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2023/2024  KAN-CCMVI2132U  Evaluation of Financial Information

English Title
Evaluation of Financial Information

Course information

Language English
Course ECTS 7.5 ECTS
Type Elective
Level Full Degree Master
Duration Summer
Start time of the course Summer
Timetable Course schedule will be posted at calendar.cbs.dk
Min. participants 30
Max. participants 60
Study board
Study Board for cand.merc. and GMA (CM)
Course coordinator
  • Carsten Sørensen - Department of Finance (FI)
For academic questions related to the course, please contact course instructor Gregory Perelman (gperelman@ucdavis.edu)
Main academic disciplines
  • Finance
  • Accounting
Teaching methods
  • Face-to-face teaching
Last updated on 22-11-2023

Relevant links

Learning objectives
To achieve the grade 12, students should meet the following learning objectives with no or only minor mistakes or errors:
  • Compute key financial ratios using financial statements of publicly traded companies
  • Determine financial health of the companies by interpreting key financial ratios
  • Convert data from accounting statements into free cash flows for valuation purposes
  • Apply DCF (discounted cash flow) model for in valuation of projects and companies in various industries and economic conditions
  • Apply relative valuation models using market and transaction multiples
Course prerequisites
Introductory accounting course required.
Introductory finance management course is required.
Evaluation of Financial Information:
Exam ECTS 7,5
Examination form Written sit-in exam on CBS' computers
Individual or group exam Individual exam
Assignment type Written assignment
Duration 4 hours
Grading scale 7-point grading scale
Examiner(s) One internal examiner
Exam period Summer
Aids Open book: all written and electronic aids, including internet access
Read more here about which exam aids the students are allowed to bring and will be given access to : Exam aids and IT application package
Make-up exam/re-exam
Same examination form as the ordinary exam
The number of registered candidates for the make-up examination/re-take examination may warrant that it most appropriately be held as an oral examination. The programme office will inform the students if the make-up examination/re-take examination instead is held as an oral examination including a second examiner or external examiner.
1st retake exam: 4 hour written sit-in exam, new exam question.
Course content, structure and pedagogical approach

This course covers the use of financial information to value firms, projects, and securities in a variety of industries under different economic conditions. The course
will be largely based on case studies and will focus on learning techniques of financial analysis, selecting an appropriate valuation model, analyzing the quality of financial data, and forecasting financial variables and cash flows. The course assumes that you have a good working knowledge of introductory accounting, finance, and economics.


Preliminary assignment:

Read two papers: (1) Introduction to Financial Ratios and Financial Statement Analysis and (2) Assessing a Company’s Future Financial Health;

Class 1: Review of financial statements and financial ratios: balance sheet, income statement, statement of cash flows, key ratios; Case: Santa Fe Trading Company;
Class 2: Valuation framework and the cost of capital calculations; Case Eaton Corp.
Class 3: Pro-forma financial statements and evaluation of investment projects; Case: Hansson Private Label Inc.: Evaluating an Investment in Expansion
Class 4: Evaluating financial information in the M&A scenario; Case: Sun Micro.
Class 5: Analysis of financial statements in banking; Case: Citigroup 2007: Financial Reporting and Regulatory Capital
Class 6: in-class company valuation (AT&T and Time Warner merger);

Feedback activity: Students will be asked to analyze financial information and estimate the value of a company (financial statements will be provided). The final exam will also be a case study.

Class 7: Accounting ratios and relative valuation process; Case: SUN Brewing
Class 8: Real estate industry (REITS) analysis; Case: Simon’s Hostile Tender for Taubman
Class 9: Health care industry: leveraged buyout analysis; Case: HCA, Inc.
Class 10: How activist investors use accounting data to identify their targets; Case: Kerr-McGee
Class 11: Course review;

Description of the teaching methods
Lectures, case discussions, in-class exercises.
Feedback during the teaching period
Students will be asked to value a publicly traded company and calculate key financial ratios; answers will be provided in class.
Student workload
Preliminary assignments 20 hours
Classroom attendance 30 hours
Preparation 129 hours
Feedback activity 7 hours
Examination 20 hours
Further Information

6-week course.


Preliminary Assignment: The course coordinator uploads Preliminary Assignment on Canvas at the end of May. It is expected that students participate as it will be included in the final exam, but the assignment is without independent assessment and grading.

Expected literature


Mandatory readings

1. Introduction to Financial Ratios and Financial Statement Analysis, 9-193-029, Rev. September 13, 2004
2. Assessing a Company’s Future Financial Health, #9-911-412, Rev. May 28, 2012
3. Business Valuation: Standard Approaches and Applications, UV6586; rev. Nov. 21, 2013
4. Corporate Valuation and Market Multiples, #9-206-039, Rev. January 16, 2009
5. The Cost of Capital: Principles and Practice, #UV6793, Rev. Nov. 13, 2015
Required Cases:
1. Santa Fe (provided on Canvas)
2. Hanson Private Label Inc.: Evaluating an Investment in Expansion, Brief Cases, #4021, Rev. March 1, 2010
3. Sun Microsystems. UV5626.
4. Citigroup 2007: Financial Reporting and Regulatory Capital, 9-111-041; Rev. October 6, 2010
5. SUN Brewing (B), #9-207-039, Rev. June 28, 2010
6. Simon’s Hostile Tender for Taubman (A), 9-205-052, Rev. January 19, 2006;
7. HCA, Inc (A), 9-207-076, Rev. December 21, 2011
8. Kerr-McGee, #9-207-020, Rev. July 25, 2012


Required reading materials to be purchases from HBS Publishing at this link:


Additional relevant readings:
Ivo Welch, Corporate Finance: 4th Edition, 2017 (Free online access) Ch. 14-15, 21

Last updated on 22-11-2023