Accounting-Based Valuation

Catalog description

This course synthesizes financial statement analysis, corporate finance, and the valuation of stocks (i.e., investments). The content is advanced insofar that coursework in all three areas are prerequisites. This course is all about gaining the knowledge of how financial metrics are mapped into stock prices. The stock market can be an intimidating venture for most people. The determination of stock prices often seems a black-box mystery. Understanding how accounting numbers are tied to the stock price and knowing what to look for in determining how much you think the stock is worth (i.e., intrinsic or fundamental value) are real advantages to investors. When buying a piece of stock, you are paying for the future performance of the company and you need to be able to monetize and benchmark that performance using financial metrics. You will learn how to quantify the stock price that you are paying into digestible chunks. This course introduces a simple procedure to infer future financial metrics you need to see from the company based on what you are paying. This course also introduces you to a number of useful tools in assessing whether future performance, as implied by the current stock price, is attainable.