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Financial Statement Analysis and Valuation

Financial statements are used for a wide range of applications including analysis of firm performance, communication with the markets, firm valuation, and selecting M&A targets. This course provides a framework for using financial statement information in the context of business analysis and firm valuation.
Course code
Course type
MSc Course
Weekly Hours
FS 2023
Dr. Dennis Jullens
Please note that exchange students obtain a higher number of credits in the BSc-program at WHU than listed here. For further information please contact directly the International Relations Office.

Stakeholders such as managers, shareholders, bankers and analysts rely on accounting information to understand, compare and forecast financial performance. This course provides the knowledge and skills to derive and interpret important metrics in assessing, comparing and forecasting financial performance in a capital markets setting. You will then learn how to transform these forecasts into estimates of company valuation by using equity and enterprise-based valuation techniques.

The course ‘Financial Statement Analysis & Valuation’ takes the user perspective of financial statements (investment analyst, portfolio manager and business analyst) as she interprets financial reports, analyses performance and prepares forecasts. We will start with a refresher on the role of financial reporting in market economies and the development of International Financial Reporting Standards (IFRS). Next, we will review the key accounting concepts and the primary financial statements. Focus is on interpreting financial statements to forecast key value drivers such as earnings, cash flows and returns for equity valuation. We cover the intricacies of major valuation methodologies (Discounted Cash Flow, Residual Income Model and Valuation Multiples) as well as the concept of equity and enterprise value. Several well-known, large international companies will be used as cases to illustrate the practical aspects of financial analysis and valuation in capital markets.

Date Time
Monday, 13.03.2023 15:30 - 18:45
Tuesday, 14.03.2023 08:00 - 11:15
Monday, 20.03.2023 15:30 - 18:45
Tuesday, 21.03.2023 08:00 - 11:15
Monday, 27.03.2023 15:30 - 18:45
Tuesday, 28.03.2023 08:00 - 11:15
Monday, 03.04.2023 15:30 - 18:45
Tuesday, 04.04.2023 09:45 - 11:15

The objective of this course is to give student a solid understanding of the relevant disciplines of financial accounting and financial analysis for business valuation. Specific objectives and topics include:

Learning areas

Learning outcomes

I. Content-related

To become acquainted with financial reporting requirements and practices applied by global firms

To understand the limitations of International Financial Reporting Standards (IFRS) as a global accounting language

To appreciate the differences / similarities in the various valuation methodologies (Discounted Cash Flow, Residual Income Model and Valuation Multiples)

II. Skills-related

To apply the basic tools in analyzing financial statements

To become savvy in analyzing, interpreting and forecasting information in financial statements.

To become a knowledgeable communicator in financial reporting; the language of business

To obtain exposure to, and familiarity with, the financial statements of real companies

To interpret the communication between company and financial markets on financial performance, forecasts and valuation

III. Attitude-related

To critically review a firm’s key performance metrics within an industry context

To question financial reporting requirements and firms reporting practices

To appreciate the role of judgment in financial accounting and analysis

Study materials: The course will involve articles, cases and excel files that will be made available.Useful reference book is ‘Valuation’ by Koller, Goedhart and Wessels (6th Edition).
General policies:

This course is interactive and will make use of everyday examples. Students should prepare the pre-reading prior to class and will be encouraged (and occasionally invited) to contribute to the discussion.

  • Group assignment (40%) – The group assignment will involve a comprehensive financial analysis and valuation of a listed European company of your choice;
  • Individual assignments (60%) – Two individual case assignments
The course builds on "International Financial Reporting I" and serves as an ideal counterpart to "Financial Valuation" for students enrolled into Master in Finance program.
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