Introduction

Introduction - Introduction Course Basics The objective of...

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Introduction
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Course Basics The objective of this class is for you to understand accounting information and how to use it The decision context we will maintain throughout the class is making an equity investment
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Basis of Equity Investment Decisions Forecasting the future Discounting to the present Comparing our value estimate with current price Investing if estimate > price (or shorting if estimate < price)
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Forecasting Requires Understanding of The economic environment in which the firm operates The accounting methods the firm is using The likelihood that managers are manipulating accounting information The reasons for past performance and the likelihood that past performance will persist into the future
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Use Past Performance to Predict the Future Future Performance Return on Equity Growth Risk Past Performance Return on Equity Growth Risk Market Value Investor Forecast Estimate Analyze
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Is Financial Statement Analysis Useful? Estimating intrinsic value to make investment
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This note was uploaded on 11/21/2011 for the course BMGT 313F taught by Professor Seybert during the Fall '11 term at Maryland.

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Introduction - Introduction Course Basics The objective of...

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