Inancial statement analysis and Valuation: assignment

Some Guidelines for the Assignment Report

Formal Requirements

You are required to deliver a project that involves financial analysis and uses tools developed in the course.

The Form of the Project

We don t require any particular format. The standard approach is to have an executive summary, an analysis of the industry, the business model and the firm s history, followed by the financial statement analysis, the forecasting and the valuation. While these elements should be there, don t be too mechanical. Creativity in presentation will be rewarded.

The most important point is to write a persuasive report that leads to a credible conclusion or investment recommendation. The reader wants to see that you know what you are talking about, that you are a thorough and insightful analyst. The reader will want to see that you have the necessary understanding and are using the appropriate tools.

Resources

A historical financial statement analysis is needed in most cases, as a base for forecasting. Three to five years is usually sufficient to get a feel for the drivers, less if there has been a major change in the direction of the business.

Pro forma analysis (Chapter 15 of the text: Penman, S.H. (2009) Financial Statement Analysis and Security Valuation, 4th Ed., McGraw-Hill.) is central in most cases. Work back through the tools from there. Think of adding sensitivity analysis (Chapter 18: Penman, S.H. (2009). Financial Statement Analysis and Security Valuation, 4th Ed., McGraw-Hill.),valuation grids, earnings quality analysis, simple forecasting.
You may use, Penman, S.H. (2009) Financial Statement Analysis and Security Valuation, 4th Ed., McGraw-Hill ( If possible as it may help you)

The referencing method is Havard system.