GBUS 8410 FINANCIAL STATEMENT ANALYSIS AND CORPORATE VALUATION

 

 

This course uses reported accounting data that provides a foundation for the application of tools and techniques to derive the measurements that aid in corporate valuation. Students will develop an understanding of screening, forecasting, and valuation tools that aid in the analysis and exploitation of information contained in financial statements. The course includes but is not limited to topics related to the use of ratio analysis, the theory and development of cash-flow and earnings-based valuation models, identification of financial statement management, and the impact of accounting principles and assumptions on valuation. Course content will encompass three modules. The first strengthens students’ understanding of key accounting relations and how detailed ratio analysis can provide a historical perspective on firm activities. An emphasis also is placed on the role of nonfinancial information used as supplements to required accounting reports. The second builds on this foundation with an explicit focus on common valuation and earnings-forecasting techniques that include financial model building using discounted cash flow, multiples, and earnings-based valuation methods. The final module identifies the critical accounting factors that may be unique to the given firm under evaluation. These factors will include identification of and adjustment for off-balance sheet assets and liabilities, multi-national operations, and detecting earnings management. This course should appeal to those planning careers in financial management, consulting, security analysis, investment banking, or credit analysis.

 

Academic course objectives:

 

·         Develop students’ understanding of accounting from an external perspective

·         Provide a capstone integration of topics studied in Valuation in Financial Markets and First and Second Year Accounting electives by emphasizing issues related to the uses of accounting information in valuation contexts

·         Introduce students to financial-statement-forecasting techniques by focusing on earnings forecasts, including assessing firms’ earnings quality and detecting earnings management

 

Elements of the course grade:

 

Class contribution       40%

Final examination        35%

Group paper/project    25%