NUS Business School. Department of Accounting

Transcription

1 NUS Business School Department of Accounting ACC5001 BUSINESS ANALYSIS AND VALUATION COURSE OUTLINE SEMESTER 1,

2 1. COURSE INSTRUCTORS 1.1 Staff contact details Coordinator /Instructor Dr Wen HE Location: Biz (Mochtar Riady Building) Phone: Communication and consultation Consultation time: Thursday 3pm 5pm For security reasons staff can only respond to s from your official university account. This way we can verify that we are communicating with the correct student. It is your responsibility to check this account regularly. If you prefer to use a different address please ensure that your NUS is forwarded and that you include your name and student ID when communicating with staff or other students. 2. COURSE DETAILS 2.1 Teaching Times and Locations Week Day Time Venue Thursday 11am 2pm BIZ Summary of Course This course is about the analysis of a company s operation and the determination of its fundamental value. Financial information provided by public companies will be examined to understand their business environment, operation performance, business and financial risks. Based on a sound understanding of the business, forecasts of future performance will be developed and companies intrinsic value will be estimated. The course comprises two related parts. Part one outlines the four basic steps in business analysis framework: strategy analysis, accounting analysis, financial analysis and prospective analysis. Part two discusses various methods of equity (share) valuation and examines issues in equity markets. This course has four (4) units of credit. 2.3 Aims and Objectives This course aims to develop students skills to analyse companies operation and determine their fundamental value based on publically available information. It is a capstone course that brings together areas of financial accounting, finance and strategic management. This course is very useful for the following stakeholders: managers who want to understand their performance and maximize shareholder s value; investors who ACC5001 Business Analysis and Valuation 1

3 look for stocks whose prices are different from fundamental values; financial analysts who need to forecast companies future performance and issue stock recommendations; investment bankers who help clients raise capital in financial markets; and business consultants who advise their clients on business strategy and operation efficiency. Pre-requisites There are no formal pre-requisites for this course, but basic knowledge in accounting and finance would be very helpful. 2.4 Student Learning Outcomes On successful completion of the course you should be able to: 1. Understand the key factors influencing a firm s business environment; 2. Analyse the competition in an industry and the industry life cycle; 3. Identify and evaluate a firm s competitive advantage and corporate strategy; 4. Use information in financial statements to calculate financial ratios and assess firms profitability, operation efficiency and financial risk; 5. Apply a structured approach to forecast firms future performance. 6. Estimate a firm s fundamental value and make informed investment decisions; 7. Work effectively in a team with such skills as task assignment and management, conflict resolution and co-operation, consensus building, and leadership; 8. Conduct applied business research (including locating and critically interpreting and evaluating firm-specific financial information); 9. Apply business analysis knowledge in both local and global organizational contexts; 10. Provide professional business presentations (both oral and written). 3. LEARNING AND TEACHING ACTIVITIES 3.1 Approach to Learning and Teaching in the Course In this course, you will learn to analyse a business and determine its value in the real business world. We will explain basic techniques and principles of business analysis and valuation in seminars. We will use case studies and a real company ( Airlines) to illustrate how to analyze and value a business. To gain most from this course, you are encouraged to think critically and participate actively in the class discussion. To achieve this, preparations before classes are essential. You also have a chance to analyze and value a real company, which requires you to take initiatives and work effectively in a group environment. 3.2 Learning Activities and Teaching Strategies Seminar Procedure: There will be one three-hour seminar each week. The seminar will involve a oneto-two-hour lecture component and a workshop that either precedes or follows the lecture. The workshop may be used to discuss a case or tutorial questions, review ACC5001 Business Analysis and Valuation 2

4 assigned problems or practice skills. Normally case studies will be discussed in the week following the related lecture. You should bring your prescribed textbook and a calculator to each class. It is essential that, prior to a seminar, you read the relevant course materials and prepare written responses to assigned case study/tutorial questions. Seminar/case study questions often require additional research beyond the normal prescribed readings. Self-Study: Self-study is a key element of the learning design of this course. In most sessions readings and self-study materials will be provided in class and/or posted on IVLE to facilitate deeper learning of core elements of the course. The aim of these selfstudy materials is to encourage you to assume responsibility in the learning process, and to broaden your understanding of the material covered in class. Please note that there are no readings sets required to be purchased at the start of the course. 4. ASSESSMENT 4.1 Formal Requirements The course has 100% continuous assessment. Satisfactory performance in all components of the course is required to gain an overall passing grade. Further details of assessment items are outlined below. 4.2 Assessment Details Assessment Task Weighting Due Date Weekly Case Write-up 10% Week 2 11 Class Participation 10% Week 1 11 Mid-Term Test 20% Week 7 Group Project 30% Week 12 Individual Project 30% Week Weekly Case Write-Up (10%) The case write-up is aimed at preparing yourself for the case discussion in the seminars. You should outline your solutions to the questions at the end of each case study. You need to submit FIVE case write-ups at your choice. The case writeups will be collected at the end of the classes in each specific week. No or faxed submission of assignments will be accepted, and no submissions will be accepted outside of the seminar. Two marks will be rewarded to each case write-up submitted, providing that the work you submit is your own Class Participation (10%) ACC5001 Business Analysis and Valuation 3

