Minor Business Analysis and Valuation
- Broadening minor
- 10 weken
The need to thoroughly understand the performance of a business and its value to investors or society arises in many professional or even everyday situations. Analyses of business performance and value may play an important role in, for example, corporate legal disputes, corporate tax decisions, economic and fiscal policy making, corporate communication, bankruptcy procedures, financial journalism, environmental disputes, family business succession planning, and personal investment decisions. To help us perform such analyses, businesses periodically disclose an abundance of information on their financial, environmental, social, and governance (ESG) performance. This course teaches you to make sense of such information, evaluate performance in a structured manner, get an in-depth understanding of how a business creates value for investors and society, and use tools to estimate such value.
After a brief primer on the basics of accounting and ESG (integrated) reporting, the course teaches you how to use financial statement and ESG information in analysing a firm’s performance and financial position and, ultimately, in valuing the firm’s financial securities. Using real-life examples and cases, the course takes you through the four steps of business analysis and valuation in various contexts, including equity analysis, the analysis of mergers and acquisitions, and litigation analysis. While initially focusing on valuing financial securities, the course also teaches you to evaluate such valuations in a broader context and understand how the value created for investors interacts with and depends on the value created for a firm’s other stakeholders, such as employees, government, and society.
After this minor, students will be able to:
- Understand financial and ESG reporting requirements, limitations, and practices, as well as the environment in which such reporting takes place
- Apply the four steps of business analysis and valuation (strategy analysis, accounting analysis, performance analysis, and valuation) to real businesses
- Analyse a firm's reporting practices and its operating, investment, and ESG performance
- Forecast future financial statements and apply fundamentals-based valuation techniques
- Apply business analysis and valuation tools in different valuation contexts
- Evaluate the interdependencies between value creation for investors and value creation for other stakeholders, such as employees, government, and society
The course consists of lectures, interactive discussions and exercises and thus requires active participation.
All RSM minors have mandatory attendance.
There are no pre-requisites for this course. The first meetings will provide a brief introduction into the most important accounting concepts. Students who never took an accounting course before but wish to get more background information are advised to read an introductory book about accounting (e.g. “Accounting Made Simple: Accounting Explained in 100 Pages or Less” by Mike Piper, or any other “introduction to accounting” book available at the library).
- Lectures by academics and guest speakers from practice.
- Tutorials discussing (i) exercises, (ii) real-life cases on business analysis and valuation, in various context, such as equity investment analysis, the analysis of mergers and acquisitions, and litigation analysis, and (iii) academic articles.
- Student presentations of cases and articles.
- Business Analysis and Valuation: IFRS Standards Edition, Fifth Edition by Krishna Palepu, Paul M. Healy and Erik Peek (Cengage Learning, ISBN Number 978-1-4737-5842-1)
- Business cases (to be announced)
- Academic articles (to be announced)
Method of examination
The final grade consists of the following elements:
- Written closed-book test (60%). The written test (open questions and possibly multiple choice questions) will cover the material presented and discussed during lectures and tutorials and will be based on the textbook and other material used in this course.
- Assignments prepared in student teams (30%). Please adhere to the due dates provided. Submission delay will lead to grade reduction.
- Quality of team presentations and accompanying PowerPoint sheets (10%).
To be eligible to obtain a final grade, your written test grade needs to be at least 4.5. To pass this course, the final grade for this course has to be at least 5.5.
Composition final grade
Written closed-book test (60%).
Assignments prepared in student teams (30%).
Quality of team presentations and accompanying PowerPoint sheets (10%).
Minimum grade required
Opportunity to resit within the academic year
Form of examination (Open questions = OQ, Multiple choice = MC)
Written feedback by grading. Feedback during class and via Canvas.
- Broadening minor
- 10 weken
- Rotterdam School of Management, Erasmus University
- Studiepunten (EC)