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Year of entry: 2024
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Course unit details:
Corporate Financial Communication and Valuation
|Available as a free choice unit?
This course unit is explicitly skills-based. It provides an opportunity to apply existing knowledge from other course units in accounting and finance, as well as other subjects you may have studied. It also presents new ideas and material intended specifically to help you develop and enhance your skills of research and analysis.
The course unit is research-based, with the work carried out in groups in semester 1 and individually in semester 2. It is crucial for you to recognise that the key focal points of this course unit are the researching, preparation and submission of the assessed pieces of work. As the assessment for this course unit is based upon a group project and an individual project, both requiring the integrative application of existing and new knowledge, it is the independent undertaking of these two assessments that is the main driving force on this course unit, and these two assessments are entirely your responsibility, whether working with other students in your project group in semester 1, or individually in semester 2.
Note that the Semester 1 group valuation project represents a 'classic' accounting valuation project, the underlying theoretical positions and methodological approaches of which are then subject to critique and development via the individual project; which allows students to form their own judgement as to how an accounting valuation and/or investment analysis project should be conducted (and defended and justified) with the more ‘free flowing’ and critical spirit providing students with the opportunity to intellectually challenge, express and demonstrate their self-development and application capacity.
Tutorials are used at appropriate staging posts or points in the course, providing sounding boards for the development of ideas and appropriate guidance on how to approach and organise the project assignments. While guidance and feedback is given to assist students, the two assessments remain entirely a responsibility of the student.
The course will include lecture presentations by the two lecturers.
Online information about the course will be available on Blackboard. This will include the course description, lecture notes, and other support materials.
Pre-requisites: Completion of the second year of the BSc Accounting program.
The course aims to:
1. introduce the concept of comprehensive financial statement analysis comprising four components: business strategy analysis, accounting analysis, financial analysis, forecasting and valuation;
2. develop the theoretical relationships between accounting numbers and stock market values;
3. develop an understanding of the usefulness of financial accounting information from evidence in the field;
4. develop the theoretical foundations of research on financial communication;
5. develop an understanding of the determinants and economic consequences of corporate social responsibility reporting;
6. introduce the experience of working on a group project;
7. challenge you technically and intellectually in order to prepare you for a demanding research role, eg a MSc or PhD, or complex and challenging work environment.
On successful completion of this course unit students will be able to:
1. understand the four components of a comprehensive financial statement analysis, including the links between the four components;
2. explain the principles of using accounting and other information to value a company;
3. critically evaluate the usefulness of financial accounting information for investors;
4. understand and discuss the formal and informal processes companies use to communicate with investors;
5. understand and discuss determinants and real effects of corporate social responsibility reporting;
6. demonstrate an ability to work as a member of a team in the context of a company valuation exercise; and
7. demonstrate an ability to put into practice transferable skills such as team working, project management, time management, assimilation of complex management information and business report writing.
Teaching and learning methods
Lectures: 18 one-hour lectures in Semester 1; 18 one-hour lectures in Semester 2;
Tutorials: 4 one-hour tutorials in Semester 1 Total study: 400 hours split between lectures, tutorials, self-study, reading, and team meetings.
Informal Contact Methods
1. Office Hours
Group valuation project (33%)
Individual project report (67%)
Feedback to Students
Verbal feedback on group project presentations will be provided during the four tutorials in Semester 1. In addition, students will get written feedback on their assessed group valuation report early in the New Year. Generic feedback on individual project will be provided in lectures in Semester 2. Students will be able to attend office hours to discuss their questions and progress with course unit directors. Feedback for all formative assessment is returned within 15 working days of the submission deadline. A working day is defined as Monday to Friday, not including bank holidays and excluding student vacation periods and University examination periods.
Feedback from Students
Students will be requested to complete a course unit evaluation form towards the end of both semester 1 and semester 2, which will be used for the purposes of course unit review and development. Students are also welcome to provide informal feedback to the lecturers at any time and the final session of the course unit will also include an opportunity for feedback and comments.
The main textbook recommended for work in the first semester is:
K Palepu, PM Healy, & E Peek, Business Analysis and Valuation, IFRS Standards Edition, Cengage Learning – third (2013) or fourth (2016) or fifth (2019) or sixth (2022) edition.
The supplementary book reading comes from:
S. Penman, Financial Statement Analysis and Company Valuation, McGraw Hill, second edition or later.
J.B. Barney and D.N. Clark, Resource-Based Theory, Oxford University Press, 2007, available as an e-book in the library.
The following journal articles are relevant:
For lectures on the individual project in Semester 2:
Cascino, S., Clatworthy, M., Osma, BG., Gassen, J. & Imam, S. (2020). The Usefulness of Financial Accounting Information: Evidence from the Field. Available at SSRN: http://dx.doi.org/10.2139/ssrn.3008083.
Cascino, S., Clatworthy, M., Osma, BG., Gassen, J., Imam, S. & Jeanjean, T. (2014). Who Uses Financial Reports and for What Purpose?: Evidence from Capital Providers. Accounting in Europe, vol 11., pp. 185-209.
Beyer, A., Cohen, DA., Lys, TZ. & Walther, BR. (2010). The Financial Reporting Environment: Review of the Recent Literature, Journal of Accounting and Economics, Vol. 50, pp. 296-343.
Christensen, H, Luzi, BH & Christian L (2019). Adoption of CSR and Sustainability Reporting Standards: Economic Analysis and Review. Available at SSRN: http://dx.doi.org/10.2139/ssrn.3427748
Other references will be provided via the lecture presentations and should be followed up.
Other essential material comes from:
Analysts’ Reports are available from Eikon (formerly Thomson One). Students are reminded that it is essential to cite any material they use from such reports.
Supplementary study notes prepared by the two lecturers are available from Blackboard.
|Scheduled activity hours
|Independent study hours
Staff involved: Dr Thomas Schleicher & Dr Wei Jiang.
Pre-requisites: Completion of the second year of the BSc Accounting Program.
Dependent courses: None.
Programme Restrictions: Available only to BSc Accounting students.
For Academic Year 2023/24
Updated: March 2023
Approved by: March UG Committee