FIN103 Financial Analysis and Valuation

This subject focuses on the fundamentals of financial analysis including techniques to analyse company financial statements. It reviews the accounting and reporting regulatory framework, examines the components of company financial reports and the information they provide to investors, and discusses how corporations are financed and returns provided to shareholders. It introduces fundamental valuation concepts and demonstrates financial statement analysis and the application of financial ratios in valuing a company for an investment recommendation. The use of both fictitious and real company financial statements provide opportunity for practical application of this learning.

This subject is a core subject.

For more information, please refer to the subject outline.

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

      1. Understand and apply the financial reporting framework and key accounting concepts that underpin the preparation of financial statements.
      2. Analyse 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 and analyse liquidity, working capital, gearing, profitability and market performance ratios using a company’s annual report and other relevant information.
      4. Explain the different financing options available for a publicly listed company, identify the risks associated with each, and analyse the impact on the company’s liquidity, working capital, gearing, profitability and market performance ratios.
      5. Calculate the financial ratios used in dividend analysis and explain how different shareholder tax positions impact on dividend yield.
      6. Calculate and analyse price/earnings ratio for a publicly listed company.
      7. Prepare 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
  • Duration
    • The duration of this subject is one study period (12 weeks).

  • Assessment
  • Prerequisites
    • There are no prerequisites for this subject. However, individuals should review the ‘Assumed Knowledge’ tab to understand the prior knowledge Kaplan advises they should hold before enrolling in this subject.

  • Assumed knowledge
    • Whilst there are no prerequisites for this subject, students are expected to be able to use basic financial math’s in a variety of financial contexts.

  • Course transition subject equivalence
    • Individuals may not be required to complete this subject if they have transitioned from a SIA/Finsia/Kaplan course and have completed the following subjects:

      • FIN113 Techniques in Financial Analysis
      • C2 Financial Analysis and Valuation
  • Reading list
    • There is no prescribed text for this subject. Individuals are provided with key readings and access to Kaplan’s online databases. Individuals are encouraged to research and read widely on the topic.