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2014/2015  KAN-CBIOU1002U  Finance, Valuation and Accounting in BioBusiness

English Title
Finance, Valuation and Accounting in BioBusiness

Course information
Language English
Course ECTS 7.5 ECTS
Type Mandatory
Level Full Degree Master
Duration One Semester
Course period Autumn
Timetable Course schedule will be posted at calendar.cbs.dk
Max. participants 10
Study board
Study Board for MSc. in Business Administration and Bioentrepreneurship
Course coordinator
  • Finn Valentin - Department of Innovation and Organizational Economics (INO)
  • Johannes Mouritsen - Department of Accounting and Auditing (AA)
Several factors necessitate size restrictions for this course to max. 10 students. Students enrolling for the minor in bioentrepreneurship is selected first.

CBS students have to apply through the official CBS course enrollment and credit students must apply by filling out an application form found at www.cbs.dk.
Main academic disciplines
  • Financial and management accounting
Last updated on 17-02-2014
Learning objectives
When awarding the grade at the individual oral exam, the assessment will be based on the student's mastering of the following:

Through this course students become capable of estimating monetary values of long term projects and impact of projects for company and share value. In addition, students should be able to master basic models and economic theories of valuation in capitalistic financial markets. They also become capable of assessing mature pharmaceutical companies as well as other companies from an external perspective based on financial statement analysis, credit analysis and company valuation.
Course prerequisites
Students must have completed the first year in one of the following cand.merc. programmes: ASC, IMM, IBS, MIB.
Examination
Finance, Accounting and Valuation in BioBusiness:
Exam ECTS 7,5
Examination form Oral Exam
Individual or group exam Individual
Duration 20 min. per student, including examiners' discussion of grade, and informing plus explaining the grade
Preparation time No preparation
Grading scale 7-step scale
Examiner(s) Internal examiner and external examiner
Exam period Autumn Term and December/January
Make-up exam/re-exam
Same examination form as the ordinary exam
Course content and structure

The course covers the following themes:

  1. Investment theory
  2. Capital market Theory
  3. Valuation of Derivatives (futures and options especially Real Options)
  4. Financial statement analysis
  5. Credit analysis
  6. Valuation of companies

Based on economic theories of investment project evaluation and pricing of securities in capital markets the focus of the course is on valuation in monetary terms of pharmaceutical projects and pharmaceutical companies including financial management issues of procurement of capital and management of costs and liquidity. Pricing of risk of shares and bonds as well as of risk of derivatives are addressed. Handling of risk in a project and company setting including hedging of risk will be dealt with in case examples. Modern valuation models like Real Options will be introduced to describe risk of long terms projects and to estimate the monetary value hereof. This conceptual foundation of the course is based upon theories developed by Nobel Prize winners of economics.
 
The course also covers financial statement analysis of young pharmaceutical companies as well as other mature companies. The financial statement analysis is a prerequisite for the subsequent credit analysis and valuation of companies assessed from an external perspective. 
Teaching methods
Lectures and group work. Exercises and cases will be used in both lectures and group work.
Expected literature

Recommended literature:

  • BMA  Brealey&Myers&Allen, Principles of Corporate Finance,10th ed,  McGraw-Hill,  2011
  • AK    Martha Amram, Nalin Kulatilaka, Strategy and Shareholder Value:Real Options Frontier, Journal of Applied Corporate Finance, Volume 13 No 2, Summer 2000
  • FSA  Christian Petersen, Thomas Plenborg, 2011, Financial Statement Analysis: Valuation - Credit Analysis - Executive Compensation

Supplementary literature:

  • Tim Koller, Marc Goedhart, David Wessels, 2010 Valuation (Wiley)
    Bogdan, B. and Villiger, R., 2008, Valuation in Life Science. A practical Guide  (Springer Verlag, Berlin).
  • Martha Amram, Nalin Kulatilaka, Strategy and Shareholder Value:Real Options Frontier, Journal of Applied Corporate Finance, Volume 13 No 2, Summer 2000
     
Last updated on 17-02-2014