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This subject provides the capstone course in business financial analysis and firm valutaion. The subject will include a detailed analysis of a firm's business strategy, financial statements and additional disclosures to assess the quality, profitability, risk, future prospects and value of the firm.
Intended learning outcomes
- Compare different accounting methods used in financial statements for valuation purposes.
- Assess the quality of financial information and make adjustments if necessary.
- Analyse financial statements to obtain the relevant information (profitability, risk, and growth potential) for valuing equities.
- Explain business activities that determine value, identify “value created for shareholders”.
- Develop skills to build forecasts of a firm’s future financial performance.
- Analyse how fundamental values (or “intrinsic values”) are estimated
- Synthesise, evaluate, and compare the dividend discount model, the discounted cash flow model, and the residual income model in valuing equities
- Investigate the difference between fundamental, market and book values
High level of development: team work; application of theory to practice; interpretation and analysis; synthesis of data and other information; evaluation of data and other information; accessing data and other information from a range of sources.
Moderate level of development: collaborative learning; written communication; critical thinking; use of computer software; receptiveness to alternative ideas.
Some level of development: oral communication; statistical reasoning.
Last updated: 2 December 2019