Financial Statement Analysis & Valuation - MAN00144M
Module summary
This course provides a comprehensive understanding of the guiding principles of Business Analysis and Valuation. You’ll learn how to evaluate the value of companies, assess their performance, and develop strategies to create, manage, and maximise the firm's economic value.
Related modules
Pre-requisite modules
Module will run
| Occurrence | Teaching period |
|---|---|
| A | Semester 2 2026-27 |
Module aims
This module covers fundamental analysis, an economic framework for
business analysis and valuation, based primarily on financial
accounting information. It focuses on the fundamental principles of
value investing, including key ideas such as “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 business economics,
statistics, business strategy and corporate 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 analyse
financial statements and reports of real firms, and explore empirical
studies using real financial databases such as LSEG/Refinitiv,
I/B/E/S, Compustat, Mintel, 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 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.
- Critically integrate and apply
concepts from business economics, financial accounting, business
strategy, statistics, and corporate finance to analyse businesses and
assess company valuation.
- Conduct strategy and financial
statement analysis to identify key profit drivers, assess major risks,
and evaluate how firms create value.
- Understand how firms’
assets, liabilities, and earnings are influenced by accounting
choices, opportunistic financial reporting, and differences in
analysts’ information environments—and explore strategies to address
these challenges.
- Estimate the cost of capital of any
real-world company using publicly available information.
-
Understand and apply intrinsic valuation models relevant to business
forecasting and valuation.
- Understand and apply relative
valuation multiples to assess business value and conduct stock
screening for investment analysis.
- Perform asset-based and
sum-of-the-parts valuation for a real-world company.
-
Demonstrate effective written communication skills in analysing
company financial statements from a valuation and investment perspective.
Academic and graduate skills:
- Advanced subject-specific
knowledge and understanding.
- Problem-solving: ability to
analyse complex financial and non-financial data and derive meaningful
insights.
- Critical Thinking: proficiency in handling and
interpreting quantitative and qualitative data.
- Technical
Proficiency: proficiency in Microsoft Excel, LSEG/Refinitiv for
financial modelling and valuation.
- Communication Skills: the
ability to create effective financial models and reports.
-
Decision-Making: application of financial analytics for informed
business decisions and implementation of learned concepts in
practical, industry-relevant scenarios.
Module content
Indicative contents are as follows:
– First Principles of
Valuation
– Business Environment and Strategy Analysis
–
Understanding Financial Statements
– Intrinsic Valuation
Models
– Accounting Analysis
– Financial Analysis:
Profitability and Risk
– Estimating Cost of Capital
–
Financial Modelling and DCF Valuation
– Relative Valuation
–
Asset-Based Valuation and Valuation by Parts
– Private Company
Valuation
– LSEG/Refinitiv Workshops
Indicative assessment
| Task | % of module mark |
|---|---|
| Closed/in-person Exam (Centrally scheduled) | 50.0 |
| Groupwork | 50.0 |
Special assessment rules
None
Indicative reassessment
| Task | % of module mark |
|---|---|
| Closed/in-person Exam (Centrally scheduled) | 50.0 |
| Essay/coursework | 50.0 |
Module feedback
Students have access to feedback on individual assessments. General cohort assessment feedback is posted on the VLE after the marking is complete.
Indicative reading
Essential Readings:
1. Pinto, J. E. (2020). Equity Asset
Valuation (4th ed.). John Wiley & Sons.
2. Damodaran, A.
(2025). Investment Valuation (4th ed.). John Wiley & Sons.
3.
McKinsey & Company Inc. (2025). Valuation: Measuring and Managing
the Value of Companies (8th ed.). John Wiley & Sons.
Additional Readings:
1. Benninga, S., and Mofkadi, T. (2022).
Financial Modeling (5th ed.). United States: MIT Press.
2.
Penman, S. and Pope, P.F. (2025). Financial Statement Analysis for
Value Investing. Columbia University Press.
3. Damodaran, A.
(2014). Applied Corporate Finance (4th ed.). John Wiley &
Sons.
4. Robinson, T. R. (2020). International Financial
Statement Analysis (4th ed.). John Wiley & Sons.