A Financial Statement Analysis Project for Introductory Financial Accounting

5960 words 24 pages
G lobal Perspectives on Accounting Education
Volume 6, 2009, 83-96

A FINANCIAL STATEMENT ANALYSIS
PROJECT FOR INTRODUCTORY
FINANCIAL ACCOUNTING
Marilyn B. Misch
Business Administration Division
Pepperdine University
Malibu, California
USA
Carolyn A. Galantine
Business Administration Division
Pepperdine University
Malibu, California
USA
ABSTRACT
This paper describes a financial statement analysis project useful in both preparerbased and user-based introductory courses in financial accounting. The project requires students to analyze trends in corporate performance, to evaluate corporate financial decisions, to discuss non-financial statement issues that would be important to potential investors, to compare two companies within an industry,
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Thus, the project develops students’ business knowledge by requiring the students to understand the drivers of success in a particular industry and to evaluate a particular company’s performance with regard to key issues.
The project develops students’ technical knowledge by requiring that students accurately report the changes that have taken place in a particular company’s financial accounts, understand the underlying causes of the changes, and understand the relationships among financial statement accounts. The project develops students’ critical reasoning skills by requiring that students identify issues which would be particularly important to investors in the industry, assess company performance in regard to those areas, and make and defend investment recommendations. In addition, the project develops students’ communication skills by requiring students to prepare concise written reports and to make oral presentations detailing and defending their analyses and conclusions. Finally, when used as a group assignment, the project also develops students’ understanding of group dynamics by requiring students to reflect on the group processes followed in completing the assignment.
Classroom Implementation Approaches
Currently, this project is being used by two professors in a preparer-based financial accounting course environment. Both professors introduce the

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