts, theory, and examples are presented to convey critical lines of thought. The lectures will also emphasize links to the course literature.

The lectures are followed by seminars, where students get the opportunity to practically apply analytical concepts and theory and to discuss analytical and practical issues in smaller groups. These seminars are voluntary, but students who want to attend are required to solve a preparation assignment. The first purpose of these assignments is to bring students to a common, higher-level starting point so that time can be efficiently used. This should also make the seminars more meaningful to each student. The second purpose is to stimulate students to study (reading the literature etc.) throughout the whole course period.

The computer-based project will be introduced during a lecture at the beginning of the course. Each group will be required to:

• Build a financial planning model that fulfills certain criteria that will be specified at the beginning of the course.
• Defend their model at a project seminar towards the end of the course and to critically evaluate another group’s model and present conclusions of this evaluation at a project seminar towards the end of course.

Course administrator: jessica.kihlman@hhs.se

After completing the course, the student shall be able to demonstrate their abilities to

1. Prepare, present, and evaluate a computer-based financial planning model for a real company, covering financial statement forecasts (income statements, balance sheets, and cash flow statements), financial key ratio evaluation, corporate valuation calculations and an ESG analysis.
2. Quantitatively and qualitatively evaluate and comment on the impact of mergers and acquisitions on profitability and financial position under different conditions of purchase price, financing, purchased share of the target company and accounting method.
3. Calculate, interpret, and contrast financial key ratios from different stakeholder perspectives.
4. Quantitatively and qualitatively evaluate accounting issues that are particularly relevant in the context of financial analysis, corporate valuation, and credit rating.
5. Conduct corporate valuations based on accounting data by applying residual income valuation and dividend discount valuation techniques, as well as valuation multiples. Evaluate the impact of material ESG issues on corporate valuation.

SSE students: This course can only be taken by students admitted to the specialization in Accounting and Financial Management. To be admitted to the specialization, the student must fulfill the following criteria no later than after the examination period in December/January before the specialization starts.

• Have passed at least 45 ECTS credits out of the mandatory course requirements.
• Have passed the mandatory courses required for the specialization: BE0301 Accounting I and BE0302 Accounting II

Exchange students should have knowledge equivalent to the SSE courses listed above.

• Berk Jonathan and DeMarzo Peter, Corporate Finance, Sixth edition, Global edition. Harlow: Pearson, 2023, ISBN 9781292446318. (course literature in BE0401 Finance I and BE0402 Finance II)
• Johansson Sven-Erik and Runsten Mikael, The Profitability, Financing and Growth of the Firm - Goals, Relationships, and Measurement Methods, 3rd edition, Studentlitteratur, 2023, ISBN 9789144161570. (course literature in BE0302 Accounting II)
• Robinson, Thomas R., Henry, Elaine, and Broihahn, Michael. A., International Financial Statement Analysis, 4th edition, John Wiley & Sons Inc., 2020, ISBN 978-1-119-62805-7. Reading instructions will be provided on Canvas. Please note that an on-line version of this book is available via the SSE library:
• Schuster Walter, Group Accounting-An Analytical Approach, Studentlitteratur, 2017, ISBN 9789144120188. Chapters 1-7, 10. Please note: On some portals where the book is sold it incorrectly says that the language of the book is Swedish. The book Group Accounting ISBN: 9789144120188 is in English.
• Schuster, Walter, Financial Planning in Excel, Studentlitteratur, 2019, ISBN: 9789144127668.
• Skogsvik Kenth, A Tutorial on Residual Income Valuation and Value Added Valuation, pp. 1-14.
• Additional literature will be self-contained in the slide decks (e.g., materials related to ESG, financial distress and industry-based comparison).

The examination is based on the three following items.

1. Written exam (75% of the grading).
2. Project in Excel-based financial planning (25%).

A 100-point scale is used for the course as a whole. The exam comprises 75 points, the project 25 points.

1. Written Exam

The written exam covers ILO 1-5. Students are required to have a minimum grade of "Pass" with regard to this part of the examination. The total grading of the course is made on the basis of the sum of points on the written exam. This part count with 75% for the final grade.

2. Group Project

The project part of the examination covers ILOs number 1-5. Students are required to have a minimum grade of "Pass" with regard to this part of the examination. Students who have done the project in a previous academic year, but not yet passed the written exam, keep their points from the project during the academic year 2025/26. There is no retake opportunity with regard to the project, i.e., the project can only be done once. The project part of the examination includes a mandatory project presentation seminar. The detailed project requirements will be described in the project instructions document which is distributed at the beginning of the course.

Find the course schedule in TimeEdit

Compared to the previous version of the course (BE0352 spring 2026) the course provides a new company for the financial planning project. Further, seminars are not longer mandatory and assignments are not graded.

Have you been granted educational support because of a documented disability? If so, please contact the course director as soon as possible so that adequate accommodations can be made.

Contact specialneeds@hhs.se if you have questions about being granted educational support or need a copy of your educational support certificate.

For more information, visit the Specific Educational Needs page on the Student Hub (login required).