GRA 6235 Business Analysis and Valuation
GRA 6235 Business Analysis and Valuation
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™.
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.
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.
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.
- 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.
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.
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.
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 category | Weight | Invigilation | Duration | Support materials | Grouping | Comment 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 | 30 | No | - | Group (1 - 3) | 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 | 70 | Yes | 3 Hour(s) |
| Individual | Written examination under supervision |
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.