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15.535

Business Analysis Using Financial Statements

3-0-6 units · Graduate

Focuses on the strategic, financial, and accounting analysis of a company by means of historical financial statement data. Also studies financial statement forecasting along with a specific application of forecasting - valuation. Concepts are applied to a number of decision-making contexts, including securities analysis, credit analysis, merger analysis, and company performance assessment.

Spring 2003

Topics

  • Introduction: Accounting Scandals, Business Valuation and Market Efficiency
  • The Basics of Company Valuation: DCF Foundations Setting the Stage for Using Accounting Information
  • Cash Flow Analysis: Is Cash King?
  • Using Accounting Earnings for Valuation - Why Earnings and Not Cash Flow?
  • Comparative Analysis: What Do Analysts Do?
  • Turbo Accounting I - A Review of How to Read a Financial Statement
  • How Companies Cook the Books
  • Detecting Earnings Management: Applied Analysis
  • Analyst Team Presentations and Due Diligence Response by Matched Teams
  • Risk Assessment: Do Financial Statements Capture Risk?
  • Risk I: Cost of Capital: Is CAPM Dead?
  • Risk and Accounting Trading Strategies: Do Investors Understand Accounting?
  • Risk II: Accounting #’s in Contracts: Ratio Analysis and Bankruptcy Detection
  • Mergers and Acquisitions: Impairment of Goodwill, Writedowns, Private Firm Valuation
  • Employee Stock Options and Valuation: Should Options be Expensed? Understanding the current debate
  • Off Balance Sheet Activities - Deconstructing the Enron Debacle and Beyond
  • Pension Plans - The Next Accounting Disaster?
  • International Financial Analysis
  • Hot Topics in Accounting and Valuation: + Capstone

Readings

  • To supplement the “customized” coursepack materials, you may wish to purchase the following supplemental reference text on investment valuation: Investment Valuation: Tools & Techniques for Determining the Value of Any Asset , 2nd edition by Damodaran, 2002.
    Recommended

Prerequisites & course information

Prereq: 15.501 , 15.511 , 15.515 , or 15.516 ; Coreq: 15.401 , 15.414 , 15.415 , or 15.417 G (Fall, Spring) 3-0-6 units

Sources