TECHNIQUES OF FINANCIAL ANALYSIS AND APPRAISAL

Paper Code: 
DATG 703
Credits: 
4
Contact Hours: 
60.00
Max. Marks: 
100.00
Objective: 

Course Outcomes (COs):

Course Outcomes

 

Learning and teaching strategies

Assessment Strategies

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

CO 161:  Interpret and analyze financial statements.

CO 162: Analyze the company’s statements using Ratio Analysis and Cash Flows.

CO 163: Analyze the company’s statements using Cash Flows.

CO 164: Measure cost of capital of different sources

CO 165: 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: 

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: 

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-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: 
2023-2024
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