Financial Statement Analysis And Equity Valuation

Learn state-of-the-art fundamental analysis techniques to assess the quality of financial information and its impact on equity valuation.

Whether equity valuation is performed using a discounted cash flow model, a residual income model, or a relative valuation approach, and no matter how sophisticated the model is, it can be only as good as the underlying input data. 

Because financial statement information is a crucial input to valuation models, being able to read, understand, and confidently interpret financial statement information is essential to produce accurate valuations and inform sound investment decisions. 

Financial Statement Analysis and Equity Valuation is a one-of-a-kind programme that leverages LSE expertise and cutting-edge research to empower you to make accurate valuations, and rock-solid investment decisions. 

By developing an integrated approach to fundamental analysis and equity valuation, this programme allows you to become a sophisticated user of financial statement information—mastering the tools and the techniques to challenge assumptions, question and debias financial information through a forensic lens. 

You will also thoroughly explore the changing regulatory landscape and its impact on financial statement information and equity valuation. By the end of the programme, you emerge competent and confident in analysing a breadth of diverse and complex financial reporting issues and accurately assessing their valuation implications.

Benefits For You:

• Develop a deep understanding of how the quality of the financial information reported by corporations affects the interpretation and evaluation of corporate disclosures and the practical application of valuation methodologies
• Gain the knowledge and skills to determine whether reported earnings are sustainable in the future and accurately reflect the underlying performance of the business
• Learn state-of-the-art forensic analysis techniques to assess the overall quality of the earnings reported by corporations
• Gain valuable experience on how to detect and correct potential biases and distortions in financial statements

Key Topics:

• Financial Statement Analysis
• Financial statement analysis fundamentals for valuation and investment
• Viewing the business through the lenses of financial statements
• Earnings quality analysis
• Detecting earnings manipulations
• Forensic analysis of potential biases and distortions in financial statements
• Adjusting financial ratios
• Modelling and forecasting financial statements.
• Equity Valuation
• Measuring return on investment in a complex financial reporting environment
• Critical accounting issues for valuation
• The importance of accounting returns for valuation
• Accounting-based screens and investment signals
• Residual income valuation models
• Pricing book values
• Pricing earnings
• Accounting-based multiples and valuation
• Financial statement inputs to stock and flow valuation multiples.