Eval­u­ation of Fin­an­cial In­form­a­tion

Course content

This course covers the use of financial information to value firms, projects, and securities in a variety of industries under different economic conditions. The course
will be largely based on case studies and will focus on learning techniques of financial analysis, selecting an appropriate valuation model, analyzing the quality of financial data, and forecasting financial variables and cash flows. Actual industry and company data will be presented to develop analytical/research skills.  The course assumes that you have a good working knowledge of introductory accounting, finance, and economics.

Precourse activity:

Read two papers: (1) Introduction to Financial Ratios and Financial Statement Analysis and (2) Assessing a Company's Future Financial Health;

Class 1: Review of financial statements and financial ratios: balance sheet, income statement, statement of cash flows, key ratios; Case: Santa Fe Trading Company;
Class 2: Pro-forma financial statements and evaluation of investment projects; Case: Hansson Private Label Inc.: Evaluating an Investment in Expansion
Class 3: DCF valuation framework and the cost of capital calculations; Case Eaton Corp.
Class 4: DCF and relative valuation; Case: SUN Brewing
Class 5: Evaluating financial information in the M&A scenario; Case: Sun Micro.

Feedback activity: Students will be asked to analyze financial information and estimate the value of a company (financial statements will be provided). The final exam will also be a case study.

Class 6: Analysis of financial statements in banking; Case: Silicon Valley Bank: Gone in 36 Hours
Class 7: Real estate industry (REITS) analysis; Case: Simon's Hostile Tender for Taubman
Class 8: Health care industry: leveraged buyout analysis; Case: HCA, Inc.
Class 9: How activist investors use accounting data to identify their targets; Case: Kerr-McGee
Class 10: Course review;