Techniques of Financial Analysis and Appraisal

Paper Code: 
24DATG703
Credits: 
4
Contact Hours: 
60.00
Max. Marks: 
100.00
Objective: 

This course will enable the students to assess the financial performance, evaluate the financial position and make informed decisions based on the analysis of financial statements.

Course Outcomes (COs):

       Course

Learning outcome

(at course level)

Learning and teaching strategies

Assessment Strategies

Course Code

Course title

 

 

 

 

 

 

 

 24DATG703

 

 

 

 

 

 

Techniques of Financial Analysis and Appraisal

(Theory)

   

CO 193:  Interpret and analyze financial statements.

CO 194: Analyze the company’s statements using Ratio Analysis

CO 194: Analyze the company’s statements using Cash Flows.

CO 195: Measure cost of capital of different sources and apply leverage analysis

CO 196:  Evaluate projects using capital budgeting techniques

CO197: Evaluate and rate projects using capital budgeting techniques

CO198: Contribute effectively in course- specific interaction

Approach

in

teaching:

Interactive

Lectures,

Discussion,

Tutorials,

Reading

assignments; Solving

Questions.

 

Learning

activities

for the

students:

Self-learning

assignments, Case Study analysis, Presentation

  

Class test, Semester end examinations, Quiz, Solving problems, Assignments, Presentation, Individual and group projects.

 

 

 

 

12.00
Unit I: 
Financial Statement Analysis:

• Introduction meaning and objectives
• Types of financial analysis
• Devices used in analyzing financial statements
• Comparative statements
• Common Size statements
• Trend Analysis:Trend percentages, computation of trend percentages

12.00
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: 
Cash Flow Analysis:

• Introduction, concept of cash
• Uses and limitations of cash flow statement
• Construction of cash flow statement

12.00
Unit IV: 
Leverages and Cost of Capital:

• 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: 
Capital budgeting:

• Meaning and importance
• Methods of capital budgeting- Traditional and discounted techniques
• Advantages and disadvantages of different methods of capital budgeting

Essential Readings: 

• Meaning and importance
• Methods of capital budgeting- Traditional and discounted techniques
• Advantages and disadvantages of different methods of capital budgeting

References: 

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

E-content:
• https://resource.cdn.icai.org/66493bos53751-cp3-u2.pdf
• https://resource.cdn.icai.org/66638bos53803-cp1.pdf

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

Academic Year: 
2024-2025
  • Printer-friendly version
  • PDF version