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 firm's characteristics and estimate the firm's value 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. Furthermore, the students will be aware of how the way that firms handle sustainability issues has an impact on future cash flows and, therefore, on the value of the firm.
- 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.
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.
It is the student’s own responsibility to obtain any information provided in class.
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.
Disclaimer
Deviations in teaching and exams may occur if external conditions or unforeseen events call for this.
| Assessments |
|---|
Exam category: Submission Form of assessment: Multimedia production Weight: 30 Grouping: Group (1 - 6) Duration: 3 Week(s) Exam code: GRA 62352 Grading scale: ECTS Resit: Examination when next scheduled course |
Exam category: Submission Form of assessment: Written submission Invigilation Weight: 70 Grouping: Individual Support materials:
Duration: 3 Hour(s) Comment: Written examination under supervision Exam code: GRA 62353 Grading scale: ECTS Resit: Examination when next scheduled course |
All exams must be passed to get a grade in this course.
| Activity | Duration | Comment |
|---|---|---|
Teaching | 24 Hour(s) | Classroom explanations and different activities (discussions, case-solving, problem-solving, etc.) |
Digital resources | 12 Hour(s) | Work on asynchronous activities (videos, cases, discussions, articles, etc.) |
Prepare for teaching | 36 Hour(s) | Preparation of lectures (reading the literature, work with suggested cases that will be discussed/solved during the next lecture, etc.) |
Examination | 36 Hour(s) | Preparation and work on the mid-term presentation. |
Examination | 52 Hour(s) | Final exam preparation |
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.
Group size may vary depending on class size.