Subject Overview

An advanced, professionally oriented study of financial statement analysis, security valuation, portfolio-informed investment decisions, and investment research. The subject integrates accounting quality, economics, quantitative analytics, governance, ethics, technology, and contemporary capital-market practices relevant to investment banking.

Learning Goal

Enable students to critically evaluate issuers and securities, build defensible valuations, identify risks and accounting distortions, produce professional investment recommendations, and apply ethical, data-driven judgment in changing financial markets.

Syllabus

1. Security Analysis and Capital-Market Foundations

Learning Objective: Explain security types, market participants, issuance and trading mechanisms, risk–return concepts, information sources, analyst roles, and the relationship between security analysis and investment banking.

Category: foundation

2. Financial Reporting Framework and Statement Architecture

Learning Objective: Interpret income statements, balance sheets, cash-flow statements, statements of equity, notes, audit reports, and linkages among statements under major financial reporting standards.

Category: foundation

3. Accounting Quality and Financial Statement Reconstruction

Learning Objective: Evaluate revenue recognition, capitalization, depreciation, provisions, leases, pensions, taxes, consolidation, off-balance-sheet exposures, and earnings-management risks; normalize statements for analysis.

Category: core

4. Financial Ratio and DuPont Analysis

Learning Objective: Apply common-size, trend, liquidity, efficiency, profitability, leverage, coverage, and DuPont analyses; select benchmarks and distinguish operational causes from accounting effects.

Category: core

5. Cash-Flow, Liquidity and Solvency Analysis

Learning Objective: Assess operating cash generation, free cash flow, working-capital dynamics, debt-service capacity, liquidity stress, refinancing risk, financial flexibility, and early warning indicators of distress.

Category: core

6. Business, Industry and Competitive Analysis

Learning Objective: Analyze business models, revenue drivers, unit economics, industry structure, competitive advantage, cyclicality, regulation, macroeconomic exposure, and ESG-related strategic risks using structured frameworks.

Category: core

7. Forecasting and Integrated Financial Modelling

Learning Objective: Develop assumption-driven, integrated three-statement forecasts; model operating drivers, working capital, capital expenditure, financing, scenarios, sensitivities, and model controls according to professional standards.

Category: application

8. Equity Valuation: Intrinsic Value Methods

Learning Objective: Estimate cost of equity and capital, forecast dividends and free cash flows, calculate terminal value, and apply dividend discount, FCFF, FCFE, and residual-income models while testing valuation robustness.

Category: core

9. Relative Valuation and Transaction Multiples

Learning Objective: Select comparable companies and transactions; calculate and interpret enterprise-value and equity-value multiples; normalize peer data and control for growth, profitability, risk, and accounting differences.

Category: application

10. Fixed-Income and Credit Analysis

Learning Objective: Value bonds and analyze yield measures, duration, convexity, term structure, credit spreads, covenants, ratings, default risk, recovery, structural subordination, and issuer creditworthiness.

Category: core

11. Security Risk, Return and Market Behaviour

Learning Objective: Apply diversification, CAPM, multifactor models, beta, alpha, downside and tail-risk measures; evaluate market efficiency, behavioural biases, liquidity, and implications for security selection.

Category: advanced

12. Special Situations and Complex Securities

Learning Objective: Analyze IPOs, rights issues, convertibles, preferred shares, distressed securities, restructurings, mergers, spin-offs, and event-driven opportunities using scenario and probability-based valuation.

Category: advanced

13. Investment Research, Recommendations and Decision Governance

Learning Objective: Convert analysis into defensible investment theses, catalysts, target prices, risk cases, and recommendations; communicate through professional reports and presentations while applying review, documentation, and model-governance controls.

Category: strategic

14. Data Analytics, AI and Emerging Security-Analysis Practice

Learning Objective: Use financial databases, screening, visualization, alternative data, automation, NLP, and generative AI responsibly; address data quality, explainability, model risk, cybersecurity, market abuse, conflicts of interest, ESG disclosure, and evolving regulation.

Category: contemporary