Lecturer in charge	Mr Brian Millanta
Availability	D1 - Day; Offered in the first half-year D2 - Day; Offered in the second half-year E2 - Evening; Offered in the second half-year
Unit Outline	2008 - Semester 1 2007 - Semester 2 2007 - Semester 1
Websites	Handbook entry Coursework unit website - Online learning @ MQ (Login required)

Also refer to the MCom + MIB Student Guide

Description

A principal focus of the unit is the analysis of financial information - particularly firms’ financial statements – as a basis for making financial decisions, including the decision to invest. Important concerns are equity valuation and methods of fundamental analysis. The unit does not assume market efficiency. Rather, it develops techniques for challenging market prices in order to assess whether investments are appropriately priced. It adopts the philosophy that one of the risks in investing is the risk of paying too much. Topics include models of shareholder value, a comparison of accrual accounting and discounted cash flow approaches to valuation, the analysis of profitability, growth and value generation in a firm, evaluation of accounting quality, forecasting earnings and cash flows, and determination of the drivers of price/earnings (P/E) and market-to-book (P/B) ratios. Although the core of the unit is a framework for estimating the value of publicly-traded equity securities, a number of other issues may be canvassed, including the role of financial information in contracting; credit risk assessment; and research on the relation between earnings and equity valuation. Students employ the techniques considered in the course in completing a group project which requires analysis and valuation of a major Australian listed company.