22743 Business Analysis and Valuation
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Subject handbook information prior to 2025 is available in the Archives.
Credit points: 6 cp
Subject level:
Postgraduate
Result type: Grade and marksRequisite(s): ((25742 Financial Management OR 25799 Finance for Managers) AND 22748 Financial Reporting and Analysis AND 22754 Corporate Accounting AND 22747 Accounting for Managerial Decisions)
These requisites may not apply to students in certain courses. See access conditions.
Description
The aim of this course is to demonstrate and apply a framework for business analysis and valuation. The emphasis of the course is on translating the tools of macroeconomic analysis, industry analysis, strategic business analysis and financial statement analysis into practical situations. The techniques are applied in cases and projects involving listed companies. The subject is intended for students interested in business consulting, investment banking, business analysis and corporate lending.
Subject learning objectives (SLOs)
| 1. | Discuss and integrate the links between macroeconomic analysis, business global and local environment, industry analysis, strategic business analysis and financial statement analysis |
|---|---|
| 2. | Explain governance and risk management of a business |
| 3. | Research and collect information on firm strategic direction and its environment to forecast future firm performance |
| 4. | Produce estimations of firm value using multiple valuation techniques |
Course intended learning outcomes (CILOs)
This subject also contributes specifically to the following program learning objectives:
- Collaborate with peers and stakeholders to achieve desired business outcomes (2.2)
Contribution to the development of graduate attributes
This subject focuses on establishing a clear linkage between several skills normally acquired by business students so as to enable them to conduct rigorous business analysis and prepare sound business valuations. The subject combines skills in business strategy, finance and accounting so as to enable students to apply these methods of analysis in combination. It also contributes to the accounting major by demonstrating the analysis of accounting quality and its implications for financial analysis and valuation.
Teaching and learning strategies
Strategy 1. Students’ Preparation for Learning: Each week, students are expected to undertake pre-work which starts with readings on business valuation and financial analysis. These readings introduce students to the theoretical aspects of the subject and enable them to attend the valuation problems and real life case studies. After doing this pre-work, students are expected to work on their group and individual assignments and apply business valuation and financial analysis skills in order to understand and value an ASX listed firm.
Strategy 2. Active Learning in Seminars: Seminars provide students both theory and practical applications of business valuation and financial analysis in the real world. After their lecturer introduces new material for the week, students are expected to debate over the pre-work that they have done prior to coming to the seminar. In addition, students are expected to work closely with their fellow students and their lecturer on analyzing and understanding the ASX listed firm that they have chosen for the assignments.
Strategy 3. Online learning: Extensive use is made of the UTS learning management system, which will be used to share information, provide feedback and encourage interaction between staff and students. Students are expected to explore prescribed case studies, videos, readings and engage in weekly activities provided. In addition, students are encouraged to share their questions and ideas on the discussion board, with prompt guidance and feedback from the Subject Coordinator.
Strategy 4. Ongoing Feedback: Structured feedback is provided individually about weekly tutorial activities, formative assessment tasks and the assignment progress. Detailed guidance as to the assessment criteria and the provision of timely feedback forms an important part of the learning process in this subject.
