The main objective of this course is to provide students with the tools to carry out a business valuation using residual income valuation techniques.
We study the actual financial statements of publicly-traded companies in the assignments that we discuss in class. The course combines accounting principles and investment principles to answer the question: How do I account for value so that I can challenge stock prices with some confidence?
- Introduction to investing and valuation
- Accounting quality analysis
- Reformulation of financial statements
- Valuation using multiples
- Residual income valuation models
- Analysis of risk and return
- Forecasting analysis
- Writing an equity reserach report
Learning outcome knowledge
The student will through the course acquire the necessary knowledge about financial statement analysis and valuation in order to write a credible valuation report based on accounting numbers. This includes profitability, growth, and liquidity analyses, reformulation of annual reports, different valuation methods, and tools to estimate the risk of businesses.
- Written assignment: 30%
- Written exam: 70%