Topic 1 Valuation and Analysis in a Market Context (1).pptx

Topic 1 Valuation and Analysis in a Market Context (1).pptx...

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1 BX3032 Advanced Business Modelling Topic 1 Modelling the valuation of companies
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Instructor David Goh Teaching Sessions: Lecture 15:00 – 17:50 pm Tuesday Workshop A 09:00 – 10:50 am Friday Workshop B 15:00 – 16:50 pm Friday Office Hours (for consultation): TBA
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Introduction to Subject Text/Readings Download from LearnJCU Assessment - Test 120% - Test 2 20% - Assignment 60% ( Group Work Reflection, Week 9, 10%) ( Group Project, Week 9, 40%) (Individual Oral Presentation (weeks 10 10% ) Project Overview - Takeover or IPO Valuation
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Our students will be able to: 1. Think critically and apply their knowledge 2. Co-operate in a functional valuation team project 3. Submit a professional valuation report 4. Undertake a verbal presentation of their work 5. Apply excel and visual basic modelling skills 6. Evaluate the a takeover strategy or an IPO from the perspective of corporate entrepreneurship 7. Be aware of the ethics and values of their discipline 8. Have a global business perspective
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Things you should know First, valuation is not a science it is an art based on theory, empirical analysis and reasoning Because of the range of choices you must make, your personal biases may influence your valuation This is the biggest problem you will have been asked to address in your studies. It needs to be broken into elements and then assembled. This is what each workshop is designed to do Finally, you will feel a little lost in the early stage of model building. This is normal until you see your solution coming together. 5
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Outline What do we want to achieve in this subject The role of Financial Statement Analysis (FSA)? What Sort of Decisions do FSA Users Make? What about Market Efficiency? Valuation Models and Framework FSA and Valuation Takeover Valuation and Corporate Entrepreneurship Subject Structure and Valuation Project
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Objectives Introduce FSA & locate within primary & secondary debt & equity markets Justify FSA in EMH dominated world Understand role of valuation models Outline the remainder of the subject and the major application project Consider corporate entrepreneurship and professional ethics
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What is Financial Statement Analysis (FSA)? break down complex technical statements into basic elements to understand past performance reformulate for decision making specifically capital flow decisions
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FSA and Capital Market Cash from Loans The Capital Market: Trading Value Balance Sheet Income Statement Cash Flow Statement Statement of Shareholders' Equity Cash from Share Issues Dividends and Cash from Share Repurchases Interest and Loan Repayments Cash from Sale of Debt The Investors: The Claimants on Value The Firm: The Value Generator Secondary Debtholders Secondary Shareholders Cash from Sale of Shares Debtholders Shareholders Operating Activities Investment Activities Financing Activities The Financial Statements: Information on Value Penman, Ch 1 Page 7, Figure 1.1
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