Skip to main content

Unit information: Financial Statement Analysis and Valuation in 2018/19

Please note: you are viewing unit and programme information for a past academic year. Please see the current academic year for up to date information.

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 Dr. Bence
Open unit status Not open
Pre-requisites

ECONM1007 Finance and Accounting

ECONM0001 Financial Reporting

Co-requisites

None

School/department School of Accounting and Finance
Faculty Faculty of Social Sciences and Law

Description

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) Integrate current theoretical findings to develop a comprehensive overview of the framework of fundamental analysis of companies

2) Develop a working awareness of different valuation theories and critically assess their applicability, advantages and disadvantages in different contexts

3) Apply the process of fundamental analysis to value a company, identifying relevant information from a company’s financial statements to use in the process

4) Identify and select appropriate sources of financial data and manipulate the data into forms that can be used in the forecasting and valuation processes

5) Present the results of analytical techniques studied coherently and concisely in an industry accepted standard format

Teaching details

20 hours of lectures, 5 hours of tutorials, 5 hours of exercise classes

Assessment Details

Assessed group coursework (25% - 4000 words) testing learning outcomes 1,2,3,4 and 5. Students will work in groups of 4-5 students, and a mark is awarded collectively as a group. However, should students indicate that the contribution was uneven then the mark can be adjusted to reflect individual efforts.

There are six questions in this paper:

Answer ONE question from Section A and TWO questions from Section B.

Three questions in all.

The questions in Section A carry 50 marks each and the questions in Section B carry 25 marks each.

Reading and References

Required Reading

Thomas (2014) Financial Statement Analysis, University of Bristol, Cengage

This contains extracts of chapters from two of the textbooks below.

Recommend Reading

Wahlen, Baginski, Bradshaw (2011) Financial Reporting, Financial Statement Analysis & Valuation 7th ed

Palepu, K., P. Healy, V. Bernard and E. Peek (2013) Business Analysis and Valuation: IFRS Edition, Thomson Learning, 3rd Edition

Penman, S. (2013) Financial Statement Analysis and Security Valuation, McGraw-Hill/Irwin, 5th Edition

Feedback