SECTION 130.189. Financial Analysis (One Credit), Adopted 2015

(a) General requirements. This course is recommended for students in Grades 11 and 12. Prerequisite: Accounting I. Students shall be awarded one credit for successful completion of this course.

(b) Introduction.

(1) Career and technical education instruction provides content aligned with challenging academic standards and relevant technical knowledge and skills for students to further their education and succeed in current or emerging professions.

(2) The Finance Career Cluster focuses on planning, services for financial and investment planning, banking, insurance, and business financial management.

(3) In Financial Analysis, students will apply knowledge and technical skills in the economic, financial, technological, international, social, and ethical aspects of business to become competent consumers, employees, and entrepreneurs. Students will develop analytical skills by actively evaluating financial results of multiple businesses, interpreting results for stakeholders, and presenting strategic recommendations for performance improvement.

(4) Students are encouraged to participate in extended learning experiences such as career and technical student organizations and other leadership or extracurricular organizations.

(5) Statements that contain the word "including" reference content that must be mastered, while those containing the phrase "such as" are intended as possible illustrative examples.

(c) Knowledge and skills.

(1) The student demonstrates professional standards/employability skills as required by business and industry. The student is expected to:

(A) demonstrate effective oral and written communication skills;

(B) perform numerical and arithmetic applications;

(C) demonstrate an understanding of integrity and strong work ethic;

(D) demonstrate attention to detail in completed assignments; and

(E) demonstrate effective problem solving.

(2) The student analyzes accounting systems to examine their contribution to the fiscal stability of businesses. The student is expected to:

(A) describe the nature and scope of accounting; and

(B) examine accounting procedures for tracking money flow and determining financial status through the preparation of financial statements.

(3) The student explores the use of financial resources. The student is expected to describe tools, strategies, and systems used to maintain, monitor, control, and plan the use of financial resources.

(4) The student demonstrates mathematics knowledge and skills required when interpreting business operation documents. The student is expected to apply data to solve a problem; construct charts, tables, and graphs; and analyze data.

(5) The student analyzes financial resources to ensure business solvency. The student is expected to:

(A) describe the nature of budgets;

(B) determine relationships among total revenue, marginal revenue, output, and profit;

(C) calculate financial ratios;

(D) interpret financial statements;

(E) describe types of financial statement analyses such as ratio analysis and trend analysis; and

(F) identify problems and issues with financial statements.

(6) The student calculates business ratios to evaluate company performance. The student is expected to:

(A) discuss the use of financial ratios in business finance;

(B) use multiple ratios to evaluate company performance, including income, profitability, operating performance, liquidity, working capital, bankruptcy prediction, long-term analysis, coverage, debt, cash flow indicator, and investment valuation; and

(C) discuss the use of benchmarks in analyzing ratios.

(7) The student analyzes a financial statement. The student is expected to:

(A) discuss the analysis of a company's financial situation using its financial statements;

(B) describe external forces affecting a company's value;

(C) explain how value is created for a company;

(D) understand and interpret financial statement notes; and

(E) evaluate results from the aspect of management, creditors, and investors.

(8) The student examines the nature and scope of risk management in finance. The student is expected to:

(A) discuss the nature of risk control such as internal and external controls;

(B) explain ways to assess risk;

(C) describe the importance of auditing risk control;

(D) discuss risk-control systems;

(E) describe the use of technology in risk management;

(F) discuss legal considerations affecting risk management;

(G) discuss the relationship between risk and business objectives; and

(H) evaluate a risk-management program.

(9) The student develops an understanding and working knowledge of annual reports. The student is expected to:

(A) discuss the objective of an annual report;

(B) identify the components of an annual report;

(C) identify laws and regulations that are applied to annual reports; and

(D) create an annual report.

(10) The student explores the role of ethics in finance. The student is expected to:

(A) explain the nature of business ethics;

(B) discuss the role of ethics in finance; and

(C) analyze the activities of Enron Corporation that led to the company's downfall.

(11) The student employs critical-thinking skills independently and in teams to solve problems and make decisions. The student is expected to:

(A) identify common tasks that require employees to use problem-solving skills;

(B) analyze elements of a financial problem to develop creative solutions;

(C) create and evaluate ideas, proposals, and solutions to financial problems;

(D) analyze financial information to determine its value to the problem-solving task; and

(E) identify and evaluate alternative financial solutions using a variety of problem-solving and critical-thinking skills.

(12) The student performs a case study analysis of a specific company to apply the concepts learned in the course and present the findings. The student is expected to:

(A) summarize the company's background;

(B) analyze the company's history, development, and growth;

(C) identify the company's strengths and weaknesses, internally;

(D) describe the external environment;

(E) evaluate the strengths, weaknesses, opportunities, and threats (SWOT) analysis;

(F) examine the corporate and business level strategy;

(G) investigate the structure and control systems; and

(H) formulate recommendations.

Source Note: The provisions of this §130.189 adopted to be effective August 28, 2017, 40 TexReg 6601