Department of Accounting, NCCU
Professor Robert K. Su
NATIONAL CHENGCHI UNIVERSITY
COLLEGE OF COMMERCE
DEPARTMENT OF ACCOUNTING
REGULAR MS PROGRAM
ADVANCED FINANCIAL STATEMENT ANALYSIS
AND BUSINESS VALUATION
FALL 2005
A. Instructor:
Professor Robert K. Su
Room 1109, 11th Fl., College of Commerce Bldg.
robert@nccu.edu.tw
2938-7345 (Phone), 2938-7345 (Fax)
Thursday: 14:10 - 17:00
Monday:
10:00 - 12:00
Wednesday: 16:00 - 18:00
And by appointment
B. Course Objectives
This course is designed to aid motivated graduate students with sufficient
accounting background in comprehending the theoretical concepts and practical
Office:
E-mail:
Phone/Fax:
Class Hours:
Office Hours:
techniques in analysis of financial statements and business value. Through the
lecture and discussion of text materials and research papers on certain accounting
topics and the use of real-world financial statements as case examples, this course
should help develop the student's ability to in depth analyze financial statements
and business value. After successfully completing this course, the student should
be able to apply the knowledge and techniques in the real world.
C. Books
1. Arzac, E. R. 2005, Valuation for Mergers, Buyouts, and Restructuring, N.Y.,
NY, USA: John Wiley & Sons, Inc.
2. Eccles, Robert. G., Robert. H. Herz, E. Mary Keegan and David M. H. Philips,
2001, The ValueReporting Revolution: Moving Beyond the Earnings Game,
John Wiley & Sons, Inc.
3. Fridson, M., and F. Alvarez, 2002, Financial Statement Analysis: A
Practitioner’s Guide, 3rd Ed., N.Y., NY, USA: John Wiley & Sons, Inc.
4. Mard, M. J., J. R. Hitchner, S. D. Hyden and M. L. Zyla, 2002, Valuation for
Financial Reporting: Intangible Assets, Goodwill, and Impairment Analysis,
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Professor Robert K. Su
SFAS 141 and 142, N.Y., NY, USA: John Wiley & Sons, Inc.
5. McKinsey & Company, Inc., T. Copeland, T. Koller, and J. Murrin, 2000,
Valuation: Measuring and Managing the Value of Companies, 3rd Ed., N.Y.,
NY, USA: John Wiley & Sons, Inc.
6. Mulford, C. W. and E. E. Comiskey, 2002, The Financial Numbers Game, N.Y.,
NY, USA: John Wiley & Sons, Inc.
7. Palepu, K. G., P. M. Healy and V. L. Bernard, 2004, Business Analysis and
Valuation, 3rd Ed., Mason, OH, USA: South-Western College Publishing.
(Textbook)
8. Penman, S. H., 2003, Financial Statement Analysis and Security Valuation, 2nd
Ed., N.Y., NY, USA: The McGraw-Hill, Companies.
9. Pratt, S. P., 2001, Business Valuation he Analysis and Use of Financial
Statements, N.Y., NY, USA: John Wiley & Sons, Inc.
10. Pratt, S. P., 2002, Cost of Capital: Estimation and Applications, Hoboken, NJ,
USA: John Wiley & Sons, Inc.
11. Schilit, H., 2002, Financial Shenanigans, 2nd Ed., N.Y., NY, USA: The
McGraw-Hill, Companies.
12. White, G., A. Sondhi, and D. Fried, 2003, The Analysis and Use of Financial
Statements, 3rd Ed., Hoboken, NJ, USA: John Wiley & Sons, Inc.
13. Wild, J., L. Bernstein, and K. R. Subramanyam, 2001, Financial Statement
Analysis, 7th Ed, N.Y., NY, USA: The McGraw-Hill, Companies.
D. Grading Policy
1. Final tests (Comprehensive, take-home) --------- 50%
Case presentations and reports ------------------- 40%
Evaluation and/or Homework -------------------- 10%
Total
100%
2. You are encouraged to discuss any grading errors with the instructor so that you
can receive all of the points that you have earned. However, grading errors will
be corrected only for tests submitted for re-grading within one week of the date
they are returned to you.
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Professor Robert K. Su
E. Important Notes and Policies
1. Tests must be taken as scheduled. No makeup test will be given. Missed tests
will count as zero unless absence is authorized in advance by this instructor.
Please feel free to call me at 2938-7345, email me at robert@nccu.edu.tw, or
come see me in my office, to discuss your needs.
