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Financial Statement Analysis and Valuation Fall 2015
Korea University Business School Instructor: Professor Jinhan
Pae
Office: LG-POSCO 502 Email: [email protected] Phone: 02
3290-2835
Class: LP530 from 9:00am to 10:15am on Monday and Wednesday
Office Hours: 2:00pm 4:00pm on Monday or by appointment Required
Textbook: Financial Statement Analysis and Security Valuation, 5th
edition (by Penman) Korean translated edition available ( (): )
Useful References:
Equity Valuation and Analysis with eVal, 3rd edition (by
Lundholm and Sloan) Business Analysis and Valuation, IFRS edition
(by Palepu, Healy and Peek) Valuation: Measuring and Managing the
Value of Companies, 5th edition (by Koller, Godhart,
Wessels) Financial Statement Analysis, 10th edition (by
Subramanyam and Wild)
Course Overview: This course (i) provides you with a framework
for business analysis and valuation using financial statements and
other relevant data; and (ii) shows you how to apply this framework
to a variety of business decisions. The course assumes that you
have a good working knowledge of accounting, finance, economics and
business strategy. The focus is on integrating key concepts from
each of these areas and applying them to security valuation. After
taking this course, you are expected
1. to be comfortable with understanding and utilizing
information from financial statements 2. to gain experience using
accounting and non-accounting information in a variety of
business
decision contexts including equity valuation; and 3. to
understand the institutional and regulatory environment governing
the financial reporting
process and the limitations that can result
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Term Project: A financial statement analysis and valuation
project will be conducted on an individual or group basis. You need
to consult with the instructor before you decide on a company to
analyze. A series of presentations will be made throughout the
semester. Grading: Class activities and participation 20% Term
project 30% Exam 50% Tentative Course Schedule Part 1:
Introduction (Ch. 1 and 2) Understanding Financial Statements
and Analysts Reports Selection of a Firm to Analyze
o Data Guide for Korean Companies o Industry Classification
Format and Contents of Financial Statements o Access to IFRS o
Samsung Electronics, Apple Computer and other companies
Accounting for Dividends o SECs document for ex-dividend
date
Part 2:
Review of Financial Statements Ratio Analysis and
Interpretations (Ch. 9) Asset Revaluation S Company Case Valuation
Basics and the Method of Comparables (Ch. 3) Viewing the Business
through the Financial Statements (Ch. 8)
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Part 3: Valuation Models
o Discounted Cash Flow Model (Ch. 4) o Accounting-Based
Valuation Models
Anchoring on Book Value (Ch. 5) Anchoring on Earnings (Ch.
6)
Valuation and Active Investing (Ch. 7) Mid-term Exam
(tentatively Wednesday Nov. 4, 2015) Part 4:
The Analysis of Financial Statements o Reformulation and
Analysis of Financial Statements (Ch. 9, 10 & 11) o Analysis of
Profitability and Growth (Ch. 12 & 13)
Part 5:
Forecasting and Valuation Analysis o Value of Operations and
Effect of Leverage (Ch. 14) o Simple Forecasting and Valuation (Ch.
15) o Full Information Forecasting and Valuation (Ch. 16)
Part 6:
Analysis of the Quality of Financial Statements (Ch. 18) and
Review Preferred Stocks, Non-listed Firms, and Other Issues
Presentation of Term Projects and Review
Final Exam
