Delhi University TYBMS Sem 5 Syllabus – Corporate Analysis and Valuation

Corporate Analysis means reviewing the key aspects of a company to determine its strengths and weaknesses. Corporate analysis describes the creation of an indepth evaluation of a corporate entity. It covers all aspects of the company which includes profit margins, finances, organizational structure and growth opportunities.

Corporate Analysis and Valuation paper will enable DU BMS students to analyze the health of a company through their annual reports and will equip the students to understand what an asset is worth and what determines that value.

Here we present Delhi University TYBMS Sem 5 Syllabus – Corporate Analysis and Valuation:

Unit 1 – 10 lectures

1. Analysis of corporate financial statements
2. Income statements and balance sheets through ratio analysis and analyzing the Chairman’s statement
3. Directors’ Report
4. Management discussion and analysis
5. Report on corporate governance
6. Auditor’s report to evaluate the financial soundness of the company

Unit 2 – 10 lectures

1. Cash flows- firm cash flows
2. Earnings
3. Tax effect
4. Reinvestment needs
5. Equity cash flows
6. Dividend
7. Forecasted cash flows
8. Terminal value estimation approaches
9. Equity discounted cash flow models
10. Dividend discount models
11. Extensions of DDM
12. Free cash flow to equity model

Unit 3 – 12 lectures

1. Introduction to valuation
2. Approaches to valuation
3. Discounted cash flow
4. Relative valuation
5. Role of valuation
6. Discounted cash flow valuation
7. Estimating discount rates
8. Cost of equity
9. Cost of equity to cost of capital
10. Valuation of an asset with guaranteed cash flows
11. Introducing uncertainty into valuation (valuing an asset with default risk and equity risk)
12. Valuing an asset with an infinite life

Unit 4 – 12 lectures

1. Firm valuation models
2. Cost of capital approach
3. Adjusted present value approach
4. EVA
5. Capital structure and firm value
6. Relative valuation – popularity and potential pitfalls
7. Reconciling relative and discounted cash flow valuation equity multiples
8. Value multiples
9. Valuation of different kinds of companies

Unit 5 – 12 lectures

1. Value of synergy
2. Operating and financial synergy
3. Cash and tax benefits
4. Debt capacity
5. Evidence on synergy
6. Common errors in valuing synergy
7. Valuing real options

Textbooks and references:

• Financial statement analysis, 2^nd edition – Foster, George
• Damodaran on Valuation, Security Analysis for Investment and Corporate Finance- Damodaran, A.
• Corporate Valuation and Value Creation – Chandra, P.
• Mergers, Restructuring and Corporate Control – Weston, Chung, Hoag