Page 43 - Business Studies 11-12 (2006)

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THE ONTARIO CURRICULUM, GRADES 11 AND 12: BUSINESS STUDIES
Financial Analysis and Decision Making
Overall Expectations
By the end of this course, students will:
• compare methods of financing;
• explain and interpret a corporation’s annual report;
• use financial analysis techniques to analyse accounting data for decision-making purposes.
Specific Expectations
Methods of Financing
By the end of this course, students will:
– explain the characteristics of debt financ- ing (e.g., bonds, notes payable, loans) and equity financing (e.g., sale of common or preferred shares) as methods of financing;
– compare the advantages and disadvantages of debt financing and equity financing;
– describe alternative sources of funding available to businesses (e.g., venture capital, government loans and grants).
Annual Reports
By the end of this course, students will:
– describe the purpose of each section com- mon to a corporation’s annual report;
– contrast the annual reports of comparable publicly traded corporations (e.g., of simi- lar size, in the same industry, Canadian ver- sus international);
– assess the current and projected financial strength of a corporation based on an analysis of its annual report.
Financial Analysis for Decision Making
By the end of this course, students will:
– evaluate the role and impact of accounting information in decision making;
– analyse the financial status of a company (e.g., liquidity, solvency, profitability) by using horizontal and vertical analysis;
– analyse the financial status of a company, using financial ratios (e.g., turnover ratios, book value, earnings per share, times inter- est earned, return on assets);
– prepare and analyse cash flow statements (i.e., statements of changes in financial position);
– use information technology to conduct financial analysis.