5204 - ADVANCED ACCOUNTING AND FINANCE

The course addresses a primary concern of financial markets, namely the methods used to value companies. Valuation methods such as the price-earnings ratio, dividend yield and EVA® (economic value added) are found frequently in stock-brokers' reports and in the financial press. There has also been an explosion of interest in shareholder value in recent years, with a corresponding need to understand how value is created and measured.
The objective of this course is twofold. First, it aims at an analytical review of valuation models, identifying the relationships between them and exposing the assumptions each of them makes. Second, it aims at an evaluation of the scope and quality of the data that is available for use in valuation models. Variation in the type and quality of data is the key determinant of the usefulness of any given valuation model. There is therefore an important relationship between the choice of valuation model and the available data.

• The design and purpose of acccounting
• The essentials of finance theory
  - Valuing risk
  - Portfolio theory
• Valuing equities
  - Market tools and techniques, including: PER, dividend yield, earnings yield, return on investment, EVA, chartism
• The fundamental value of an asset
  - Beta and the CAPM
  - Valuing an equity       

Attending students
Two partial written exams or one general written exam.

Non attending students
One general written exam.

In addition, both attending and non attending students must present an assignment to be done in small groups.

• R. BARKER, Determining Value. Valuation models and financial statements, Financial Times-Prentice Hall, 2001.
• Il materiale presentato in aula verra' messo a disposizione degli studenti sul B-Learning.