103-002-IO3 Equity Analysis
Study program: | International Finance (M.Sc.) |
Academic level and semester: | Master, 1st semester |
ECTS credits/workload per semester: | 2 / 50 |
Contact hours per week/contact hours per semester: | 2 / 25 |
Type/Teaching method: | Lecture |
| Language of instruction: | English |
Frequency: | Winter semester |
Lecturer: | Prof. Dr. Serge Ragotzky |
Content: | This lecture deals with the following topics: 1. The Purpose of Equity Analysis 2. Financial Statement Analysis 2.1. The basics: financial analysis as a prerequisite for financial planning 2.2. Liquidity 2.3. Operating performance 2.4. Risk analysis 2.5. Adjustments to corporate accounts 2.6. Derivation of free cash flow (FCF) 3. Financial Planning and Forecasting 3.1. Technical aspects of the planning process - top-down planning - closed-loop planning using spreadsheet models 3.2. Industry analysis and sales planning - Determinants of industry unit sales and price levels - The industry life cycle - Competition analysis 3.3. External factors and longer-term growth - External factors affecting longer-term growth perspectives - Modelling consistent long-term growth estimates: the DuPont system 4. Valuation 4.1. Valuation approaches 4.2. Discounted cash flow valuation - one-stage, two-stage, three-stage models - approaches to modelling the terminal value - comparison of dividend-discount, FCF-to-equity, and FCF-to-firm models - determining the discount rate 4.3. Relative valuation - Earnings-based, book value-based, revenue based, and sector specific multiples - Definitional, descriptional, analytical and application tests of multiples 5. Macroeconomic Aspects of Equity Analysis 5.1. Business cycle and asset allocation 5.2. Impact of macroeconomic factors on stock prices |
Textbooks: | Brown, Keith C., Reilly, Frank K. (2009): Analysis of Investments and Management of Portfolios, 9thedition, South-Western, Damodaran, Aswath (2002): Investment Valuation, 2ndedition, New York: John Wiley, Benninga, Simon (2008): Financial Modelling, 3rd edition, Cambridge: MIT Press |
Recommended for: | Undergraduates, graduates |
Prerequisites: | Background in Business/Economics, Finance and Accounting (intermediate level) |
Restrictions: | None |
Assessment: | Written exam |