Course description

Business Analysis and Valuation

Introduction

Business analysis and valuation is an important task for controllers, CFOs, research analysts, investment bankers, corporate finance specialists, mergers and acquisitions analysts, venture capitalists, and individual investors.

In this course, we will acquire the competences to evaluate the financing requirements of firms, and the advantages and disadvantages the alternative sources of finance to meet those requirements. We will also develop the competences required to value possible investment opportunities.

This course is closely related to the Financial Strategy course of the CIMA professional qualification as Chartered Global Management Accounting™.

Course content

  • Strategic Financial and non-financial objectives of different types of organizations.
  • Accounting quality analysis.
  • Accounting quality: adjustments.
  • Financial statement analysis.
  • Reformulation of the financial statements. Calculation of FCFF and FCFE.
  • Payout policy: dividends and alternatives. Implications for shareholder value. MM theory of dividend irrelevancy.
  • Cost of equity, WACC and the required rate of return on operating assets.
  • Capital structure: MM theories with and without tax. Impact of capital structure on the cost of capital.
  • Strategy analysis.
  • Construction of pro-forma statements.
  • Different valuation methods.
  • Mergers and acquisitions.

Learning outcome knowledge

At the end of the course, students will have knowledge about:

  • Strategic financial and non-financial goals of different types of organizations.
  • Payout policy and different theories of capital structure.
  • Accounting quality analysis and reformulation of financial statements.
  • Strategy analysis and construction of pro-forma statements.
  • Cost of capital estimation.
  • Different valuation methods and tools for assessing their accuracy..
  • Value creation in a merger and acquisition context.

Exam organisation

  • Presentation and discussion: 30%
  • Written exam: 70%