IB396-15 Financial Statement Analysis and Security Valuation
Introductory description
N/A.
Module aims
The main objective of the module is to provide students with the tools to analyse firm financial performance from an equity valuation perspective and to carry out a business valuation building on this analysis. A further objective is to encourage students to use the valuation-based framework to analyse the ‘quality’ of accounting information and to explore empirical studies concerned with testing the value-relevance of financial statement information.
Outline syllabus
This is an indicative module outline only to give an indication of the sort of topics that may be covered. Actual sessions held may differ.
- Accounting and cash flow valuation model.
- Financial analysts’ use of financial statements: practice and evidence.
- Reformulation of financial statements and value-based ratio analysis.
- Implementation of accounting valuation models.
- Accounting quality and the value relevance of accounting information.
Learning outcomes
By the end of the module, students should be able to:
- Understand and apply business valuation models that use accounting numbers.
- Gain an understanding of the importance of ratio analysis to investors and analysts and learn how to apply a value based approach to ratio analysis.
- Develop the ability to prepare a thorough valuation analysis including sensitivity analysis on the key assumptions.
- Understand the factors determining quality of accounting information from an investor perspective and gain a basic understanding of empirical research on value relevance.
- Develop ability to apply and integrate concepts from accounting and finance to the analysis of business plans and company valuation.
Indicative reading list
Penman, S, Financial Statement Analysis and Security Valuation, McGraw Hill, 3rd edition, 2007.
Selected articles from Blackwell Encyclopedia of Management, 2nd edition, 2005, Cary L Cooper and Chris Argyris (eds.), Accounting Volume, Colin Clubb (ed.).
Selected journal articles from Accounting Horizons, Review of Accounting Studies, Journal of Accounting Research.
Subject specific skills
Develop an understanding of how financial statements analysis can be linked to fundamental analysis.
Transferable skills
Demonstrate oral and written communication skills in relation to the analysis of company financial statement information from a valuation perspective.
Develop and apply modelling and spreadsheet skills to the solution of performance analysis and valuation problems.
Study time
| Type | Required |
|---|---|
| Lectures | 8 sessions of 2 hours (11%) |
| Seminars | 8 sessions of 1 hour (5%) |
| Private study | 50 hours (33%) |
| Assessment | 76 hours (51%) |
| Total | 150 hours |
Private study description
Private Study.
Costs
No further costs have been identified for this module.
You do not need to pass all assessment components to pass the module.
Assessment group D1
| Weighting | Study time | Eligible for self-certification | |
|---|---|---|---|
Assessment component |
|||
| Individual Assignment (15 CATS) | 20% | 15 hours | Yes (extension) |
Reassessment component is the same |
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Assessment component |
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| Online Examination | 80% | 61 hours | No |
|
Exam ~Platforms - AEP |
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Reassessment component is the same |
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Feedback on assessment
Feedback via my.wbs.
Pre-requisites
To take this module, you must have passed:
Courses
This module is Core optional for:
- Year 4 of UGEA-RN21 Undergraduate German and Business Studies
This module is Optional for:
- Year 1 of UIOA-VEU Undergraduate EU Visiting
-
UECA-3 Undergraduate Economics 3 Year Variants
- Year 3 of L100 Economics
- Year 3 of L100 Economics
- Year 3 of L100 Economics
- Year 3 of L116 Economics and Industrial Organization
- Year 3 of L116 Economics and Industrial Organization
- Year 3 of L116 Economics and Industrial Organization
-
UIOA-VOS Undergraduate Overseas Visiting
- Year 1 of UVOS Undergraduate Overseas Visiting
- Year 1 of UVOS Undergraduate Overseas Visiting