wir839 Financial Statement Analysis and Equity Valuation (Complete module description)

wir839 Financial Statement Analysis and Equity Valuation (Complete module description)

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Module title Financial Statement Analysis and Equity Valuation
Module code wir839
Credit points 6.0 KP
Responsible institute Department für WiRe (BWL und Wirtschaftspädagogik)
Responsible persons
Module responsibility:
Jörg Prokop
Authorised to examine:
Die im Modul Lehrenden
Prerequisites

none
Language of instruction English
Learning outcomes/competencies

By the end of the course students should have answers to the following questions: 

• How are fundamental values (or “intrinsic values”) estimated? 

• How are business strategies analyzed in order to understand the value they create? • What business activities determine value? 

• How is “value created for shareholders” identified? 

• How does one pull apart the financial statements to get at the relevant information for valuing equities? 

• What is the relevance of cash-flows? Of dividends? Of earnings? Of book values? 

• How does ratio analysis help in valuation? 

• How does profitability tie into valuation? 

• What is growth? How does one analyze growth? How does one value a growth firm? 

• How does one analyze the quality of financial reports? 

• How does one deal with the accounting methods used in financial statements? 

• How is financial analysis developed for strategy and planning? 

• What determines a firm's P/E ratio? How does one calculate what the P/E should be? 

• What determines a firm's market-to-book (P/B) ratio? How does one calculate what the P/B should be? 

• How does one evaluate risk? For equity? For debt? 

• How does one evaluate an equity research report? 

• How does one trade on fundamental information?
Module contents

With a stock market bubble and a financial crisis in our recent history, there have been increasing calls to “return to fundamentals.” This is a course on fundamental analysis. The primary emphasis is on equity (share) valuation, with a focus on developing and applying methods for valuing firms using financial statement analysis.
Recommended reading

Benninga, Financial Modeling, 2008 (3rd ed.), 2014 (4th ed.), or 2021 (5th ed.), Cambridge (Mass.) 

Stephen H. Penman (2013), Financial statement analysis and security valuation (5ed.), McGraw-Hill, New York.

Further readings may be announced during the course.
Required assesment
Method of assesment

Typically, a portfolio (consisting of 2-3 parts) or a term paper (Hausarbeit, with a length of about 15-20 pages). Alternative types of exams, such as a written exam (Klausur, with a duration of 90 min.) or an oral exam (mündliche Prüfung, wth a duration of about 30 min.) are possible at the lecturer's discretion. The type of examination will be announced in the first session. 
Exam dates

Typically at the end of the lecture period. Potential mid-term exams will be announced in the first session. 
Duration (semesters) 1 Semester
Module frequency jährlich
Workload
Total workload Contact hours
180 h
Course type
Type SWS Module frequency Contact hours
Lecture 2 28 h
Exercises 2 28 h
Further information

Aufnahmekapazität:
unbegrenzt

Links:

https://uol.de/fiwi-bbl
Applicability of the module
  • Master Betriebswirtschaftslehre: Management und Recht > Schwerpunktmodule AFT - BWL
  • Master Betriebswirtschaftslehre: Management und Recht > Schwerpunktmodule RdW - BWL
  • Master of Education (Wirtschaftspädagogik) Wirtschaftswissenschaften > Mastermodule
  • Master Wirtschafts- und Rechtswissenschaften > Schwerpunkt "Accounting, Finance, Taxation" (AFT) (MPO2020)
  • Master Wirtschafts- und Rechtswissenschaften > Schwerpunktmodule AFT - BWL
  • Master Wirtschafts- und Rechtswissenschaften > Schwerpunktmodule RdW - BWL