Prerequisites: None

Exam Type: No Exam

This 3-unit spring course is designed to help students develop business valuation and related business analysis skills. The following topics will be covered: how a firm’s business strategy and its operating and financial characteristics affect its valuation; review of basic corporate financial reports and disclosures that serve as inputs to valuation analysis; use of financial ratios in valuation to measure financial risks and returns; analysis of financial disclosures to identify valuation red flags such as quality of earnings; valuation of taxes, intangibles, and financial investments; forecasting financial statements and cash flows for valuation; and integrating the above tools and techniques to determine the valuation of a firm’s equity. Students will learn common valuation methods such as discounted cash flow analysis and supplement them with other methods used in practice, including earnings-based valuation, the use of valuation multiples, and comparable transactions analysis. Examples involving valuation disputes and controversies in practice will be used to illustrate implementation issues in valuation and how they are resolved by courts and transaction advisors.

Class and homework assignments will be used to help students apply valuation and business analysis tools and techniques to real-life corporate examples. Active class participation is required. There is no final exam. Instead, there will be a final valuation project requiring students to analyze a selected company’s business strategy and the quality of its financial statements, uses these as inputs to forecast financial statements and cash flows, and write up a detailed valuation report focusing on the company’s future prospects.

The course will be relevant for students in the Law and Business program of study, and to others who wish to prepare for careers in capital markets, corporate transactions, commercial litigation, mergers and acquisitions, and other related areas.