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Financial Statement Analysis and Valuation - MAN00144M

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  • Department: The York Management School
  • Module co-ordinator: Dr. Jairaj Gupta
  • Credit value: 20 credits
  • Credit level: M
  • Academic year of delivery: 2024-25
    • See module specification for other years: 2023-24

Related modules

Co-requisite of having taken/or be taking the module Corporate Finance and Governance (either MAN00139M or ECO00108M).

Module will run

Occurrence Teaching period
A Semester 2 2024-25

Module aims

This module covers fundamental analysis, an economic framework for business analysis and valuation, based primarily on financial accounting information. It focuses on fundamental principles of value investing, including key ideas like “Price is what you pay, Value is what you get,” recognising that the main risk in investing is paying too much. The course particularly emphasises how investors should deal with accounting information when applying these principles. It also integrates key concepts from Economics, Business Strategy and Finance while evaluating the information content of financial statements to generate forecasts, inform capital markets, implement investment strategies, and perform valuations of firms and securities. All lectures are backed by relevant discussions on cutting-edge research in the areas of Business Valuation and Market-based Accounting. Students will also be encouraged to analyse financial statements and reports of real firms, and explore empirical studies using real financial databases like CSMAR, Datastream, I/B/E/S, Compustat, CRSP etc. These practices will also allow students to explore how the value of a stock or an operating asset in an efficient market reflects investors’ expectations of its future performance. This module further aims to equip students with key security analysis and valuation techniques commonly applied in trading rooms and investment firms of the financial industry. Throughout the module, a reasonable amount of time will also be spent on critical discussions on the role of theories and industry practices introduced, in promoting ethical and sustainable business practices.

Module learning outcomes

After successful completion of the module students will be able to:

  • Critically understand the conceptual basis of financial reporting and financial statement analysis through the lens of investing and valuation.

  • Perform strategy analysis to identify firms’ profit drivers and key risks, and how businesses create value.

  • Critically explain how firms’ assets, liability and earnings numbers may be affected by their accounting choices, opportunistic financial reporting, and differences in analysts’ information environment.

  • Calculate, apply, and interpret appropriate financial ratios using financial statements and data from financial databases like CSMAR, Datastream, Compustat, etc.

  • Understand, explain, and apply accruals-based and cash flow-based models relevant to business forecasting and valuation.

  • Apply forecasting techniques to business, and understand the foundation of relative valuation models such as cash and earnings-based models, P/E, book-to-market ratios etc.

  • Demonstrate written communication skills in relation to the analysis of company financial statement information from a valuation and risk perspective.

  • Critically integrate and apply concepts from Business Strategy, Accounting and Finance to analyse business plans and company valuation.

Academic and graduate skills

  1. Advanced subject specific knowledge and understanding.

  2. Problem-solving: ability to analyse complex financial data and derive meaningful insights.

  3. Critical Thinking: proficiency in handling and interpreting quantitative data.

  4. Technical Proficiency: proficiency in Microsoft Excel for financial modelling and analysis.

  5. Communication Skills: the ability to create effective financial models and reports.

  6. Decision-Making: application of financial analytics for informed business decisions and implementation of learned concepts in practical, industry-relevant scenarios.

Module content

Indicative content are as follows:

  1. Industry and Company Analysis

  2. Understanding Financial Statements

  3. Financial Analysis Techniques and Applications

  4. Profitability and Risk Analysis

  5. Financial Reporting Quality

  6. Cost of Capital

  7. Financial Statement Modelling and Forecasting

  8. Discounted Dividend Valuation

  9. Free Cash Flow Valuation

  10. Residual Income Valuation

  11. Relative Valuation

  12. Private Company Valuation

Assessment

Task Length % of module mark
Closed/in-person Exam (Centrally scheduled)
MCQ Exam		 2 hours 50
Groupwork
Group work : Group Report		 N/A 50

Special assessment rules

None

Reassessment

Task Length % of module mark
Essay/coursework
Essay : Individual report		 N/A 50
Essay/coursework
MCQ Exam		 2 hours 50

Module feedback

Feedback will be given in accordance with the University Policy on feedback in the Guide to Assessment as well as in line with the School policy.

Indicative reading

Essential Readings:

Additional Readings:


The information on this page is indicative of the module that is currently on offer. The University is constantly exploring ways to enhance and improve its degree programmes and therefore reserves the right to make variations to the content and method of delivery of modules, and to discontinue modules, if such action is reasonably considered to be necessary by the University. Where appropriate, the University will notify and consult with affected students in advance about any changes that are required in line with the University's policy on the Approval of Modifications to Existing Taught Programmes of Study.