AGSM9138 Financial Analysis - 2022

Subject Code
AGSM9138
Study Level
Postgraduate
Commencing Term
Term 3
Total Units of Credit (UOC)
6
Delivery Mode
Online Weekly
School
AGSM

1. Course Details

Summary of Course

This course focuses on the analysis of financial information arising primarily from the financial reports of firms. Fundamental analysis techniques are examined in detail, with particular emphasis on the application of these techniques in equity (share) valuation decisions. Attention is also given to credit assessment and debt valuation decisions. The techniques are applied in cases and projects involving listed companies. Topics considered include fundamental ratio analysis using reported financial information, and an
analysis of accrual accounting and cash flows. You will undertake a structured analysis of profitability, growth and value generation in a firm, and develop forecasts of earnings and cash flows and use those forecasts in the context of both equity valuation and credit analysis. There is a specific focus on data analytics throughout the course.

The course follows a structured approach to provide you with a set of analytical tools to become more effective users of financial statements. The course has the following structure:

  1. Business Strategy Analysis - understanding the industry conditions a firm faces and its competitive positioning within the industry
  2. Accounting and Disclosure Analysis - understanding the extent to which the financial statements and non-financial information do a good or a bad job in reflecting the underlying economics of the business
  3. Financial Analysis - analysing recent performance using a ratio analysis in a systematic manner
  4. Prospective Analysis - making forecasts of future performance taking into account our first three analytical steps and incorporating those forecasts into a valuation model. We then use this 'toolbox' in a variety of contexts, including equity security analysis and credit analysis.

Teaching Times and Locations

Please note that teaching times and locations are subject to change. Students are strongly advised to refer to the Class Timetable website for the most up-to-date teaching times and locations.

View course timetable

Course Policies & Support

Course Aims and Relationship to Other Courses

Financial Analysis brings together areas of financial accounting, finance and strategic management. Because of the interdisciplinary nature of the course, this course aims to synthesise and apply what you have learned in your introductory Accounting and introductory Corporate Finance courses, and to further develop you for your professional career. This course is a very useful preparatory course for the CFA, CA and CPA programs. Due to the applied nature of the course, ti is helpful to those contemplating careers in business or strategic consulting, investment banking, security analysis, funds management, corporate finance and public accounting. The course also has wide application in personal investment activities. 

The tools developed in Financial Analysis will be applicable to, and helpul in, courses such as AGSM9141 Mergers and Acquisitions. Analysing and assessing the value of M&A transactions is one specific application of financial-analysis knowledge. However, AGSM9141 focuses not just on M&A valuation, but also on the regulatory framework and transaction structuring and specific strategic considerations for M&As that are beyond the scope of this Financial Analysis course.  

The core Accounting and Financial Management and Corporate Finance courses are pre-requisites for this course.

Additional Course Details

3. Staff Contact Details

Position Name Email Location Phone Consultation Times
FacilitatorJeff Coulton
+61293855811Dr Coulton will outline the best ways to communicate with him and other course participants via the Course Moodle page in the week prior to Term commencing.

Facilitator in Charge

Each course has a Facilitator in Charge who is responsible for the academic leadership and overall academic integrity of the course. The Facilitator in Charge selects content and designs assessment tasks, and takes responsibility for specific academic and administrative issues related to the course. Facilitators in Charge oversee Facilitators and ensure that the ongoing standard of facilitation in the course is consistent with the quality requirements of the program.

Facilitator

The role of your Facilitator is to support and enhance the learning process by encouraging interaction among participants, providing direction in understanding the course content, assessing participant progress through the course and providing feedback on work submitted. Facilitators comprise academics and industry practitioners with relevant backgrounds.

4. Learning and Teaching Activities

Approach to Learning and Teaching in the Course

This course helps you to apply the accounting knowledge and skills you acquired in previous courses to analyse and determine the value of a company in the real business world. We will explain basic techniques and principles of financial statement analysis in pre-recorded videos, the course eBook and in the online discussion forums. We will use case studies and current business examples to illustrate how to analyse and value a business. To gain most from this course, you are encouraged to think critically and participate actively in the online class discussion. You also need to develop an appreciation of the link between qualitative and quantitative analysis. To achieve this, preparation by working through each Unit prior to the week in which we will cover it in class is essential. You will also have a chance to analyse and value a real company, which requires you to take initiative and work effectively in a group environment. 

