Techniques of Financial Analysis and Appraisal

Paper Code: 
25DATG713
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

Learning outcome

(at course level)

Learning and teaching strategies

Assessment Strategies

Course Code

Course title

25DATG713

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, Discussion, Tutorials, Reading assignments; Solving

Questions.

 

Learning activities

for the students:

Self-learning assignments, Effective questions,

Seminar presentation.

  

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

• 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: 
2025-2026
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