MACC7008 Course Outline_May2021.pdf - THE UNIVERSITY OF...

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THE UNIVERSITY OF HONG KONGFACULTY OF BUSINESS AND ECONOMICSMACC7008 Business Valuation and Fundamental AnalysisGENERAL INFORMATIONInstructor: Dr. Jing LiEmail:[email protected]Office: K. K. Leung, 1212Phone: 39171004Consultation Time:By appointmentTutor:Sean GaoEmail:[email protected]Consultation Time:By appointmentPre-requisites:MACC7001 Financial Accounting FoundationCo-requisites: N/AMutually exclusive: N/ACourse Website:Go to HKU Portal (), select My eLearning/Moodle and then select the course.Other important details:COURSE DESCRIPTIONWith a stock market bubble and a financial crisis in our recent history, there have been increasing calls to “return tofundamentals.” This is a course on fundamental analysis. The primaryemphasis is on equity (share) valuation, with a focuson developing and applying methods for valuing firms using financial statement analysis.The course has a very practical focus. The methods of fundamental analysis will be examined in detail and applied in casesand projects involving listed companies. Topics include models of shareholder value, a comparison of accrual accountingand discounted cash flow approaches to valuation, the determination of price/earnings (P/E) and market-to-book (P/B) ratios,the reformulation of financial statements, the analysis of profitability, growth and valuation generation in a firm, anddiagnosing accounting quality.The course does not “assume market efficiency.” Rather, it develops the techniques for challenging traded prices in orderto assess whether investments are appropriately priced. Most importantly, we learn how to handle accounting and financialreports in valuation. We see that valuation is really a matter of appropriate accounting for value. The course combinesaccounting principles and investment principles to answer the question: How do I account for value so that I can challengestock prices with some confidence?The course will be taught from the perspective of designing techniques to be used in an (independent) equity researchdepartment or firm. Accordingly, the material is pertinent to the security analystparticularly the equity analystwho mustissue a buy, hold or sell recommendations on stocks. However, much of the material covered in the course is also relevantto the corporate financial analyst for evaluating acquisitions, restructurings and other investments, and for calculating thevalue generated by strategic scenarios.COURSE OBJECTIVESThis course is designed to improve your ability to analyze financial reports and value companies. After completing thiscourse, you will gain two valuable tools in your skill set: (1) financial statement analysis; and (2) equity valuation principles.

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Term
Fall
Professor
NoProfessor
Tags
Stock Valuation, Financial Accounting Foundation

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