FIN103 Financial Analysis and Valuation

This subject introduces students to the fundamentals of financial analysis and the various techniques to analyse company financial statements. The subject reviews the accounting and reporting regulatory framework, examines the components of financial reports and the information they can provide to investors, looks at how corporations are financed and explains dividend imputation. It examines the application of financial ratios and introduces students to fundamental valuation concepts and the process of undertaking a company valuation.

This subject is a core subject.

For more information, please refer to the subject outline.

  • Learning outcomes
    • On successful completion of this subject, students should be able to:

      1. Demonstrate an understanding of, and ability to apply, the financial reporting framework and key accounting concepts underpinning the preparation of financial statements.
      2. Critically evaluate a company’s high-level strategies and competitive position in the industry using the company’s annual report and other publicly available information.
      3. Calculate liquidity, working capital, gearing, profitability and market performance ratios using a company’s annual report.
      4. Critically evaluate the quality of liquidity, working capital, gearing, profitability and market performance ratios, both individually and as a group of ratios, including through the use of relevant information beyond a company’s annual report.
      5. Explain the different financing options available for a publicly listed company, identify the risks associated with each, and evaluate the impact on the company’s liquidity, working capital, gearing, profitability and market performance ratios.
      6. Calculate the financial ratios used in dividend analysis and explain how different types of shareholders’ tax position impacts on dividend yield.
      7. Calculate and evaluate price/earnings ratio for a publicly listed company.
      8. Provide an overall investment recommendation regarding a company’s shares based on the quantitative and qualitative analysis of the company performance, including its financial ratios, high-level strategies, competitive position and business risks.
  • Subject content
    • Topic Title
      Topic 1 Introducing financial analysis and valuation
      Topic 2 Understanding the annual report I
      Topic 3 Understanding the annual report II
      Topic 4 Financing of corporations
      Topic 5 Dividend imputation
      Topic 6 Corporate accounts – working capital ratios
      Topic 7 Corporate accounts – profitability ratios
      Topic 8 Corporate accounts – market performance ratios
      Topic 9 An introduction to valuation
  • Assessment
  • Prerequisites
    • Whilst there are no prerequisites for this subject, students are expected to be able to use basic financial maths in a variety of financial contexts. To test and refresh your maths knowledge click the link below:

      Basic Financial Maths

  • Course transition subject equivalence
    • Students are not required to complete this subject if they have transitioned from a SIA/Finsia/Kaplan course and have completed the following subjects within the course completion timeframe:

      • FIN113 Techniques in Financial Analysis
      • C2 Financial Analysis and Valuation
  • Reading list
    • There are no prescribed texts for this subject.

      Details of any required and further readings for this subject are provided in the subject room.  Purchase of any text other than a prescribed text is not required.