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FBE 421: Financial Analysis and Valuation Spring 2011

Professor Lori Santikian Office: Hoffman Hall 618 Email: lori.santikian@marshall.usc.edu Office Hours: Tuesday, 11:00 a.m. – 12:30 p.m. Course website: http://blackboard.usc.edu

COURSE OVERVIEW

“Intrinsic value can be defined simply: It is the discounted value of the cash that can be taken out of a business during its remaining life. The calculation of intrinsic value, though, is not so simple.” − Warren Buffett This course develops and applies tools of financial analysis to assess the value of projects and enterprises. Valuation of projects and enterprises is of central importance for both companies and investors. When a firm considers an internally-generated investment project, an external acquisition, an equity issue, or a share repurchase program, there is a need for valuation. Companies need to evaluate if projects or acquisitions are creating value for shareholders. Investors selling or buying shares need to evaluate the price of these shares. This course is designed to give you the tools to implement this analysis, bridging financial theory and practice in the context of several cases and real world examples. The course focuses on approaches to compute the intrinsic value of projects and business, but also addresses other important considerations that matter while applying valuation tools to real world decisions. Prerequisite Knowledge This course assumes that the background knowledge of students includes basic finance (BUAD 306) and accounting. Students should be comfortable with topics covered in standard corporate finance texts, such as Ross, Westerfield & Jaffe and Brealey & Myers. Note: You are responsible for reviewing your basic finance and accounting concepts as soon as possible. The pace of topics covered in the class does not allow for review of this material.

COURSE MATERIALS

Required Textbook Titman, Sheridan and John D. Martin, Valuation: The Art and Science of Corporate Investment...