Evaluation of Financial Information

About

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. The course assumes that you have a good working knowledge of introductory accounting, finance, and economics.

Preliminary assignment:

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: Valuation framework and the cost of capital calculations; Case Eaton Corp.

Class 3: Pro-forma financial statements and evaluation of investment projects; Case: Hansson Private Label Inc.: Evaluating an Investment in Expansion

Class 4: Evaluating financial information in the M&A scenario; Case: Sun Micro.

Class 5: Analysis of financial statements in banking; Case: Citigroup 2007: Financial Reporting and Regulatory Capital

Class 6: in-class company valuation (AT&T and Time Warner merger);

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 7: Accounting ratios and relative valuation process; Case: SUN Brewing

Class 8: Real estate industry (REITS) analysis; Case: Simon’s Hostile Tender for Taubman

Class 9: Health care industry: leveraged buyout analysis; Case: HCA, Inc.

Class 10: How activist investors use accounting data to identify their targets; Case: Kerr-McGee

Class 11: Course review

Course leader

Carsten Sørensen - Department of Finance

Target group

This is a graduate level course. CBS Summer University courses at Copenhagen Business School is open to all and welcomes domestic and international students as well as professionals.

Course aim

Compute key financial ratios using financial statements of publicly traded companies

Determine financial health of the companies by interpreting key financial ratios

Convert data from accounting statements into free cash flows for valuation purposes

Apply DCF (discounted cash flow) model for in valuation of projects and companies in various industries and economic conditions

Apply relative valuation models using market and transaction multiples

Fee info