Course Details in 2022/23 Session
|Module Title ||LM Financial Statement Analysis and Business Valuation|
|School||Birmingham Business School|
|Department || Finance|
|Module Code || 07 36334 |
|Module Lead ||Dr. Chun Yu Mak|
|Level || Masters Level |
|Credits || 20 |
|Semester|| Semester 1|
|Restrictions || None |
Guided independent study-160 hours
Total: 200 hours
|Exclusions || |
|Description || This module introduces fundamental analysis that is an economic framework for business analysis and business valuation based on accounting information. The main focus is on (i) understanding the concepts and usage of financial information; (ii) critical analysis of financial information with referring to the strategic position of an enterprise, profitability drivers and the capital structure; (iii) forecasts for financial performance and position; (vi) application of valuation techniques for assets and securities. Students are encouraged to analyse the quality of accounting information and to explore empirical studies concerned with the value relevance of accounting information by using real data from financial reports and electronic databases like Datastream, Compustat and CRSP among others. Via these practices, students are expected to be able to evaluate the functionality of corporate financial management of an enterprise and maintain a balanced capital structure for supporting the enterprise’s operation. In alignment with technical analysis skills offered by another module on the programme, this module equips students with key business analysis and valuation techniques commonly applied in an enterprise and consulting services. Throughout, this course also spends a reasonable amount of time on the role of theories and industry practices introduces, in promoting ethical and sustainable businesses practices. |
|Learning Outcomes || By the end of the module students should be able to:|
- Explain the accounting framework, the conceptual basis of financial reporting and financial statements;
- Explain how assets, liability and earnings numbers may be affected by accounting policy choice, earnings management, creative accounting and international differences in accounting practices.
- Perform strategy analysis to identify the firm's profit drivers and key risks, and sources of finance by calculating suitable financial ratios using published accounting data from annual reports and financial databases like Datastream, Compustat, Bloomberg etc.
- Apply forecasting techniques to business and understand the foundation of relative valuation methods such as accruals-based and cash flow-based models, P/E and book to market ratios etc.
- Evaluate the capital structure and liquidity risk of a company and
- Critically analyse a company’s financial statement(s) from a valuation perspective.
36334-01 : Credit Research Report : Coursework (50%)
36334-02 : Equity Research Report : Coursework (50%)
|Assessment Methods & Exceptions || Main & reassessment: 2,000 word report (50%) & 2,000 word individual assignment (50%).|
Students who fail the module resit the failed component(s) only.
|Other || |