Reconstructing financial analysis courses in higher vocational education in China: a factor analysis approach

2.1 A factor analysis approach

Generally, teachers, coursebooks and teaching methods are the basic elements of teaching construction. Now, to train high-quality workers and skilled personnel with knowledge, skills and virtues, a threefold teaching [3] reform is proposed in the Implementation Plan of National Vocational Education Reform. We adopt a factor analysis approach to study the existing problems with traditional financial analysis courses and reconstruct them from three perspectives — coursebooks, teachers, and teaching methods.

An integrated financial statement analysis project requires the quantitative analysis of a real company’s financial statements and preparing a written research report. The project includes supporting activities, such as in-class instruction on financial ratios, a computer lab session on Excel, draft papers, peer reviews of writing, and paper revisions.²³ The content of the coursebooks should, therefore, keep up with the developments and changes in the industry.²⁴ Technology and data analysis skills are also suggested to be integrated into the curriculum to meet the data-driven needs of the accounting profession.²⁵

Teachers can work in enterprises and participate in the identification of the corresponding skill levels required to reconstruct their personal knowledge structure and improve their practical skills.²⁶ To meet the demands of online teaching, teachers also need to develop fluency in digital literacy.⁷ Thus, senior technical and skilled personnel from industry enterprises can be introduced as part-time teachers to enrich and improve the existing teachers’ team.²⁷

We can thus, build a student-centered teaching system, increase the proportion of practical teaching in the system, and adopt a project-based teaching method.²⁸ Other teaching methods, such as heuristics, inquiry, discussion, and participation can be used to strengthen teaching interactions and improve students’ independent learning ability.²⁹

2.2 Data collection

To clarify the current situation of coursebooks, teachers, and teaching methods in financial analysis courses, we adopted a content analysis-based approach. The Ministry of Education of the People’s Republic of China organized 22 open online course platforms to offer online programs. We collected and analyzed the course contents that included financial analysis.

3.1 Data analysis

We found 78 courses that included financial analysis, of which 33 were for vocational college students and 45 were for undergraduate students, the data are shown in Table 1.

We analyzed whether the courses included the following contents, and the data are shown in Table 2.

Online courses employ a uniform teaching method, comprising pre-recorded video lectures, unit tests, and opportunities for teacher-student communication. Offline courses mainly rely on lectures and group discussions.

Owing to the prevalent belief in China that “knowledge is important, skill is not”, more than 70 percent of the full-time teachers in higher vocational colleges hold “only academic degrees”, This is particularly true for young teachers under the age of 30, many of whom lack work experience in enterprises, Even these teachers with enterprise work experience, over two-thirds have less than five years of experience, which is insufficient to meet higher vocational education requirements.³⁰ Consequently, the contents of financial analysis reveal teacher's weaknesses.

3.2 Problems existing in traditional financial analysis courses

3.2.1 The contents in the coursebooks are incomplete and out of date

The current financial analysis framework based on the four abilities in coursebooks is ineffective. It over-emphasizes the indexes and ignores the relationships between financial data and enterprise business; the analysis of operating efficiency remains superficial making it difficult to create value.

Information technology has changed the way enterprises operate and their accounting processes. First, information systems can automatically generate accounting records and statements, which result in great changes to the work done by accounting personnel; as a result, accountants may need to be transformed into analysts. Second, company employees can upload almost all business data online once the business occurs using various information processing systems, such as ERP, CRM and SCM [4]. Thus, the timeliness of accounting has improved drastically, so that the traditional post-analysis of finance can be upgraded to a real-time analysis, which may further improve the quality of the financial analysis. Third, to better analyze business operations through financial data, the analyst needs to understand the company’s strategy and business, as well as the macro environment and industry. Hence, we surmise that the current contents in the coursebooks are incomplete as the following topics can also be included: enterprise strategy, macro-environment analysis, industry analysis, and business analysis.

Data has gradually penetrated into all walks of life leading to the continuous creation of massive data. Data mining, and the application and analysis of data-based decision-making have become the focus of research in various fields, further highlighting the importance of data as a factor of production. The traditional financial analysis framework based on limited information and reliant on human manual analysis can be transformed into a framework based on massive data and information technology. Moreover, generating, recording, and storing massive data lays a foundation for the subsequent in-depth analysis of different needs; the ability to acquire and process data has correspondingly become a critical ability in financial analysis. Thus, we think data analysis technology should become an essential component of the financial analysis course, thus demonstrating that the current content of the coursebooks is out of date.

