Investment Analysis 1

Module title	Investment Analysis 1
Module code	BEAM032
Academic year	2019/0
Credits	15
Module staff	Victoria Patsika (Convenor)

Duration: Term	1	2	3
Duration: Weeks	11

Number students taking module (anticipated)	150

Module description

Summary:

This is the first module of two in Investment Analysis. Its principal function is to ensure that you are able to use the tools available for equity valuation using annual reports. You will learn how to critically assess the content of annual reports.

Additional Information:

Pre-requisite

Basic understanding of accounting and financial statement articulation.

Internationalisation

This module uses International Financial Reporting Standards (IFRS) which apply to more than 100 countries around the world, and, therefore, prepares you for an international career.

Sustainability

Presentations, PowerPoint slides and tutorial notes are all made available on the ELE (Exeter Learning Environment).

External Engagement

The content helps familiarise you with the standards of the IASB (International Accounting Standards Board).

Employability

In this module, students acquire skills which will be directly applicable to roles such as equity analysts and investors of various kinds. Students learn to synthesize information from public sources, to evaluate a firm’s performance and financial position.

Module aims - intentions of the module

During this course you will study how financial statements are prepared and then explore the nature and use of accounting information relating to business entities. The underpinning conceptual framework is that of ‘decision usefulness’; i.e., that the primary purpose of accounting (and financial reporting) is to provide useful information to the stakeholders of enterprises. The economic framework within which such information is produced is reviewed, as are the strengths and limitations of published financial statements.

The financial information a company discloses is used by investors and analysts to determine how to assess a company in the marketplace. We therefore adopt a user perspective, rather than a preparer one, because most participants will become users of financial statements, internal (managers, executives) or external (investors, analysts), rather than preparers of financial statements. Knowledge of basic rules that govern the production of financial statements is essential, as this will underpin your ability to analyse reported numbers.

Intended Learning Outcomes (ILOs)

ILO: Module-specific skills

On successfully completing the module you will be able to...

1. understand how financial statements are prepared according to accounting rules.
2. develop a framework for assessing a firms financial performance that is useful to fund managers, financial analysts, strategy advisors and the stakeholders of the company.
3. master the different tools used to perform a financial statement analysis.
4. appreciate the discretion available to managers in preparing financial statements
5. demonstrate an awareness of the limitations of financial statements and recognise what information they can and cannot provide

ILO: Discipline-specific skills

On successfully completing the module you will be able to...

6. read, understand and analyse a firms financial performance and position from its annual reports.
7. understand the effects of various events on a company's financial statements

ILO: Personal and key skills

On successfully completing the module you will be able to...

8. apply a set of structured techniques to reach a well defined decision within a noisy environment, where a clearly defined unique solution does not exist.
9. communicate a detailed and convincing company assessment, appropriate both to a practitioner as well as an academic audience.

Syllabus plan

The following is an indicative of the topic we will aim to cover in this course. Some topics may not be covered if time does not allow us to learn them.

Course overview and introduction
The balance sheet assets, liabilities and equity
The income statement
The statement of cash flows
Ratio analysis
Fixing reported numbers – depreciation, R&D, off balance sheet items
Forecasting financial statements
Reading annual reports

Learning activities and teaching methods (given in hours of study time)

Scheduled Learning and Teaching Activities	Guided independent study	Placement / study abroad
36	114	0

Details of learning activities and teaching methods

Category	Hours of study time	Description
Contact hours	30	Lectures (10 x 3 hours)
	6	Tutorials (3 x 2 hours)

Formative assessment

Form of assessment	Size of the assessment (eg length / duration)	ILOs assessed	Feedback method
Review exercises	Each session is accompanied by a review exercise.	1-9	Correct answers
Tutorial exercises	Each tutorial will have several questions.	1-9	Correct answers

Summative assessment (% of credit)

Coursework	Written exams	Practical exams
20	80	0

Details of summative assessment

Form of assessment	% of credit	Size of the assessment (eg length / duration)	ILOs assessed	Feedback method
Examination	80	2 hours	1-9	Correct answers
Group Assignment (including peer evaluation)	20	4 questions	1-9	Written feedback

Details of re-assessment (where required by referral or deferral)

Original form of assessment	Form of re-assessment	ILOs re-assessed	Timescale for re-assessment
2 hours written examination and Group Assignment	2 hours written examination (100%)	1-9	August reassessment period

Indicative learning resources - Basic reading

Required reading:

K. Palepu, P. Healy, V. Bernard, and E. Peek (2013), Business Analysis and Valuation, IFRS edition (3rd edition), text only; Cengage Learning Business Press.

Supplementary reading:

Kimmel, Weygandt and Kieso, Financial Accounting: Tools for Business Decision Making, 5^th Edition, Wiley, 2008.

Indicative learning resources - Web based and electronic resources

ELE – http://vle.exeter.ac.uk/course/view.php?id=146

Key words search

Financial reporting, equity analysis, IFRS

Credit value	15
Module ECTS	7.5
Module pre-requisites	None
Module co-requisites	None
NQF level (module)	7
Available as distance learning?	No
Origin date	17/07/2014
Last revision date	22/08/2018