APPLIES TO ACADEMIC YEAR 2016/2017

GRA 6210 Business Analysis and Valuation Using Financial Statements

Responsible for the course
Sverre Dyrnes, Hans Robert Schwencke

Department
Department of Accounting - Auditing and Business Analytics

Term
According to study plan

ECTS Credits
6

Language of instruction
English

Introduction
Development of analyst skills entails understanding the concepts and procedures underlying generally accepted accounting principles used to prepare financial information, and for that reason some time is spent on reinforcing your knowledge of these principles. However, our primary emphasis is on valuations based on this financial information. This course provides both a sound theoretical framework for corporate valuation and a thorough discussion of how valuations are actually done in the real world.
In this course we will present the theory behind the valuation methods. We will also discuss the many different sources from which analysts can obtain information.
Equity analysis is an important task for research analysts, investment bankers, corporate finance specialists, mergers and acquisitions analysts, venture capitalists, and individual investors. Credit analysis is an important task for holders of debt.

Learning outcome
The objective of this course is to help the student develop the skills necessary to do valuations and credit analysis

Prerequisites
GRA 6212 Financial Reporting and Analysis or equivalent
All courses in the Masters programme will assume that students have fulfilled the admission requirements for the programme. In addition, courses in second, third and/or fourth semester can have spesific prerequisites and will assume that students have followed normal study progression. For double degree and exchange students, please note that equivalent courses are accepted.

Compulsory reading
Books:
Penman, Stephen H. 2013. Financial statement analysis and security valuation. 5th ed., International ed. McGraw-Hill

Other:
During the course there may be hand-outs and other material on additional topics relevant for the course and the examination.


Recommended reading
Books:
Koller, Tim, Marc Goedhart, David Wessels. 2015. Valuation : measuring and managing the value of companies. 6th ed. Wiley
Pinto, Jerald E. ... [et al.]. 2015. Equity asset valuation. 3rd ed.. John Wiley & Sons

Course outline
1. Accounting-, Financial-, Credit- Analysis
2. Prospective Analysis
3. Cost of Capital Analysis
4. Valuation using Price Multiples
5. Valuation using DDM and Discounted Cash Flow Models
6. Valuation using Residual Income Valuation Models
7. Valuation and Active Investing
8. Writing a Valuation Report

Computer-based tools
Not applicable

Learning process and workload
A course of 6 ECTS credits corresponds to a workload of 160-180 hours.

There will be a mixture of lectures and case presentations/discussions. At the start of the course the students will be allocated to teams consisting of 3-5 students. During the course the teams will be required to work with and to present case solutions.

For all students to obtain maximum benefit from this class it is essential that each student participates. Please check It's learning before the start of the course to get the schedule. The course starts immediately at the beginning of the semester.

Please note that while attendance is not compulsory in all courses, it is the student’s own responsibility to obtain any information provided in class that is not included on the course homepage/It's learning or text book.


Examination
Your course grade will be based on the following activities and weights:
30 % Assignment (mid-term paper) - group of max. 3 students
70 % Final 3-hour written examination - individual