Learning Activities and Teaching Strategies

Learning resources

You have three major resources to support your learning in this Course:

  1. The course materials (eBook) comprising Units 1 to 10, the Course Outline and the Assessment Details. You will do much of your learning independently by working through the course materials and completing the activities in them as well as the assessment tasks in the course.  
  2. The learning activities set by your Facilitator for each Unit. Your Facilitator will set a mixture of online discussions and quizzes as appropriate for each of the Units in the course. The Facilitator's job is to facilitate your learning by facilitating the discussion, answering questions that might arise and providing insights from their own practical experience and understanding of theory, as well as providing you with feedback on your assessments.
  3. Your co-participants. Your colleagues in the course are an invaluable potential source of learning for you. Their work and life, and industries and their willingness to question and argue with the course materials, the Facilitator and your own views, represent a great learning opportunity. Your class colleagues bring much valuable insight to the learning experience. You can use this course to take a major step in broadening your appreciation of financial analysis.

General Strategy

An 'ideal' weekly study strategy (on which the provision of course materials is based) might look like the following:
1. Watch the short video on that topic
2. Read the relevant Unit in the eBook
3. Attempt any assigned pre-work for the week.

This helps you to identify issues that need to be clarified or resolved. Also, prepare for discussions online with your cohort and/or project team during the week. Where you can see there is a question on the discussion forums you can answer, we strongly encourage you to do so. This is particularly valuable if you can bring insights from your work experience as to how the course materials and concepts are used in the 'real world'. 

Course Structure

Unit 1: Financial statements, corporate disclosures and fundamental analysis

This unit provides an overview of the analytical tools you will use and develop over the course, and introduces you to the various online databases and information sources that you will use to obtain financial and non-financial information. 

Unit 2: Strategy analysis 

In this unit you consider the role of industry analysis and a company's competitive positioning in an industry. You will consider the extent to which a firm's strategy is likely to be reflected in its financial statements, and to form a view about the extent of future growth and profitability of the firm.

Unit 3: Accounting analysis

The purpose of accounting analysis is to evaluate the extent to which a firm's financial statements do a good or bad job of reflecting the underlying business reality. You will consider the range and types of financial statements and factors that influence them. You will then consider the process of accounting analysis, and identify the appropriateness of a firm's accounting policies, estimates and disclosures. 

Unit 4: Corporate disclosures: analysing non-financial disclosures, governance and earnings forecasts 

Analysis of firm performance requires analysing a broader information set than the financial statements alone. This week you examine the role of disclosures - of both financial and non-financial information. The disclosure of ESG information is a key consideration, and has become increasingly important to various firm stakeholders.

Unit 5: Financial analysis: structured assessment of recent performance 

The goal of financial analysis is to assess the performance of a business in the context of its stated goals and strategy. Ratio analysis involves assessing how various line items in a firm's financial statements relate to one another, while cash-flow analysis allows an analyst to examine the firm's liquidity, and to assess the management of operating, investment and financing cash flows. Ratio analysis provides the foundation for making forecasts of future financial performance.

Unit 6: Forecasting

This unit focuses on improving your forecasting of financial statements. Most financial statement analysis tasks are undertaken with a forward-looking decision in mind. Managers need forecasts in their business plans, analysts need forecasts to help communicate their views about a firm to investors, and bankers and debt market participants need forecasts to assess the likelihood of loan repayment.

Unit 7: Valuation 

Valuation is the process of converting a forecast into an estimate of the value of the firm or some component of the firm. In practice, analysts employ a variety of valuation approaches. Over the next two units, you will be introduced to a number of valuation models. In Unit 7 you will focus on discounted cash flow and abnormal earnings-based valuation models, which use the same set of forecasts you develop in previous units. 

