Financial statement analysis and security valuation (MRR230)
This course is an advanced course in financial statements and valuation at the master's level. We will examine how the value of firms can be estimated. Knowledge of both finance and accounting is integrated into the course.
The financial statements contain value-relevant information. This course therefore focuses on how this information can be used for valuation purposes. We also focus on how active investors can exploit potential mispricing in the market. Further, earnings differ from cash flows because of accrual accounting. Thus, the course lays out how accruals can help in understanding the value of firms.
Course description for study year 2024-2025. Please note that changes may occur.
Course code
MRR230
Version
1
Credits (ECTS)
10
Semester tution start
Spring
Number of semesters
1
Exam semester
Spring
Language of instruction
English
Content
This course is an advanced course in financial statements and valuation at master's level. The course covers techniques of fundamental analysis, profitability analysis, growth analysis, liquidity analysis and decision making based on this. Upon completion of the course the participant will be able apply their knowledge to perform a thorough analysis of a company. The participant will also be equipped to discuss relevant parameters in a valuation and will be able to perform a sophisticated stand-alone valuation, and evaluate the resulting value.
The course covers the following topics:
- How to analyse and conduct performance evaluations based on financial statements, and how they are used in valuation
- Cash accounting and accrual accounting
- Accrual accounting and valuation
- Forecasting and valuation analysis
- Analysis of the quality of financial statements
- Analysis of risk and return
- ESG performance and financial performance
Learning outcome
Knowledge
Upon completion of this course, students will have knowledge of:
- Have the necessary background knowledge to analyze financial accounting statements from a valuation perspective.
- Have knowledge of alternative valuation models, including their strengths and weaknesses.
- Have knowledge of fundamental valuation
Skills
Upon completion of this course, students will be able to:
- Extract value relevant information from financial reports.
- Analyze historical financial performance.
- Forecast future performance.
- Carry out a valuation of a company and evaluate the resulting value.
Required prerequisite knowledge
Recommended prerequisites
Exam
| Form of assessment | Weight | Duration | Marks | Aid |
|---|---|---|---|---|
| Written exam | 1/1 | 4 Hours | Letter grades | Dictionary, Valid calculator, |
Written exam in Inspera. Ordinary exam each semester.
Coursework requirements
There will be one mandatory submission; a written assignment (individual).
Information about this coursework requirement will be announced on Canvas.
Course teacher(s)
Course coordinator:
Marius SikvelandStudy Program Director:
William Gilje GjedremCourse teacher:
Dengjun ZhangCourse teacher:
Marius SikvelandMethod of work
The course is delivered in the form of lectures. Integral to the lectures are problems that the students need to solve in order to fully benefit from the lectures.
Students are expected to use 280 hours to complete the course:
1. Lectures: 50 hours, some of which may be delivered as video lectures.
2. Preparing for lectures: 130 hours.
3. Working on end-of-chapter problems / previous exams: 100 hours.
Overlapping courses
| Course | Reduction (SP) |
|---|---|
| Financial statement analysis and security valuation (MØA220_2) | 10 |