Content (topics)
- Industry and strategy analysis: understanding the strategic decisions businesses make to create/maximise shareholder value, as well as the constraints within which this occurs
- Accounting analysis: understanding the link between strategic considerations and financial statements, including identification of the quality of accounting numbers
- Financial analysis: assessing the financial performance and position of a business using ratio analysis and cash flow analysis, in light of the strategic direction and accounting quality identified
- Prospective analysis: forecasting and valuation model implementation
Assessment
Assessment task 1: Assignment (Group 20%) and Presentation (Individual 10%)*
| Intent: | This assignment assesses the students' ability discuss and integrate the links between macroeconomic analysis, business global and local environment, industry analysis, strategic business analysis, corporate governance and financial statement analysis. In addition, students need to identify risks and opportunities associated with strategic decisions made by a particular publicly listed company. |
|---|---|
| Objective(s): | This addresses subject learning objective(s): 1 and 2 |
| Weight: | 30% |
| Length: | 5000 words (exclusive of references and appendices). +/- 10% is acceptable. Appendices are limited to a maximum of 10 pages. Please use a font size of 11, 2.5 cm page margins and a line spacing of 1.5. Submission 1. Only a soft copy of the group report should be submitted by only one nominated group member through TurnitIn on Canvas. 2.Both the assignment submission and group reports should be named in the format "{companyticker}_{studentID1}_{studentID2}_{studentID3}_{studentID4}_{studentID5}". For example, a group of 2 students working on Qantas should name their submission and group report as "QAN_12345678_23456789". Assignments that are not correctly named will not be marked. 3. All group reports should have a cover page which includes the chosen company name, student name and ID of each group member and a word count. All reports should have an introduction and a conclusion. Table of content and executive summary are optional. Harvard referencing style should be used. 4. Students may submit their group report to TurninIn as many times as they like prior to the submission deadline. Students are able to submit late assignments to TurnitIn only once after the submission deadline. For each day that the assignment is late, the assignment will lose 10% of the raw assignment mark. Special considerations are approved only if they are applied before the submission deadline for serious medical or personal reasons with supporting documents 5. TurnitIn checks % similarity to materials from other assignments, websites and journal articles within the Business School and from world-wide institutions. Students should be warned that copying materials from their own assignments submitted for other subjects or in previous semesters is also considered as plagiarism and hence an academic offence. |
| Criteria: | *Note: Late submission of the assessment task will not be marked and awarded a mark of zero. |
Assessment task 2: Assignment (Individual)
| Intent: | This assignment evaluates student’s ability to research and collect information on firm strategic direction and its environment to forecast future firm performance. In addition, this assignment tests the students' understanding of the concepts of business valuation and their ability to consider the practical applications. |
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| Objective(s): | This addresses subject learning objective(s): 3 and 4 This addresses program learning objectives(s): 2.2 |
| Weight: | 30% |
| Length: | As stated in the subject outline it is a maximum of 400 words exclusive of references and appendices |
| Criteria: | Demonstration of an understanding of application of business analysis tools and valuation methods to assessing an appropriate valuation independent of market price. |
Assessment task 3: Final Exam (Individual)
| Intent: | This exam, consisting of practical and theory questions, will test students understanding of the theory and ability to apply the theory to business valuation and financial analysis. The exam will be similar in spirit to the problems and cases assigned during the semester. This assessment task is a compulsory component of the subject. A student must attain no less than 40% of the marks in this assessment to pass the subject irrespective of the subject’s total marks. |
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| Objective(s): | This addresses subject learning objective(s): 1, 2 and 4 |
| Weight: | 40% |
| Length: | 2 |
Minimum requirements
A student must achieve 50% or more of the subject’s total marks AND achieve 40% or more in the final exam to pass the subject.
A Fail (X) Grade is awarded to a student who attains 50% or more of the overall subject assessment marks but attains less than 40% of the final exam marks. To pass the subject, the student must then attain 50% or more of the marks in the supplementary task, in which case the student is awarded an overall mark of 50P.
Required texts
- Palepu, K, Healy, P, Wright, S, Bradbury, M and Coulton, J (2021) Business Analysis and Valuation using Financial Statements, 3rd Asia-Pacific Edition
- Faculty of Business (see URL), Guide to Writing Assignments, Faculty of Business, University of Technology, Sydney. http://www.business.uts.edu.au/teaching/guide/guide.pdf
References
- Penman, S 2004, Financial Statement Analysis and Security Valuation, McGraw-Hill, New York.
Other resources
Improve your Academic and English Language Skills
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UTS Learning Management System
Some spreadsheets with financial information related to cases and some further case studies/exercises are posted on Canvas. Please note that the actual lecture slides are not posted on Canvas. Course announcements are posted on the course page on Canvas. Useful external links are provided. The course pages on Canvas allow you to post questions and comments you may have in relation to the course. Please use and check these resources before emailing the lecturer.