5 Students are strongly encouraged to participate into class discussion, particularly the discussion of case studies. Class discussion enables us to learn from each other and improves our communication skills. Each student need to prepare and bring a name tag to the class. Active class participation will be rewarded Mid-Term Test (20%) The tests will assess if you have achieved an adequate level of technical competency in financial statement analysis and the capacity to apply the technical competency analytically and critically in a business environment. The mid-term test will cover the course materials in the first six weeks. It will be a close-book test, have 20 multiple choice questions and last for 45 minutes. Please note there is NO supplementary test. If you know in advance that you cannot sit for the test due to extenuating circumstances, you must contact the course coordinator seven days in advances for an alternative arrangement Group Project (30%) and Individual Project (30%) The projects are aimed at developing your understanding of, and practical skills in financial statement analysis and its applications. It is also designed to enhance teamwork, and analytical and communication skills. Upon successful completion of the project you will have acquired a working knowledge and practical skills in undertaking an equity valuation using leading-edge financial statement analysis techniques. From past experience, the final report often provides excellent evidence of your analytical skills that can presented to prospective employers when applying for jobs. To complete the group project, you are required to: (1) Form groups of 4 to 5 members from students in your class; (2) Progressively analyze your company using the strategy, accounting, financial, and prospective analysis tools identified in the course; (3) Present your findings and analysis in Week 12. (3) Submit your written reports by the end of Week 13 (3pm,Friday 15 Nov 2013). An overall group mark (out of 30%) will be awarded to each student for the group project but the course coordinator reserves the right to provide a reduced mark where a student has provided a sub-standard contribution to group activities. The individual project requires you to analyze a given company and provide solutions to a set of questions. You need to complete the project by yourself and submit your solutions by then end of Week 13 (3pm,Friday 15 Nov 2013). Further details on the nature and requirements of the projects will be provided in Project Guidelines and your progress will be regularly discussed throughout the course. 4.3 Late Submission ACC5001 Business Analysis and Valuation 4

6 Late submission will not be accepted. You will get zero marks for any piece of work you fail to submit on time. It is your responsibility to make sure you meet the deadlines at various stages for your group project. 5. COURSE RESOURCES Prescribed Text: Palepu, K. G., P. M. Healy, Victor Bernard, Sue Wright, Michael Bradbury, and Philip Lee, Business Analysis and Valuation Using Financial Statements: Text and Cases, Asia Pacific Edition, Cengage Learning, Course Website A course website will be maintained within the University s IVLE. Your are required to be enrolled in the course to access this website. The IVLE site is where announcements, copies of lecture notes, seminar questions, and other material will be posted. You are encouraged to read business newspapers, magazines and websites to keep abreast with the latest developments in the financial markets. The following website may of interest to you: STUDENT RESPONSIBILITIES AND CONDUCT Students are expected to be familiar with and adhere to university policies in relation to class attendance and general conduct and behaviour, including maintaining a safe, respectful environment; and to understand their obligations in relation to workload, assessment and keeping informed. 6.1 Workload It is expected that you will spend at least ten hours per week studying this course. This time should be made up of reading, research, working on exercises and problems, and attending classes. In periods where you need to complete assignments or prepare for examinations, the workload may be greater. Over-commitment has been a cause of failure for many students. You should take the required workload into account when planning how to balance study with employment and other activities. 6.2 Attendance Your regular and punctual attendance at lectures and seminars is expected in this course. If students attend less than eighty per cent of scheduled classes they may be refused final assessment. 6.3 General Conduct and Behaviour You are expected to conduct yourself with consideration and respect for the needs of your fellow students and teaching staff. Conduct which unduly disrupts or ACC5001 Business Analysis and Valuation 5

7 interferes with a class, such as ringing or talking on mobile phones, is not acceptable and students may be asked to leave the class. 6.4 Keeping Informed You should take note of all announcements made in lectures, tutorials or on the course web site. From time to time, the University will send important announcements to your university address without providing you with a paper copy. You will be deemed to have received this information. It is also your responsibility to keep the University informed of all changes to your contact details. ACC5001 Business Analysis and Valuation 6

8 7. COURSE SCHEDULE WEEK DATE TOPIC TEXTBOOK READING* 1 August 15 Introduction PH Chap 1 TUTORIAL 2 August 22 3 August 29 4 September 5 5 September 12 Analysis of Industry Competition Analysis of Corporate Strategy Analysis of Accounting Quality Analysis of Profitability and Efficiency 6 September 19 Analysis of Financial Risk Recess Week PH Chap 2 PH Chap 2 PH Chap 3,4 PH Chap 5 PH Chap 5,10 Airlines 1 Inventec Airlines 2 Harnischfeger Airlines 3 7 October 3 Forecasting PH Chap 6 Mid-term Test 8 October 10 Cash Flow based Valuation PH Chap 7 Airlines 4 9 October 17 Earnings based Valuation PH Chap 7 Exercise 1 10 October 24 Valuation Implementation PH Chap 8 Exercise 2 11 October 31 Equity Markets PH Chap 9 Airlines 5 12 November 7 Group Project Presentation 13 November 15 Project Report Submission *PH: Palepu, K. G., P. M. Healy, Victor Bernard, Sue Wright, Michael Bradbury, and Philip Lee, Business Analysis and Valuation Using Financial Statements: Text and Cases, Asia Pacific Edition, Cengage Learning, ACC5001 Business Analysis and Valuation 7