Unit 8: Valuation: using multiples and 'hard-to-value' businesses 

This week, you will continue your examination of valuation models and metrics including the price-earnings (P/E) ratio and EV/EBITDA multiples-based valuation. You will also consider what to do next now that you have determined your valuation of a firm, including consideration issues of market efficiency and how these affect your valuation. You will also identify some of the issues that arise in valuing new companies and technology or service-based companies.

Unit 9: Equity security analysis

Equity security analysis involves evaluating a firm and its prospects from the perspective of a current or potential investor in the firm's shares. Security analysis is one step in a larger investment process that involves (i) establishing the objectives of the investor; (ii) forming expectations about future risk and returns of individual securities; and (iii) combining individual securities into portfolios to maximise the chances of achieving the investment objectives.

Unit 10: Credit analysis

Credit analysis is the evaluation of a firm from the perspective of a holder or potential holder of its debt, such as trade payables, loans and listed debt securities. A key element of credit analysis is predicting the likelihood that the lender will receive timely repayment of interest and principal. 

6. Course Resources

The primary course resource will be the eBook which provides introductory readings and activities in weekly Units. Short videos will also be provided to give an overview of each Unit, as well as demonstrate specific applications of the course 'toolkits'. There is no prescribed textbook for this course. 

You will be introduced to various online databases available through the UNSW Library website and elsewhere, and the analysis of data forms a key part of the course. 

For most Units, you will also be provided with additional business media articles or clips that highlight how the course material is reported on in the business world. 

7. Course Evaluation & Development

Continual Course Improvement

AGSM courses are reviewed each time they run, with updated course outlines and assessment tasks developed.

Additionally, the AGSM surveys students each time a course is offered. The data collected provides anonymous feedback from students on the quality of course content and materials, class facilitation, student support services and the program in general. This student feedback is considered during all course revisions.

Student Response

This course has been fully revised for Term 3 2022.

Response to Student Feedback

Please see above.

8. Course Schedule

Week Activity Topic Detail/Engagement Assessment Task
Week 1 Orientation to online course sites and activitiesIntroduction to financial analysis
Assessment 1 : Weekly reflection on course materials
Week 2 Work through online course content/activitiesStrategy analysis
Assessment 1 : Weekly reflection on course materials
Week 3 Work through online course content/activitiesAccounting analysis
Assessment 1 : Weekly reflection on course materials
Assessment 2 : Major Project Part B: Group Report
Week 4 Work through online course content/activitiesCorporate disclosures

Assessment 2 Part A: Individual Report due on Tuesday 4 October 2022 by 3pm Sydney time

Assessment 1 : Weekly reflection on course materials
Assessment 2 : Major Project Part A: Individual Report
Week 5 Work through online course content/activitiesFinancial analysis
Assessment 1 : Weekly reflection on course materials
Week 6 Work through online course content/activitiesForecasting
Assessment 1 : Weekly reflection on course materials
Week 7 Work through online course content/activitiesValuation
Assessment 1 : Weekly reflection on course materials
Week 8 Work through online course content/activitiesValuation multiples and hard to value companies

 

 

Assessment 1 : Weekly reflection on course materials
Assessment 2 : Major Project Part B: Group Report
Week 9 Work through online course content/activitiesEquity security analysis

Assessment 2 Part B: Group Report due Friday 11 November by 3pm Sydney time

Assessment 1 : Weekly reflection on course materials
Assessment 2 : Major Project Part B: Group Report
Week 10 Work through online course content/activitiesCredit analysis

Assessment 2 Part C: Video presentation due on Wednesday 16 November 2022 by 3pm Sydney time

Assessment 1 : Weekly reflection on course materials
Assessment 2 : Major Project Part C: Video Presentation
Week 11 Study for final assessment task

Assessment 3 questions released by 3pm on Monday 25 November 2022

Week 12 Complete and submit final assessment task

Assessment 3 due on Monday 28 November 2022 by 3pm Sydney time

Assessment 3 : Final assessment

9. Policies and Support

Information about UNSW Business School protocols, University policies, student responsibilities and education quality and support.

Program Learning Outcomes

The Business School places knowledge and capabilities at the core of its curriculum via seven Program Learning Outcomes (PLOs). These PLOs are systematically embedded and developed across the duration of all coursework programs in the Business School.

