Business Analysis and Valuation

Paper Code:

DBBA 601D

Credits:

Contact Hours:

60.00

Max. Marks:

100.00

Objective:

Course Objectives:

This course will enable the students to -

Developing skills using financial data to assess a company’s performance.

Course Outcomes (COs):

Course

Learning outcomes

(at course level)

Learning and teaching strategies

Assessment

Strategies

Course Code

Course Title

DBBA 601D

Business Analysis and Valuation

CO 401: Analyze historical growth rates and projecting future ones are a big part of any financial analyst’s job

CO 402: Understand the nature and sources of goodwill and appreciate the need for valuation of shares.

CO 403: Analyze the investment opportunity costs and maximizes potential investments in the process.

CO 404: Analyze a firm’s business strategy and financial performance using real-world data.

CO 405: Analyze the different methods of business valuation.

CO 406: Understand financial statements to be able to forecast the future performance of a firm.

Approach in teaching:

Power point presentations

Case discussions

Group Discussions

Brainstorming, Reading Assignments

Learning activities for the students:

Self-learning assignments, Chart Preparation, PPTs, Group Discussions

Formative Assessment through group discussion, quiz, presentations, Analogy Prompt, Padlet, Kahoot

Exit tickets, Class tests

Summative assessment through Quiz, Semester end examination, Assignments, Presentation, Individual and group projects

12.00

Unit I:

Unit-1

Analysis of Corporate Financial Statements: Income Statement and Balance Sheet. Procedure, Types of Financial Analysis.

Comparative, Common Size and Trend Analysis:

Comparative Financial Statement- Comparative Balance Sheet, Comparative P&L Account.

Common Size Financial Statement- Common size Balance sheet, Common size P&L Account. Trend Analysis- Trend Percentages, Trend Ratios.

12.00

Unit II:

Unit-II

Financial Interpretation Through Ratios Analysis: Liquidity, Solvency, Turnover, Profitability and Investment analysis ratios

Cash flow Statement: Meaning, Scope, major items affecting the cash flows and Preparation of Cash Flow Statement.

12.00

Unit III:

Unit-III

Time Value of Money: Concepts, Future value or compounding, Present value or Discounting.

Cost of Capital: Explicit and Implicit costs; Measurement of cost of capital; Cost of debt; Cost of perpetual debt; Cost of Equity Share; Cost of Preference Share; Cost of Retained Earning; Computation of over-all cost of capital based on Book value and Market weights.

12.00

Unit IV:

Unit-IV

Valuation of Goodwill: Concept and Factors affecting Goodwill, Basis of Goodwill Valuation, Methods of valuation of Goodwill- Years’ Purchase Method, Capitalization method, Annuity Method

Valuation of Shares: Needs, Methods of Valuation – Net asset Method, Yield Valuation method, Fair Value of Shares.

12.00

Unit V:

Unit-V

Mergers and Acquisition: Concept, Types of Mergers, Financial consideration in merger, Benefits of Merger & acquisition, Disadvantages of Merger & acquisition, procedure of Merger & acquisition, Essentials for successful Merger & acquisition.

Essential Readings:

Essential Readings:

Foster, George Financial Statement Analysis, 2nd ed., Pearson Education Pvt Ltd
Damodaran, A. (2008). Damodaran on Valuation, Security Analysis for investment and Corporate Finance (2nd ed.). Wiley India Pvt. Ltd.
M.R .Agarwal, “Financial Analysis and Control”, Garima Publications

Suggested Readings:

Chandra, P. (2011).Corporate Valuation and Value Creation , (1st ed). TMH
Weston, Chung, Hoag,Mergers, Restructurig and Corporate Control, Prentice Hall of India
Kuma r B Rajesh, Mergers and Acquisitions, Tata McGraw HillEducation,2011.
Kavita Shetty, Sharad R. Kale and Rajinder S. Aurora, Mergers and Acquisitions, Oxford University Press, 2011.
Gernard Picot, Handbook of International Mergers & Acquisitions, Palgrave Publishers Ltd., 2008.

References:

E-Resources: