All class emails are sent to the email address per the NYU Brightspace roster. The Almaris system (if used for your class) also uses the same email. NYU Brightspace lists email for some of you and email for others. I don’t control these matters, nor can I change them. Please contact NYU IT (212-998-3333) or NYU Stern IT (212-998-0180) to learn how to read/forward/check spam for as well as accounts. Contact them for all ZOOM/email/NYU Brightspace/Admin/CapitalIQ issues. If NYU/Stern support cannot help you, please escalate these matters to Student Affairs/Dean's office without involving me. I will not respond to support requests. Almaris support cannot change emails. You can do so by clicking on the link "Change email" on their main login page.


This course helps you understand the flow of money in a business and its link to shareholder value and credit ratings. The course presents a framework for analysis and provides spreadsheets to implement the framework.


Help and Office



Exams and Grading


Class Topic
  • The purpose of financial statement analysis: Valuation, credit risk assessment, and performance evaluation
  • Introduction to deriving unlevered free cash flows
  • Unlevered net income or net operating profit after tax
  • Unlevered net assets or net operating assets
  • Deriving unlevered net income
  • Distinguishing between operating and financial items
  • Drivers of unlevered net income: Size, growth, and NOPAT margin
  • Deriving net operating assets
  • Financial assets versus non-financial assets
  • Financial liabilities versus non-financial liabilities
  • Drivers of net operating assets: Revenue-related metrics
  • Days of receivables, bad debts, days of deferred revenues
  • Drivers of net operating assets: Expense-related metrics
  • Days of prepayments, days of inventories, PP&E turnover, days of payable
  • Distinguishing between operating working capital and fixed capital
  • Fixed versus variable items
  • Seasonal versus cyclical items
  • Financial assets and financial liabilities
  • Distinguishing between solvency and liquidity
  • Leverage and liquidity ratios
  • Leverage: Debt/EBITDA, Debt/EBIT, Debt/FFO,
  • Liquidity: Financial assets/Sales, (Financial assets + Undrawn revolver)/Sales
  • Effect of leverage and liquidity: ROIC versus ROE
  • How leverage amplifies changes in ROE vis-a-vis changes in ROIC
  • How liquidity dampens changes in ROE vis-a-vis changes in ROIC