PLOs embody the knowledge, skills and capabilities that are taught, practised and assessed within each Business School program. They articulate what you should know and be able to do upon successful completion of your degree.

Upon graduation, you should have a high level of specialised business knowledge and capacity for responsible business thinking, underpinned by ethical professional practice. You should be able to harness, manage and communicate business information effectively and work collaboratively with others. You should be an experienced problem-solver and critical thinker, with a global perspective, cultural competence and the potential for innovative leadership.

All UNSW programs and courses are designed to assess the attainment of program and/or course level learning outcomes, as required by the UNSW Assessment Design Procedure. It is important that you become familiar with the Business School PLOs, as they constitute the framework which informs and shapes the components and assessments of the courses within your program of study.

PLO 1: Business knowledge

Students will make informed and effective selection and application of knowledge in a discipline or profession, in the contexts of local and global business.

PLO 2: Problem solving

Students will define and address business problems, and propose effective evidence-based solutions, through the application of rigorous analysis and critical thinking.

PLO 3: Business communication

Students will harness, manage and communicate business information effectively using multiple forms of communication across different channels.

PLO 4: Teamwork

Students will interact and collaborate effectively with others to achieve a common business purpose or fulfil a common business project, and reflect critically on the process and the outcomes.

PLO 5: Responsible business practice

Students will develop and be committed to responsible business thinking and approaches, which are underpinned by ethical professional practice and sustainability considerations.

PLO 6: Global and cultural competence

Students will be aware of business systems in the wider world and actively committed to recognise and respect the cultural norms, beliefs and values of others, and will apply this knowledge to interact, communicate and work effectively in diverse environments.

PLO 7: Leadership development

Students will develop the capacity to take initiative, encourage forward thinking and bring about innovation, while effectively influencing others to achieve desired results.

These PLOs relate to undergraduate and postgraduate coursework programs.  Separate PLOs for honours and postgraduate research programs are included under 'Related Documents'.

Business School course outlines provide detailed information for students on how the course learning outcomes, learning activities, and assessment/s contribute to the development of Program Learning Outcomes.

RELATED DOCUMENTS

 

UNSW Graduate Capabilities

The Business School PLOs also incorporate UNSW graduate capabilities, a set of generic abilities and skills that all students are expected to achieve by graduation. These capabilities articulate the University’s institutional values, as well as future employer expectations.

UNSW Graduate CapabilitiesBusiness School PLOs
Scholars capable of independent and collaborative enquiry, rigorous in their analysis, critique and reflection, and able to innovate by applying their knowledge and skills to the solution of novel as well as routine problems.
  • PLO 1: Business knowledge
  • PLO 2: Problem solving
  • PLO 3: Business communication
  • PLO 4: Teamwork
  • PLO 7: Leadership development

Entrepreneurial leaders capable of initiating and embracing innovation and change, as well as engaging and enabling others to contribute to change
  • PLO 1: Business knowledge
  • PLO 2: Problem solving
  • PLO 3: Business communication
  • PLO 4: Teamwork
  • PLO 6: Global and cultural competence
  • PLO 7: Leadership development

Professionals capable of ethical, self-directed practice and independent lifelong learning
  • PLO 1: Business knowledge
  • PLO 2: Problem solving
  • PLO 3: Business communication
  • PLO 5: Responsible business practice

Global citizens who are culturally adept and capable of respecting diversity and acting in a socially just and responsible way.
  • PLO 1: Business knowledge
  • PLO 2: Problem solving
  • PLO 3: Business communication
  • PLO 4: Teamwork
  • PLO 5: Responsible business practice
  • PLO 6: Global and cultural competence

While our programs are designed to provide coverage of all PLOs and graduate capabilities, they also provide you with a great deal of choice and flexibility.  The Business School strongly advises you to choose a range of courses that assist your development against the seven PLOs and four graduate capabilities, and to keep a record of your achievements as part of your portfolio. You can use a portfolio as evidence in employment applications as well as a reference for work or further study. For support with selecting your courses contact the UNSW Business School Student Centre.




