ACCOUNTG 598 - Valuation and Fundamental Analysis
This course focuses on the valuation of equity securities using fundamental analysis. The course material augments and extends the basic material in Financial Statement Analysis (ACCOUNTG 597) to the specific and complex setting of valuing equity securities. The tools covered in this course consist of valuation models (i.e., discounted dividend, cash flow (weighted average and adjusted present value methods), abnormal earnings and economic profit) as well as multiples approaches. The course emphasizes the role of financial statement data in equity valuation, using advanced problems and cases developed around actual financial statements. In addition to viewing equity valuation from a fundamentals perspective, we will cover selected technical strategies, including momentum-based trading rules.
Overall, the course is intended to provide students with a strong theoretical and applied understanding of the key equity valuation and stock selection approaches used by securities analysts and investment/portfolio managers. The links between, and the limitations of, these approaches will be discussed, so that students gain an understanding of the issues governing the appropriateness of one or more methods in a particular setting.
The course assumes a basic understanding of introductory financial accounting and introductory corporate finance/investments. Although not required, some basic understanding of financial statement analysis (ACCOUNTG 597) is helpful. The topics covered in the class are intended to complement related elective courses in accounting (such as financial statement analysis) and in finance (such as corporate restructuring).
Recommended (but not required): Valuation - Measuring and Managing the Value of Companies, Koller, Goedhart and Wessels, 4th edition (the 3rd edition, where the authors are listed as Copeland, Koller, and Murrin, will work well, too).