Course Details in 2024/25 Session

Module Title	LM Financial Statement Analysis and Business Valuation
School	Birmingham Business School
Department	Finance
Module Code	07 36334
Module Lead	Dr. Chun (Mark) Mak
Level	Masters Level
Credits	20
Semester	Semester 1
Pre-requisites
Co-requisites
Restrictions	None
Contact Hours	Lecture-30 hours Seminar-10 hours Guided independent study-160 hours Total: 200 hours
Exclusions
Description	This module introduces fundamental analysis that is an economic framework for business analysis and security valuation based on accounting information. The main focus is on integrating key concepts of economics, accounting and finance in order to effectively evaluate the information content of financial reports, derive forecasts and apply valuation techniques for the purpose of implementing investment strategies and consulting. All lectures are backed by relevant discussion on cutting-edge research in areas of Capital Market-based Accounting Research and Corporate Finance. Additionally, students are encouraged to analyze 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 CRSP, Datastream and ThomsonOne.com among others. Via these practices, students explore how the value of a stock or operating asset in an efficient market reflects investors’ expectations on its future performance. This module also equips students with key security analysis and valuation techniques commonly applied in trading rooms in financial industry. Throughout, this course also spends a reasonable amount of time on the role of theories and industry practices introduced in promoting ethical and sustainable business practices. Some other topics that will be considered in this module include cash flow forecasting using EXCEL, financial modelling, simulation, stress testing in simulated scenarios, using EXCEL.
Learning Outcomes	By the end of the module students should be able to: appraise the accounting framework, the conceptual basis of financial reporting and non-financial disclosure, and financial statements, how the reported values may be affected by accounting policy choice and international differences in accounting practices; analyse companies fundamentals to identify the firms’ profit drivers, their key risks and sources of finance, using financial metrics (ratios and flows) from published accounts; apply different valuation and forecasting techniques to business and compare the foundation of relative valuation models, such as accruals-based and cash- flow-based models, P/E, book to market ratios, etc.; and critically evaluate companies’ capital structures and credit risks.
Assessment	36334-01 : Credit Research Report : Coursework (50%) 36334-02 : Equity Research Report : Coursework (50%)
Assessment Methods & Exceptions	Assessment (a) a 2,000 words individual report (50%); and (b) a 2,000 words individual assignment (50%). Reassessment Students who fail the module will resit the failed component(s) only.
Other
Reading List