AC332 Half Unit
Financial Statement Analysis and Valuation
This information is for the 2021/22 session.
Dr Stefano Cascino OLD.3.32
This course is available on the BSc in Accounting and Finance, BSc in Management, BSc in Mathematics, Statistics and Business and Diploma in Accounting and Finance. This course is available with permission as an outside option to students on other programmes where regulations permit and to General Course students.
Available to students on other undergraduate/Diploma programmes with the permission of the Accounting Departmental Tutor.
Students must have completed Elements of Accounting and Finance (AC100) or Elements of Financial Accounting (AC102).
Accounting Theory and Practice (AC200) is recommended to complement either AC100 or AC102, but not required.
Prior knowledge of statistical software packages (e.g., Stata) as well as prior coding (i.e., programming) experience is desirable although not required.
AC332 introduces and develops an economic framework for business analysis and corporate valuation. The main focus is on integrating key concepts of economics, accounting, and finance in order to effectively evaluate the information content of financial reports; develop up-to-date applied knowledge of fundamental valuation techniques; and successfully implement investment strategies.
The aim of the course is to help students to become “sophisticated users” of financial accounting information from a fundamental analysis perspective. The course consists of four integrated parts: (i) strategy analysis; (ii) accounting analysis; (iii) financial analysis; and (iv) forecasting and valuation. Students are expected to develop financial-analysis and valuation-related skills to support the interpretation, evaluation, and use of accounting information from the viewpoint of major users of financial reports (i.e., equity investors, corporate lenders, etc.). Ultimately, students will be able to analyze a wide variety of financial reporting issues and discuss their valuation implications within the context of the relevant academic literature.
As recent trends in big data and predictive analytics are disrupting the way in which equity analysts, portfolio managers, credit-rating agencies, and regulators collect and analyze companies’ financial disclosures, students will also learn how to perform meaningful analyses on real-world data by using spreadsheets (e.g., MS Excel) and/or statistical software packages (e.g. Stata).
33 hours of seminars in the LT.
Teaching is delivered in two one and a half hour sessions each week.
The pedagogical approach in each session is interactive, often involving case study analyses and group discussions. This mode of teaching requires good advance preparation by the students; hence, every student should be ready to contribute to the discussion when called upon. Active participation is expected and encouraged.
The course makes extensive use of real-world case studies. Students are expected to contribute to the case discussions in each session.
There is no required textbook for this course. Illustrative textbooks covering specific parts of the course include:
- Palepu K. G., P. M. Healy, and E. Peek (2019), Business Analysis and Valuation: IFRS Edition (Cengage Learning), 5th edition.
- Penman, S. H. (2013), Financial Statement Analysis and Security Valuation (McGraw-Hill), 5th edition.
Exam (70%, duration: 2 hours, reading time: 15 minutes) in the summer exam period.
Group project (20%) and group presentation (10%).
Assessment consist of three components, two based on group work and the other on individual work:
- Group project (20%) in the Lent Term. The group project involves the preparation of an “analyst report,” for which students are expected to collect and analyze data on publicly listed companies. The project is meant to test: (i) students’ understanding of the core concepts of fundamental analysis and valuation; (ii) students’ ability to collect, manipulate, and analyze (big) data with the aid of spreadsheets (e.g., MS Excel) and/or statistical software packages (e.g. Stata).
- Group presentation (10%) in Lent Term. The group presentation gives students the opportunity to share the findings of their group projects with the rest of their class as if they were presenting the results of their analyses in a formal business environment (e.g., to sell their research to institutional investors).
- Final exam (70%, duration: 2 hours, reading time: 15 minutes) in the summer exam period.
Course selection videos
Some departments have produced short videos to introduce their courses. Please refer to the course selection videos index page for further information.
Important information in response to COVID-19
Please note that during 2021/22 academic year some variation to teaching and learning activities may be required to respond to changes in public health advice and/or to account for the differing needs of students in attendance on campus and those who might be studying online. For example, this may involve changes to the mode of teaching delivery and/or the format or weighting of assessments. Changes will only be made if required and students will be notified about any changes to teaching or assessment plans at the earliest opportunity.
Total students 2020/21: 195
Average class size 2020/21: 65
Capped 2020/21: No
Value: Half Unit
Personal development skills
- Team working
- Problem solving
- Application of information skills
- Application of numeracy skills
- Commercial awareness
- Specialist skills