Techniques of Financial Analysis and Appraisal

Paper Code: 
24DATG713
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: 

Course Outcomes (COs):

Course

Learning outcome

(at course level)

Learning and teaching strategies

Assessment Strategies

Course Code

Course title

24DATG713

Techniques of Financial Analysis and Appraisal (Theory)

 

CO253:  Interpret and analyze financial statements.

CO254: Analyze the company’s statements using Ratio Analysis

CO255: Analyze the company’s statements using Cash Flows.

CO256: Measure cost of capital of different sources and apply leverage analysis

CO257: Evaluate projects using capital budgeting techniques

CO258: Contribute effectively in course-specific interaction

Approach in teaching: Interactive Lectures, Discussions, Tutorials Problem solving sessions, Presentations.

 

Learning activities for the students: Self-learning assignments, Case Study Analysis, Presentations, Group Discussions.

 

Continuous Assessment Test,

Semester end Examinations,

Quiz,

Solving Numerical problems, Assignments, Class Presentations, Individual & group projects.

 

12.00
Unit I: 
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: 
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:

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: 
Capital budgeting:

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

Essential Readings: 

● 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.

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-Resources
● 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
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