TECHNIQUES OF FINANCIAL ANALYSIS AND APPRAISAL

Paper Code: 
DATG 713
Credits: 
04
Contact Hours: 
60.00
Max. Marks: 
100.00
Objective: 

Course Outcomes

 

Learning and teaching strategies

Assessment Strategies

 
 

On completion of this course, the students will be able to:

CO 211:  Interpret and analyze financial statements.

CO 212: Analyze the company’s statements using Ratio Analysis and Cash Flows.

CO 213: Analyze the company’s statements using Cash Flows.

CO 214: Measure cost of capital of different sources

CO 215: Evaluate and rate projects using capital budgeting techniques

Explanations, Discussion, Demonstration, Action Research, Project work.

 

 

Class test, Semester end examinations, Quiz, Solving problems in tutorials, Assignments, Presentation

  

 

12.00
Unit I: 
UNIT 1

Financial Statement Analysis

·     Introduction meaning and objectives

·     Types of financial analysis

·     Devices used in analysing financial statements

·     Comparative statements

·     Common Size statements

Trend Analysis-Trend percentages, computation of trend percentages

12.00
Unit II: 
UNIT II

Ratio analysis

·       Meaning, importance and limitations

·       Financial ratios: Liquidity, Leverage , Activity

·       Profitability Ratios, Market test ratios

Profitability analysis, Income measurement analysis, Revenue analysis , Cost of sales analysis , Expense analysis , Variation analysis

12.00
Unit III: 
UNIT III

Cash Flow Analysis

·       Introduction, concept of cash

·       Uses and limitations of cash flow statement
 

Construction of cash flow statement

12.00
Unit IV: 
UNIT IV

Financial and Operating Leverages:

·       Introduction- Meaning and importance of financial and operating leverage

·       Computation of Financial Leverage and Operating Leverages

·       EBIT-EPS Analysis

·       Combined leverage- Meaning and Computation

Cost of Capital

·       Concept of cost of capital

·       Sources of capital

·       Calculation of cost of capital of all sources
 

                        Weighted average cost of capital

12.00
Unit V: 
UNIT V

Capital budgeting

·       Meaning and importance 

·       Methods of capital budgeting- Traditional and discounted techniques
 

                   Advantages and disadvantages of different methods of capital  Budgeting

Essential Readings: 

SUGGESTED TEXT  BOOKS:

·         Dave, B. B. Financial Reporting. Vrinda Publication.

·         Lal, J. Financial Reporting & Analysis. Himalaya Publication.

·         Maheshwari, S. N. An Introduction of financial Reporting. Vikash Publishers.

·         Tulsian, P. C. Financial Reporting Concept & Framework. Sultan Chand & Sons.

e-RESOURCES:

 

REFERENCE JOURNALS:

  • Business Perspectives and Research
  • FIIB Business Review
  • Harvard Business Review
  • IUP Journal of Accounting Research

 

 

References: 

SUGGESTED REFERENCE BOOKS:

  • Ahuja, N. Financial Accounting & Analysis. Taxman.
  • Bhattacharya, A. K. Coporate Financial Reporting & Analysis. PHI India.
  • Sharma, D. G. Financial Reporting. Taxman.

 

 

Academic Year: 
2023-2024
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