Academic Integrity and Plagiarism

Academic Integrity is honest and responsible scholarship. This form of ethical scholarship is highly valued at UNSW. Terms like Academic Integrity, misconduct, referencing, conventions, plagiarism, academic practices, citations and evidence based learning are all considered basic concepts that successful university students understand. Learning how to communicate original ideas, refer sources, work independently, and report results accurately and honestly are skills that you will be able to carry beyond your studies.

The definition of academic misconduct is broad. It covers practices such as cheating, copying and using another person’s work without appropriate acknowledgement. Incidents of academic misconduct may have serious consequences for students.

Plagiarism

UNSW regards plagiarism as a form of academic misconduct. UNSW has very strict rules regarding plagiarism. Plagiarism at UNSW is using the words or ideas of others and passing them off as your own. All Schools in the Business School have a Student Ethics Officer who will investigate incidents of plagiarism and may result in a student’s name being placed on the Plagiarism and Student Misconduct Registers.

Below are examples of plagiarism including self-plagiarism:

Copying: Using the same or very similar words to the original text or idea without acknowledging the source or using quotation marks. This includes copying materials, ideas or concepts from a book, article, report or other written document, presentation, composition, artwork, design, drawing, circuitry, computer program or software, website, internet, other electronic resource, or another person's assignment, without appropriate acknowledgement of authorship.

Inappropriate Paraphrasing: Changing a few words and phrases while mostly retaining the original structure and/or progression of ideas of the original, and information without acknowledgement. This also applies in presentations where someone paraphrases another’s ideas or words without credit and to piecing together quotes and paraphrases into a new whole, without appropriate referencing.

Collusion: Presenting work as independent work when it has been produced in whole or part in collusion with other people. Collusion includes:

  • Students providing their work to another student before the due date, or for the purpose of them plagiarising at any time
  • Paying another person to perform an academic task and passing it off as your own
  • Stealing or acquiring another person’s academic work and copying it
  • Offering to complete another person’s work or seeking payment for completing academic work

Collusion should not be confused with academic collaboration (i.e., shared contribution towards a group task).

Inappropriate Citation: Citing sources which have not been read, without acknowledging the 'secondary' source from which knowledge of them has been obtained.

Self-Plagiarism: ‘Self-plagiarism’ occurs where an author republishes their own previously written work and presents it as new findings without referencing the earlier work, either in its entirety or partially. Self-plagiarism is also referred to as 'recycling', 'duplication', or 'multiple submissions of research findings' without disclosure. In the student context, self-plagiarism includes re-using parts of, or all of, a body of work that has already been submitted for assessment without proper citation.

To see if you understand plagiarism, do this short quiz: https://student.unsw.edu.au/plagiarism-quiz

Cheating

The University also regards cheating as a form of academic misconduct. Cheating is knowingly submitting the work of others as their own and includes contract cheating (work produced by an external agent or third party that is submitted under the pretences of being a student’s original piece of work). Cheating is not acceptable at UNSW.

If you need to revise or clarify any terms associated with academic integrity you should explore the 'Working with Academic Integrity' self-paced lessons available at: https://student.unsw.edu.au/aim.

For UNSW policies, penalties, and information to help you avoid plagiarism see: https://student.unsw.edu.au/plagiarism as well as the guidelines in the online ELISE tutorials for all new UNSW students: http://subjectguides.library.unsw.edu.au/elise. For information on student conduct see: https://student.unsw.edu.au/conduct.

For information on how to acknowledge your sources and reference correctly, see: https://student.unsw.edu.au/referencing. If you are unsure what referencing style to use in this course, you should ask the lecturer in charge.


Student Responsibilities and Conduct

​Students are expected to be familiar with and adhere to university policies in relation to class attendance and general conduct and behaviour, including maintaining a safe, respectful environment; and to understand their obligations in relation to workload, assessment and keeping informed.

Information and policies on these topics can be found on the 'Managing your Program' website.

