Financial Performance Analysis

Accounting and Financial Analysis

English for understanding and reading scientific articles

The teaching of the curricular unit is based on recent research materials and on experience gained through practice. The pedagogy of the course is strongly interactive. It seeks substantial student participation and know-how-based learning. Teaching methods include group discussion of real cases and the elaboration of a practical work. Emphasis is placed on helping students relate concepts, ideas and theories to practical, business reality.

The main objective of this course is to provide students with a set of instruments and methods that allow them to make diagnoses about a company’s financial situation, about financial performance indicators, as well as make predictions about its future performance. Specifically, it is intended that the student is able to carry out an assessment or study of the feasibility, stability and operability of a business or project.

After successfully completing this course, the student should be able to:

-Identify the sources of information necessary to prepare a financial report and financial performance of a company.

-To be equipped with the most important methods and techniques, as if he were a financial controller financial / CFO to draw his conclusions regarding the economic and financial situation of a company and thus know how to evaluate the company and the business.

I- Introduction

1. Basic concepts

2. Financial Equilibrium

3. Economic and financial indicators

4. Economic and financial risk

5. Scoring models

II- Capital Structure of firms

1. CAPM and estimation cost of capital

2. Capital structure theories

3. Optimal capital strucuture

3. Costs and Benefits of debt

III- Business valuation

1. Valuation methods

2. Comparable company analysis

3. DCF analysis

4. Real options

IV- Strategy, Corporate Restructuring and Value

1. M&A strategic rationality

2. The synergies and the value creation

3. The development of an acquisition process

4. The restructurings

NAO

1-Main bibliography

Neves, J. C., (2012) Análise e Relato Financeiro – Uma Visão Integrada de Gestão, Texto Editores.

Neves, J. C., (2002) Avaliação de empresas e negócios  – Mc Graw Hill.

2-Complementary bibliography

Brealey, R.; Mayers, S., and Allen, F. (2017). ISE Principles of Corporate Finance, McGraw-Hill.

Copeland, T. E., Weston, J. F., and Shastri, K. (2004). Financial Theory and Corporate Policy. 4th edition, Addison-Wesley.

Damodaran, A. (2012), Investment Valuation: Tools and Techniques for Determining the Value of Any Asset, Wiley Finance.

Fernandes, Carla, Cristina Peguinho, Elisabete Vieira, Joaquim Neiva, (2016) Análise Financeira – Teoria e Prática – Aplicação no âmbito do SNC, Edições Silabo (4ed)

Ferreira, M.; A. Mota e J. P. Nunes (2006), Finanças Empresariais: Teoria e Prática, Publisher Team.

Koller, T., Goedhart, M., and Wessels, D. (2005), Valuation: Measuring and Managing the Value of Companies, 4th edition, John Wiley & Sons.

Lando, D. (2004), Credit Risk Modeling: Theory and Applications, Princeton University Press.

Mascareñas, J. (2005), “Fusiones y Adquisiones de Empresas”, 4ªed., McGraw-Hill

Mota, G. A., Barroso C., Nunes J., Ferreira M. (2012): Finanças da Empresa- Teoria e Prática, Edições Sílabo

Neves, J. C. (2011), Avaliação e Gestão da Performance Estratégica da Empresa, Texto Editores.

Penman, S. H. (2013), Financial Statement Analysis and Security Valuation, 5.ª edição, McGraw-Hill.

Richard A. Brealey, Myers, Marcus (2015), Fundamentals of Corporate Finance, McGraw-Hill Education, 8ª edição

Robert, H. (2018). Analysis for Financial Management. 12th Edition, Macgraw-Hill.

Rosenbaum, J. e Pearl, J. (2009), “Investment banking: valuation, leveraged buyouts, and mergers & acquisitions “, John Wiley & Sons, Inc.

Ross, S.; R. Westerfield e J. Jaffe, (2018), Corporate Finance, McGraw Hill,12ª edição.

Schoenmaker, D. e Schramade, W. (2019). Principles of Sustainable Finance, Oxford, United Kingdom.

Weston, J. F., Mitchell, M. e Mulherin, J.(2013), ”Takeovers, Restructuring, and Corporate Governance”, 4ª ed., Pearson.

Xiao-Jun Zhang Peter D. Easton Mary Lea McAnally Gregory A. Sommers (2014). Financial Statement Analysis and Valuation Hardcover

3-Scientific articles

Asness, C., Frazzini, A., Israel, R., Moskowitz, T. J., & Pedersen, L. H. (2018). Size matters, if you control your junk. Journal of Financial Economics, 129(3), 479-509.

https://www.sciencedirect.com/science/article/pii/S0304405X18301326

Broadstock, D. C., Chan, K., Cheng, L. T., & Wang, X. (2021). The role of ESG performance during times of financial crisis: Evidence from COVID-19 in China. Finance research letters, 38, 101716.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3627439

Cancela, B., Neves, M.E., Rodrigues, L.L., & Dias, A. (2020). The influence of Corporate Governance on Corporate Sustainability: new evidence using panel data in the Iberian macroeconomic environment. International Journal of Accounting and Information Management, 28 (4), pp. 785-806. https://doi.org/10.1108/IJAIM-05-2020-0068

Damodaran, A. (2005), “The value of synergy”, working paper, New York University – Department of Finance.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=841486

Hernández, J. P. S. I., Yañez-Araque, B., & Moreno-García, J. (2020). Moderating effect of firm size on the influence of corporate social responsibility in the economic performance of micro-, small-and medium-sized enterprises. Technological Forecasting and Social Change, 151, 119774.

https://ideas.repec.org/a/eee/tefoso/v151y2020ics0040162519310777.html

Neves, M. E., Serrasqueiro, Z., Dias, A. and Hermano, C. (2020), Capital structure decisions in a period of economic intervention: Empirical evidence of Portuguese companies with panel data, International Journal of Accounting & Information Management, Vol. 28 No. 3, pp. 465-495,

https://doi.org/10.1108/IJAIM-08- 2019-0094

Neves, M.E., do Castelo Gouveia, M., Proença, C. (2020). European Bank´s Performance and Efficiency. Journal of Risk and Financial Management, 13(4), 67.

https://doi.org/10.3390/jrfm13040067

Rashid, A. (2020). Corporate social responsibility reporting: meeting stakeholders expectations or efficient allocation of resources?. International Journal of Accounting & Information Management.

https://www.emerald.com/insight/content/doi/10.1108/IJAIM-09-2020-0150/full/html

Vieira, E. S., Neves, M. E., & Dias, A. G. (2019). Determinants of Portuguese firms’ financial performance: panel data evidence. International Journal of Productivity and Performance Management 68 (7), 1323-1342

Determinants of Portuguese firms’ financial performance: panel data evidence | Emerald Insight

Williams, E. E., & Dobelman, J. A. (2017). Financial statement analysis. World Scientific Book Chapters, 109- 169.

https://www.worldscientific.com/doi/abs/10.1142/9789813224261_0004