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Unit of study_

ACCT6003: Fundamental Analysis for Equity Investment

This unit of study develops a framework of fundamental analysis for equity investment. Fundamental analysis utilises publicly available information for estimating the intrinsic value of common stock using earnings-based valuation models. The aim is to discover investment opportunities of stocks that are not accurately valued by the market and take a long investment position. Fundamental analysis relies on the analysis of financial statement information, which must be reformulated with a strict focus on core operating performance. The financial information is complemented by data from the company's environment including its business strategy, competitive threats and macroeconomic factors. The unit of study places particular emphasis on developing a structural approach to financial ratio analysis, including the analysis of sales growth and abnormal operating return, as well as the analysis of earnings quality and reporting strategy. It also discusses the impact of behavioural biases on equity investment decisions. This unit prepares students for a successful career in equity investment analysis.

Code ACCT6003
Academic unit Accounting
Credit points 6
ACCT5001 and (FINC5001 or BUSS5514)
Assumed knowledge:
QBUS5001 or QBUS5002

At the completion of this unit, you should be able to:

  • LO1. Learn to identify and analyse the key drivers of value creation within a business.
  • LO2. Evaluate and analyse the information presented in annual reports and financial statement as produced by financial accounting.
  • LO3. Develop an in-depth understanding of equity valuation models and approaches to estimating intrinsic equity prices for investment appraisal.
  • LO4. Apply financial analysis to analyse creditworthiness, liquidity and solvency.
  • LO5. Understand the impact of key behavioural biases when acting as a sell-side financial analyst.
  • LO6. Produce professional investment valuation reports, apply qualitative judgment that is informed by quantitative analysis, and communicate investment recommendations.