Financial Analysis and Valuation

 

Instructor:

Tatiana A. Garanina, Associate Professor, Department of Finance and Accounting, Graduate School of Management, St.Petersburg University

garanina@gsom.pu.ru

Workload:

6 ECTS,

45 contact hours

Prerequisites:

Financial Accounting

Course Description:

The goal of the course is to make students familiar with different techniques of financial analysis, forecasting and corporate valuation techniques and to show how these techniques could be used in managing of a company. The knowledge of these fields is crucial for achieving proper understanding in international business and financial communications. The results of different dimensions of financial analysis of financial statements lie in the heart of most of managerial decisions. Forecasting introduces the final phase of the use and analysis of financial statements: forecasts of the additional variables required for decision making. The study of forecasting is primarily concerned with the rationale for the analytic techniques used rather than the mechanics of forecasting, which is left to technical statistics and econometrics texts.

After the course students should have:

  • general understanding of financial analysis and forecasting
  • skills in analysis of financial statements and use of the results of analysis in financial and investment decision making
  • understanding the main valuation models based on discounted cash flows and residual income techniques
  • knowledge of the main forecasting techniques
  • ability to define key value drivers and their links with creating shareholders value

Course Content:

PART 1. FINANCIAL STATEMENT ANALYSIS
Topic 1. Introduction to Financial Analysis and Forecasting and the Main Methods of Financial Analysis (6 hours)
Topic 2. Analysis of the Balance Sheet (6 hours)
Topic 3. Analysis of the Income Statement and Cash Flow Statement (4 hours)
Topic 4. Analysis of Profitability and Financial Leverage (6 hours)

 

PART 2. CORE VALUATION TECHNIQUES
Topic 5. Valuation Techniques: Method of Comparables and Asset-Based Valuation (6 hours)
Topic 6. Valuation Techniques: Income-based methods (8 hours)

 

PART 3. ANALYTICAL TOOLS FOR VALUATION AND FORECASTING
Topic 7. Analysis of Value Drivers: Analysis of Growth (4 hours)
Topic 8. Enterprise Valuation and Estimating the Cost of Capital (2 hours)
Topic 9. Forecasting and Valuation Analysis (3 hours)

Course Organization:

Lectures, seminars, practicum, project, group work, exercises, home and class assignments.
Maximum number of students per group: 35

Course Reading (the full list):

Core:

  • Penman S. Financial Statement Analysis and Security Valuation. 2nd int.ed. McGraw Hill, 2012.

Optional:

  • Subramanyam K.R., Wild J.J. Financial Statement Analysis. 10th Int.ed. McGraw-Hill, 2009.
  • Koller T., Goedhart M., Wessels D. Valuation: Measuring and Managing the Value of Companies. 4th ed. John Wiley & Sons, Inc. 2005.

Exam format:

Final evaluation is exercised by written open-book exam. Exam test consists of open questions and exercises on different topics devoted to financial analysis and valuation. Books may be open during the exam. For calculations only calculator may be used, computers and other mobile devices are prohibited.
In-Class, 90 min.

Grading Policy:

Group Project            16% (2% for each part of the project)
Mid-term test            14%
In-class assignments   10%
Final Exam               60%
Total:                     100%

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