Università Roma Tre

Three modules are scheduled.
Module I –Accounting, Basic
Review of basic corporate financial reports and disclosures that serve as inputs to valuation analysis.
Module II – Financial Statement Analysis
Analysis of financial ratios to measure financial risks and returns; analysis of financial disclosures to identify red flags of potential distress or earnings manipulation;
Module III – Firm Valuation, Basics
Valuation issues with taxes, intangibles and financial investments; developing cash flow forecasts; and integrating the above tools and techniques to determine the valuation of a firm equity.
Students will learn common valuation methods such as discounted cash flow analysis and earnings based valuation, and also learn to use other approaches used in the valuation industry such the use of valuation multiples and comparable transactions analysis.
Examples from court cases involving valuation disputes will be adopted to illustrate practical valuation problems.

Course material
E-Book to download from course website

Key reading list
Sutton T (last edition), Corporate Financial Accounting & Reporting, Prentice Hall
Damodaran A. (last edition), Damodaran on Valuation: Security Analysis for Investment and Corporate Finance, Wiley Finance

Introduction
Part One. The business analysis: indexes and flows
First Section. The financial statement ratio analysis
The logical and accounting process of the financial statements.
The financial statements: the purpose of ratio analysis
The reinterpretation of the balance sheet for the purpose of financial analysis / balance sheet
The reinterpretation of the income statement to profitability analysis purposes
The asset analysis of the aspect: the organic framework of the quotients of capital structure
The financial analysis of the aspect: the organic framework of financial ratios
The profitability analysis: the organic framework of the income ratios
The weighted ratios
Section Two. The analysis of financial flows
The funds flow
The statement of changes in total financial resources
The cash flow statement of changes in net working capital
The financial statements of the liquidity fluctuations

Part Two - The economic capital
Purposes and subject positions in the company's assessments
Direct methods of evaluation of the economic capital
Theoretical indirect methods of estimating
The simplified income methods
The balance sheet methods
The mixed evaluation 'methods'
Application

Recommended reading

Part One:
G. Paolucci, Analisi di bilancio e finanziaria. Logica, finalità e modalità applicative, Franco Angeli, quinta edizione, 2021 ( o in alternativa G. Ferrero – F. Dezzani – P. Pisoni – L. Puddu, Le analisi di bilancio – indici e flussi, Giuffrè).
F. Manni – A. Faccia, Financial Accounting, ARACNE, 2019.
Part Two:
G. Zanda. - M. Lacchini - T. Onesti, La valutazione delle aziende, Giappichelli.