Financial Statement Analysis and 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
Module will run
| Occurrence | Teaching period |
|---|---|
| A | Semester 2 2025-26 |
Module aims
This module covers fundamental analysis, an economic framework for business analysis and valuation, based primarily on financial accounting information. It focuses on fundamental principles of value investing, including key ideas like “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 like Bloomberg, Refinitive, I/B/E/S, Compustat, CRSP, 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 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 Business Valuation
– Industry and
Company Analysis
– Understanding Financial Statements
–
Financial Analysis Techniques and Applications
– Profitability
and Risk Analysis
– Evaluating Quality of Financial Report and
Earnings
– Estimating Cost of Capital
– Financial Statement
Modelling and Forecasting
– Intrinsic Valuation Models
–
Relative Valuation
– Asset-Based Valuation and Valuation by
Parts
– Private Company Valuation
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.