Fundamentals of Financial Analysis teaches cadets: 1) the principles of financial statements from the perspective of a user of financial statements (as opposed to a preparer of financial statements); 2) the tools of understanding financial statements including ratio analysis, competitive analysis and economic analysis; and 3) how to apply the fundamentals of these analyses in a wide range of complex, real-world business cases to properly price value and risk. To accomplish this, cadets first learn how to analyze a company by exploring the principles of financial reporting and its complexities in order to be able to assess a company's measurement of its performance and financial position. Cadets then learn how to analyze an industry including capital structure, performance ratios, competitive analysis frameworks, and evaluation of business models and corporate strategy in an underlying economic environment. Cadets learn the basics of several valuation methods and understand how to use as many data points as possible, acknowledging their strengths and limitations, to holistically evaluate a firm. This course is the first of a four-course financial economics sequence which culminates with SS463: Investment Theory.