Workload

It is expected that you will spend at least ten to twelve hours per week studying for a course except for Summer Term courses which have a minimum weekly workload of twenty to twenty four hours. This time should be made up of reading, research, working on exercises and problems, online activities and attending classes. In periods where you need to complete assignments or prepare for examinations, the workload may be greater. Over-commitment has been a cause of failure for many students. You should take the required workload into account when planning how to balance study with employment and other activities.

We strongly encourage you to connect with your Moodle course websites in the first week of semester. Local and international research indicates that students who engage early and often with their course website are more likely to pass their course.

View more information on expected workload

Attendance

Your regular and punctual attendance at lectures and seminars or in online learning activities is expected in this course. The Business School reserves the right to refuse final assessment to those students who attend less than 80% of scheduled classes where attendance and participation is required as part of the learning process (e.g., tutorials, flipped classroom sessions, seminars, labs, etc.).

View more information on attendance

General Conduct and Behaviour

You are expected to conduct yourself with consideration and respect for the needs of your fellow students and teaching staff. Conduct which unduly disrupts or interferes with a class, such as ringing or talking on mobile phones, is not acceptable and students may be asked to leave the class.

View more information on student conduct

Health and Safety

UNSW Policy requires each person to work safely and responsibly, in order to avoid personal injury and to protect the safety of others.

View more information on Health and Safety

Keeping Informed

You should take note of all announcements made in lectures, tutorials or on the course web site. From time to time, the University will send important announcements to your university e-mail address without providing you with a paper copy. You will be deemed to have received this information. It is also your responsibility to keep the University informed of all changes to your contact details.



Student Support and Resources

​The University and the Business School provide a wide range of support services and resources for students, including:

Business School EQS Consultation Program
The Consultation Program offers academic writing, literacy and numeracy consultations, study skills, exam preparation for Business students. Services include workshops, online resources, individual and group consultations. 
Level 1, Room 1035, Quadrangle Building.
BUS.EQS.Consultations@unsw.edu.au
02 9385 4508

Communication Resources
The Business School Communication and Academic Support programs provide online modules, communication workshops and additional online resources to assist you in developing your academic writing.

Business School Student Centre
The Business School Student Centre provides advice and direction on all aspects of admission, enrolment and graduation.
Level 1, Room 1028 in the Quadrangle Building
02 9385 3189

UNSW Learning & Careers Hub
The UNSW Learning & Careers Hub provides academic skills and careers support services—including workshops, individual consultations and a range of online resources—for all UNSW students. See their website for details.
Lower Ground Floor, North Wing Chancellery Building.
learningcentre@unsw.edu.au
02 9385 2060

Student Support Advisors
Student Support Advisors work with all students to promote the development of skills needed to succeed at university, whilst also providing personal support throughout the process.
John Goodsell Building, Ground Floor.
advisors@unsw.edu.au
02 9385 4734

International Student Support
The International Student Experience Unit (ISEU) is the first point of contact for international students. ISEU staff are always here to help with personalised advice and information about all aspects of university life and life in Australia.
Advisors can support you with your student visa, health and wellbeing, making friends, accommodation and academic performance.
International.student@unsw.edu.au
02 9385 4734

Equitable Learning Services
Equitable Learning Services (formerly Disability Support Services) is a free and confidential service that provides practical support to ensure that your health condition doesn't adversely affect your studies. Register with the service to receive educational adjustments.
Ground Floor, John Goodsell Building.
els@unsw.edu.au
02 9385 4734

UNSW Counselling and Psychological Services
Provides support and services if you need help with your personal life, getting your academic life back on track or just want to know how to stay safe, including free, confidential counselling.
Level 2, East Wing, Quadrangle Building.
counselling@unsw.edu.au
02 9385 5418

Library services and facilities for students
The UNSW Library offers a range of collections, services and facilities both on-campus and online.
Main Library, F21.
02 9385 2650

Moodle eLearning Support
Moodle is the University’s learning management system. You should ensure that you log into Moodle regularly.
externalteltsupport@unsw.edu.au
02 9385 3331

UNSW IT
UNSW IT provides support and services for students such as password access, email services, wireless services and technical support.
UNSW Library Annexe (Ground floor).
02 9385 1333



AGSM9138-2022-T3