BMAN71132 FINANCIAL STATEMENT ANALYSIS 2022

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BMAN71132

FINANCIAL STATEMENT ANALYSIS

25th May 2022

Answer only TWO questions

All questions are worth EQUAL marks

1. Financial statement information can be used to formulate security trading strategies. Discuss the rationale and evidence associated with the empirical studies that examine this issue. (50 marks)

2. Discuss what you know about the residual income valuation model and the abnormal earnings growth model. In particular, (i) what are their strengths and weaknesses, and (ii) what do empirical studies tell us about their performance? (50 marks)

3. Financial statement information can be employed to (i) detect earnings management and (ii) measure earnings quality. Discuss the rationale and evidence associated with the empirical researches that assess these issues. (50 marks)

4. Discuss what you know about the use of financial statement information to forecast earnings performance. In particular, what are the rationale and evidence associated with the accounting researches that evaluate this issue? (50 marks)