Business Analysis and Valuation
| Numbering Code | Year/Term | 2022 ・ Second semester | ||
|---|---|---|---|---|
| Number of Credits | 2 | Course Type | Lecture | |
| Target Year | Target Student | |||
| Language | English | Day/Period | Fri.2 | |
| Instructor name |
MATSUMOTO SHIGERU (Graduate School of Management Specially Appointed Professor) ISAGAWA NOBUYUKI (Graduate School of Management Professor) |
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| Outline and Purpose of the Course |
This course intends to present both theory and practice of business analysis and valuation in global business context. Financial statements are the basis for a wide range of business analysis. Corporate managers use them to monitor and judge their firm`s performance. They also use them to communicate with external investors and to evaluate potential new business to acquire as part of their investment strategy. In banking sector, securities analysts use financial statements to rate and value companies they recommend to clients. Commercial bankers use them in deciding whether to extend a loan to a client，and investment bankers value and analyze prospective buyout and merger and acquisitions. The first half of this course， students will learn the framework to develop an in-depth analysis of business and extract its fundamental value. The framework consists of three key components, such as strategy, financial and prospective analysis. In the second half of course students will learn and discuss how this framework can be applied to equity analysis and credit analysis. In addition, students will learn about major business transactions with cases in cross border Mergers & Acquisitions (M&A) from strategic investor`s perspective, project finance from bankers` points of view, and corporate restructuring from turnaround managers` perspective. |
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| Course Goals | By completing this course, you will be able to (1)Use analysis tools to evaluate business, (2) Understand concept of valuation (3) Learn expectation of equity investors and debt holders to company performance, and (4) Understand dynamic business decisions upon acquisition, project finance, and restructuring. | |||
| Schedule and Contents |
The course will comprise 15 sessions, mostly focused on lectures and case discussion but including student presentations. 1. Introduction: What is Business Analysis and Valuation(BAV)? Why important for managers, bankers and investors? 2 How do you analyze and value business? ① Case: Nissan Motor Co. 3. How do you analyze business and value? ②Framework and Steps of BAV 4. How do you analyze business and value? ③Case: Personal Computers business sector in Japan 5. Application of BAV, Equity Analysis and Credit Analysis, Case: LIXIL’s acquisition and its refinance 6. How do you evaluate investment opportunities? Valuation in practice. Market Multiples and DCF techniques. 7 Mergers & Acquisitions ① M&A in practice, Does this acquisition bring us value? 8 Mergers & Acquisitions ② Five conventional benefits and traps, Case: Bridgestone Co. Google and IBM 9. Buyout, How does financial sponsor create value? 10. Project Finance ①How does banker evaluate bankability of project? 11. Project Finance ②Case: Renewable energy power plant project 12 Corporate Restructuring, How does manager turnaround distressed company? Case: Sharp Co. 13&14.Students Presentation: Students choose company, conduct equity analysis, and present investment recommendation. 15 Wrap up Note: Course schedule and contents are subject to change depending on performance of students |
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| Evaluation Methods and Policy |
Class attendance and participation in discussion (50%) Presentation about business analysis and valuation (50%) |
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| Course Requirements | Basic understanding about finance and accounting is preferred but not required | |||
| Study outside of Class (preparation and review) | Read the assigned reference materials prior to lecture and prepare final presentation. | |||
| Textbooks | Textbooks/References | Course materials will be provided at each class | ||
| References, etc. |
Matsumoto, Japanese Outbound Acquisitions, Explaining What Works, (Palgrave Macmillan,Spriger Nature 2019） Healy & Palepu, Business Analysis and Valuation : Using Financial Statements Text and Cases , Fifth Edition.(South-Western Pub, 2012), 336. Higgins, Analysis for Financial Management , Tenth Edition.(The McGrew-Hills Companies, 2012), 480. |
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