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MN50440: Financial statement analysis and company valuation

Follow this link for further information on academic years Academic Year: 2017/8
Further information on owning departmentsOwning Department/School: School of Management
Further information on credits Credits: 6      [equivalent to 12 CATS credits]
Further information on notional study hours Notional Study Hours: 120
Further information on unit levels Level: Masters UG & PG (FHEQ level 7)
Further information on teaching periods Period:
Semester 2
Further information on unit assessment Assessment Summary: CW 25%, EX 75%
Further information on unit assessment Assessment Detail:
  • Coursework (CW 25%)
  • Examination (EX 75%)
Further information on supplementary assessment Supplementary Assessment:
Like-for-like reassessment (where allowed by programme regulations)
Further information on requisites Requisites:
Further information on descriptions Description: Aims:
The unit aims to increase students' knowledge of the theory and practice of financial statement analysis and to place it in its broad business, accounting and financial context.

Learning Outcomes:
By the end of this unit, the student should be able to:
* understand the principles and terminologies of financial reporting such as accrual accounting, recognition and matching concepts, income measurement and asset valuation principles, cash flow and ratio analysis,
* understand fundamental concepts in finance such as equity valuation, informational efficiencies and the relation between risk and return,
* appreciate that the quality of financial statements is closely associated with accounting policy choices,
* appreciate the various sources of data that may be useful in analysing the position, performance and future prospects of a firm,
* use communication and information technology in acquiring, analysing and communicating information (including spreadsheets and word processing).

Intellectual Skills
* the facility to apply subject-specific knowledge into a range of complex situations; TFA
* a critical awareness of current issues and frameworks in finance; F
* the ability to acquire and analyse data, information and situations; to evaluate relevance and validity, and to synthesise it in the context of finance problems; FA
* an understanding of appropriate research and methodological techniques that allow detailed investigation of problems and ability to use these skills to produce professional and critical reports. A
Professional Practical Skills
* evaluate the current standing of theories and empirical evidence and suggest improvements to them; TFA
* operate effectively both independently as well as within teams and assume leadership roles where appropriate; FA
* be self-directed and able to act autonomously in planning and implementing. F
Transferable/Key Skills
* ability to conduct in-depth research into finance problems. FA
* the facility to communicate including presenting and marketing themselves and their ideas. FA

1. A Framework for Business Analysis and Valuation Using Financial Statements
* Decision Context of Financial Statement Analysis
* The Role of Financial Statements in Capital Markets
* From Business Activities to Financial Statements
* A Comprehensive Framework for Financial Statement Analysis
2. Business Strategy Analysis
* Industry Analysis
* Competitive Strategy Analysis
* Corporate Strategy Analysis
3. Accounting Analysis
* Noise in Financial Statement Data
* Undertaking Accounting Analysis
* Individual Account Types
4. Financial Analysis
* A Framework for Ratio Analysis
* Cash Flow Analysis
* Operating Management
* Investment Management
* Financial Management
* Cash Flow Analysis
* Prediction of Distress
5. Forecasting
* Comprehensive Financial Statement Forecast
* Earnings Forecasting
* Statistical Models Used in Forecasting
6 Valuation using alternative valuation models
* Discounted Cash Flow Analysis
* Calculation of Future Cash Flows
* Abnormal Earnings Valuation Relation
* Computing a Discount Rate
* Terminal Value Calculation, Other Practical Implementation Issues
7 Abnormal Earnings Valuation and the Ohlson (1995) model
* Ohlson's (1995) Model
* Extensions of Ohlson Models and Value Relevance Studies
* Practical Implications for Valuation
8 Market Anomalies and deviations from fundamentals.
Further information on programme availabilityProgramme availability:

MN50440 is Optional on the following programmes:

School of Management