GRA 6235 Business Analysis and Valuation

GRA 6235 Business Analysis and Valuation

Course code: 
GRA 6235
Department: 
Accounting, Auditing and Business Analytics
Credits: 
6
Course coordinator: 
Ignacio Garcia de Olalla Lopez
Course name in Norwegian: 
Business Analysis and Valuation
Product category: 
Master
Portfolio: 
MSc in Business - Accounting and Business Control
Semester: 
2020 Autumn
Active status: 
Active
Level of study: 
Master
Teaching language: 
English
Course type: 
One semester
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™.

Learning outcomes - 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.
Learning outcomes - Skills

At the end of this course, students should be able to:

  • Identify and evaluate strategic and non-financial objectives of organizations.
  • Analyze the accounting quality of the financial statements.
  • Adjust the financial statements to correct for distortions.
  • Reformulate the income statement and the balance sheet, and calculate FCFF and FCFE.
  • Perform a strategy analysis and use it to make consistent pro-forma statements.
  • Estimate the cost of equity, WACC and the required rate of return on operating asset, and assess how capital structure affects the cost of capital.
  • Choose a proper valuation method given the characteristics of the firm and estimate the value of the firm given the chosen method.
General Competence

By the end of the course the student will have acquired the capacity to critically use the financial statements for valuation purposes and make the proper adjustments  when the situation requires it. The student will also be in a position to identify which valuation method is most appropriate in every situation.

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.
Teaching and learning activities

There is a consistent and continuous integration of computer-based tools across all course topical areas. Students can expect to perform most, if not all, coursework online, using various computer tools.

Software tools
Software defined under the section "Teaching and learning activities".
Additional information

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.

Both parts of the assessment must be passed in order to receive a final grade in the course.

Qualifications

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 specific prerequisites and will assume that students have followed normal study progression. For double degree and exchange students, please note that equivalent courses are accepted.

Exam categoryWeightInvigilationDurationSupport materialsGroupingComment exam
Exam category:
Activity
Form of assessment:
Presentation and discussion
Exam code:
GRA62352
Grading scale:
ECTS
Grading rules:
Internal examiner
Resit:
Examination when next scheduled course
30No -Group (1 - 4)Students will be given a case. They will present their solution to the class and will engage in a discussion. Group size may vary depending on class size.
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
GRA62353
Grading scale:
ECTS
Grading rules:
Internal and external examiner
Resit:
Examination when next scheduled course
70Yes3 Hour(s)
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
Individual Written examination under supervision
Exams:
Exam category:Activity
Form of assessment:Presentation and discussion
Weight:30
Invigilation:No
Grouping (size):Group (1-4)
Support materials:
Duration: -
Comment:Students will be given a case. They will present their solution to the class and will engage in a discussion. Group size may vary depending on class size.
Exam code: GRA62352
Grading scale:ECTS
Resit:Examination when next scheduled course
Exam category:Submission
Form of assessment:Written submission
Weight:70
Invigilation:Yes
Grouping (size):Individual
Support materials:
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
Duration:3 Hour(s)
Comment: Written examination under supervision
Exam code: GRA62353
Grading scale:ECTS
Resit:Examination when next scheduled course
Type of Assessment: 
Ordinary examination
Total weight: 
100
Sum workload: 
0

A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 6 ECTS credits corresponds to a workload of at least 160 hours.