Accounting and Financial Analysis (MiE)

While financial statements represent the standard way to analyze past business activities, they are also the primary tool used to forecast future business activities to derive cash flows. We will use a structured framework that allows analyzing the key value drivers of a firm's or projects value. Cash flows are used as inputs in discounted cash flow or net present value analyses. To perform these analyses effectively, students need a solid understanding of the relation between a project's risk, the risk-contribution of its funding with equity or debt, and the return that investors that fund projects require.