Unit information: Financial Statement Analysis and Valuation in 2015/16

Unit name	Financial Statement Analysis and Valuation
Unit code	ECONM2027
Credit points	15
Level of study	M/7
Teaching block(s)	Teaching Block 2 (weeks 13 - 24)
Unit director	Mr. Thomas
Open unit status	Not open
Pre-requisites	ECONM1007 Finance and Accounting, International Financial Accounting for the MSc in Finance & Investment students OR ECONM2034 Corporate Finance and Financial Statements
Co-requisites	None
School/department	School of Accounting and Finance - Business School
Faculty	Faculty of Social Sciences and Law

Description including Unit Aims

This unit provides frameworks that will help students to interpret information provided in financial statements and understand how businesses and value they generate are reflected and captured in the statements. The unit will cover fundamental analysis developed as a matter of appropriate financial statement analysis. In particular, it will focus on how different accounting information can be converted into valuation, what different accounting measures tell about firm value and how a proper analysis should be developed. Theoretical concepts and principles will be applied in a number of practical exercises. The skills and tools learnt will be those that a security analyst outside the firm may use to advise clients about investing in a firm and also those that a manager within the firm may use to evaluate investments and choose the strategy.

Intended Learning Outcomes

On successful completion of the course, students should be able to:

1. extract relevant information from a firms' financial statements
2. understand and apply the process of fundamental analysis to value a company
3. understand different valuation models and critically assess their applicability, advantages and disadvantages
4. present the analysis in a coherent and concise form, according to the standard and focus required in certain application
5. work with financial data sources

Teaching Information

Lectures; tutorials

Assessment Information

2 hour examination (75%) testing learning outcomes 2, 3 and 4 combined with assessed coursework (25%) testing learning outcomes 1, 2, 4 and 5.

Reading and References

• Palepu, K., P. Healy, V. Bernard and E. Peek (2010) Business Analysis and Valuation: IFRS Edition Text and Cases, Thomson Learning, 2nd Edition

• Penman, S. (2010) Financial Statement Analysis and Security Valuation, McGraw-Hill/Irwin, 4th Edition