Techniques of Financial Analysis and Appraisal

Paper Code: 
24DATG703
Credits: 
04
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

 

 

 

 

 

 

 

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

CO 196: Measure cost of capital of different sources and apply leverage analysis

CO 197:  Evaluate projects using capital budgeting techniques

CO198:Contribute effectively in course- specific interaction

Approach

in

teaching:

Interactive

Lectures,

Discussion,

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 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

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-content:

 

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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