3.2.2 Teachers lack practical ability and are unaware of data analysis tools

The traditional financial analysis course is taught by teachers with professional foundations in either accounting, financial management, or auditing. Most teachers lack practical abilities as they have not received professional training on financial analysis in universities or enterprises. Also, the lack of enterprise strategy, macro-environment analysis, industry analysis, and business analysis in the coursebooks further reduces the motivation of teachers to improve their practical ability. This disconnection between teachers and practical ability may change financial analysis courses into interpretation and calculation of several indicators; as a result, students may not be able to solve practical problems after taking the course.

The teachers are also unaware of data analysis tools because of their professional background. The era of big data is characterized by large quantities and multiple types of data, high timeliness but low value density; data mining and analysis technologies are, thus needed to improve the value of data. Meanwhile, the topics of enterprise strategy, macro-environment analysis, industry analysis, and business analysis in the coursebooks involve a large amount of external and internal data. Therefore, data analysis capability is an important requirement for a financial analyst.

3.2.3 Teaching methods are inefficient

In traditional financial analysis courses, teachers mainly adopt lecture and case based teaching methods; they often choose several listed companies, explain representative indicators of various abilities and calculation methods, analyze the trend of the enterprise’s financial situation and the change of the indicators combined with comparing them with the indicators of the industry. They finally, briefly describe business changes as reflected by the index changes. The purpose of teaching focuses on the comprehensiveness of analysis and the accuracy of index calculation. Obviously, the current teaching methods are not integrated with practice; thus, a more systematic approach of teaching is required.

4.1 Supplement and improvement of the contents in the coursebooks

We propose that the contents in coursebooks can be supplemented with topics related to enterprise strategy, macro-environment analysis, industry analysis, business analysis, and the application of digital technology tools. Meanwhile, the judgment and reconstruction of enterprise value are the purposes of financial analysis, while analyzing the business from financial data and excavating the core competitiveness of the enterprise are its key contents.

Technical analysis tools can be used to extract and process the relevant data. Since Python is one of the most popular programming languages and is open source, we choose it as the tool for technical analysis; the framework diagram is shown in Figure 1.

Figure 1. Framework of financial analysis course content.

Specifically, we think coursebooks can contain the following contents, as shown in Table 3.

4.2 Improvement of teachers’ practical and technology application abilities

The current status of accounting professional teachers, who lack work experience and abilities related to the application of technology, can be changed in three ways. First, teachers can participate in training programs, including robotic process automation financial robots, Python design and development, and commercial business intelligence, along with those on company strategy, enterprise management, and other latest business management topics. Second, teachers are required to work in specific companies as a financial analyst. The college is therefore responsible for balancing work and teaching to guarantee teachers’ work time in these financial analysis positions; the teachers can then accumulate practical experience and improve their ability to solve practical problems. Moreover, in the face of the status that industry development is ahead of education, teachers going to enterprises can come into contact with and learn about more advanced technologies, systems, and management modes allowing them to update the knowledge they need to meet the needs of leading industries. Third, the college can improve the team structure and overall quality by employing senior financial analysts as part-time teachers; financial analysis experts with rich practical experience can not only combine teaching and application, but can also help other teachers in the team improve their teaching level, thus increasing the teachers’ practical ability.

4.3 Cooperation with enterprises to enrich teaching methods

Effective teaching in higher vocational education requires the combination of theoretical and practical learning. We think colleges and enterprises can cooperate here to improve students’ professional competitiveness. First, taking the work content as a teaching task allows them to establish a dynamic curriculum of the dual subject. In this manner, students are guided to conduct an in-depth analysis of the business activities based on continuous operation data. The students can then use technology-based analysis tools to extract and process data, such as macro data and the data of other companies in the industry, as a basis for analyzing the specific operational situation reflected in the company’s financial data. Thus, they can evaluate the competitiveness, risk areas, and value of the enterprises from the perspective of internal management. They can then make recommendations for business improvement and submit them to the enterprise in the form of a comprehensive financial analysis report, which in turn can help enterprises better manage risks and make operational decisions. Apart from this, teachers will receive the job satisfaction of service enterprises as an important part of students’ performance to improve the rationality of teaching evaluation. Meanwhile, the communication between teachers and enterprises can help continuously optimize the teaching content; the framework for this is shown in Figure 2. Second, colleges and enterprises can co-construct a simulation platform based on the information of listed companies to allow students to exercise and cultivate their analytical abilities from the perspective of external investment analysis. Third, colleges and enterprises can also jointly develop vocational skill grade certificates to not only train students’ vocational ability, but also help set standards in the field of financial analysis.

Figure 2. Teaching mode of financial analysis course.