2. Presentations must be made as scheduled. Rescheduling is not welcome. Missed
presentations will also count as zero unless absence is authorized in advance by
this instructor.
3. Bring a hand calculator for each meeting.
4. You are expected to be an active learner and therefore to read the assigned
materials before the class meets.
5. Class participation will be expected of all students.
6. The assignments and the class schedule may be modified, if necessary, at this
instructor's discretion.
7. To show your respect for your own rights and your classmates’ right to
education, please silence all telecommunication devices when the class is in
session.
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CLASS SCHEDULE
Week Date Chapter
1
09/15
Subjects and Assignments
Introduction to the Course
Part I: Framework
2
09/22 1
Part II: Tools
3
09/29 2
Framework for Business Analysis and Valuation Using
Financial Statements
Strategy Analysis
4
5
6
10/06
10/13
10/20
3
4
4
Overview of Accounting Analysis
Implementing Accounting Analysis
Implementing Accounting Analysis
7
8
9
10
10/27
11/03
11/10
11/17
5
6
7
8
Financial Analysis
Prospective Analysis: Forecasting
Prospective Analysis: Valuation Theory and Concepts
Prospective Analysis: Valuation Implementation
Part III: Applications
11 11/24 9
12
13
14
Equity Security Analysis
12/01 10
12/08 11
12/15 12
Credit Analysis and Distress Prediction
Mergers and Acquisitions
Corporate Financial Policies
Part IV: Cases
15 12/22 13
16 12/29
17 01/05
18 01/12
Communication and Governance
Presentations: C1 & C2
Presentations: C3 & C4
Take-home final test (Comprehensive)
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Professor Robert K. Su
CASE STUDY AND PRESENTATION
I. Cases: To be discussed in class.
1.
2.
3.
4.
D1:
F1:
D2:
F2:
II. Rules
A. Grouping and case assignment
1. The class is to be equally divided into four groups based on participants'
preferences after the add/drop period.
2. Each group is required to present on one case.
3. The four cases will be randomly assigned to the groups.
4. Each case presentation is to be made by one independent group, but discussion
is expected of the entire class.
B. Methods and Coverage
1. Each presentation is to be delivered both orally and in writing.
2. Each oral presentation on the case should cover the followings within the
specified time slots in a total of 70 minutes. Overrunning the time will lead to
loss of credit.
a. 5 minutes: General description of the firm
b. 10 minutes: Operating environment and the firm’s competitive advantages
c. 30 minutes: 5-year analysis and comparison with its industry or competitor
d. 15 minutes: Reasonable stock price range
e. 1 minute: Key learnings
f. 9 minutes: Floor questions and answers
3. Each written report is due at the time of the oral presentation and should be
typed (double-spaced) and cover the same subject matters as the oral
presentation in the following format.
a. 1 cover page
b. 1 page for table of content
c. No more than 10 pages of text
d. No more than 10 pages of graphs and tables
e. No more than 2 pages of reference
f. A copy of the case company's financial statements
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Professor Robert K. Su
4. The analysis and report should be done digitally; the use of auxiliary facility at
the oral presentation is recommended.
5. Each presenting group should email the instructor the PowerPoint and Word
files one day before the presentation. Sharing the files with classmates is
encouraged.
6. Each presenting group should distribute a 2-page handout to the classmates
before the presentation.
7. Rehearsals are highly recommended and discussions with the teacher, of course,
are greatly welcome.
C. Evaluation
1. Oral presentation
a. Preparation
(30%)
b. Skill
(25%)
c. Content
(30%)
d. Response (15%)
2. Written report, due at the time of the oral presentation
a. Skill
(30%)
b. Content
(70%)
3. A group score will be assigned to each presenting group.
4. Member score: If every member of the group agrees, each member of the group
will receive the same score. In case of a dispute among the members, a
self-and-peer-evaluation will be conducted to determine the relative
contribution of each member to the presentation. Each member will then receive
a score computed based on her (his) contribution.
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Professor Robert K. Su
PRESENTATION EVALUATION SHEET
Date:
no
Case:
Group:
Equal Contribution: ( ) yes, ( )
Members:
ID No.
Name
1.
2.
3.
4.
5.
6.
7.
8.
Part 1: Oral
%
1. Preparation
(30%)
2. Skill
(25%)
3. Content
(30%)
4. Response
(15%)
Total
Score
(100%)
Part 2: Written
1. Skill
(30%)
2. Content
(70%)
Total
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(100%)
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