ACCT6003: Semester 2, 2020

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Units ACCT6003 Semester 2 2020 [Normal day]

Unit of study_

ACCT6003: Fundamental Analysis for Equity Investment

Semester 2, 2020 [Normal day] - Camperdown/Darlington, Sydney

Overview

This unit develops a framework of fundamental analysis for equity investment in publicly traded companies. The first part of the unit deals with the analysis of financial statement information, complemented with other sources of information such as business strategy, industry prospects and key macroeconomic effects. Emphasis is on the analysis of earnings quality and accounting-based valuation methods. The second part of the unit applies fundamental analysis in the appraisal of equity investment, and the effect of credit evaluation and risk analysis, as well as the valuation for takeovers. The unit also covers the impact on equity valuation from inherent behavioural patterns in informing investment decisions.

Unit details and rules

Unit code	ACCT6003
Academic unit	Accounting
Credit points	6
Prohibitions ?	None
Prerequisites ?	ACCT5001 and FINC5001
Corequisites ?	None
Assumed knowledge ?	QBUS5001 or QBUS5002
Available to study abroad and exchange students	Yes

Teaching staff

Coordinator	Jian Ho, shawn.ho@sydney.edu.au

Type	Description	Weight	Due	Length
Final exam (Take-home extended release)	Take-home final project 2500 words	40%	Formal exam period	96+ hours
Outcomes assessed:
Assignment	Weekly Assignments	60%	Ongoing	Varied lengths
Outcomes assessed:
= hurdle task ? = Type E final exam ?

Assessment summary

Weekly assignments: There are 10 individual weekly assignments worth 6 marks each, thus all adding to the total of 60 marks (out of 100). All assignments will be released on a Friday at 4pm and must be submitted before class the following week. All late submission will receive 0 marks.

Take-home final project: Instead of a final exam, you will be assigned a take-home final project worth 40 marks (out of 100). In the last week of the semester, you will be assigned a company that is currently listed on the ASX, and you will act as a sell-side analyst to calculate its intrinsic equity value in order to make a recommendation on whether to buy, hold or sell. We will discuss the details of the take-home project in the last week of the semester.

Assessment criteria

The University awards common result grades, set out in the Coursework Policy 2014 (Schedule 1).

As a general guide, a high distinction indicates work of an exceptional standard, a distinction a very high standard, a credit a good standard, and a pass an acceptable standard.

Result name	Mark range	Description
High distinction	85 - 100	Awarded when you demonstrate the learning outcomes for the unit at an exceptional standard, as defined by grade descriptors or exemplars outlined by your faculty or school.
Distinction	75 - 84	Awarded when you demonstrate the learning outcomes for the unit at a very high standard, as defined by grade descriptors or exemplars outlined by your faculty or school.
Credit	65 - 74	Awarded when you demonstrate the learning outcomes for the unit at a good standard, as defined by grade descriptors or exemplars outlined by your faculty or school.
Pass	50 - 64	Awarded when you demonstrate the learning outcomes for the unit at an acceptable standard, as defined by grade descriptors or exemplars outlined by your faculty or school.
Fail	0 - 49	When you don’t meet the learning outcomes of the unit to a satisfactory standard.

For more information see sydney.edu.au/students/guide-to-grades.

For more information see guide to grades.

Late submission

In accordance with University policy, these penalties apply when written work is submitted after 11:59pm on the due date:

Deduction of 5% of the maximum mark for each calendar day after the due date.
After ten calendar days late, a mark of zero will be awarded.

Academic integrity

The Current Student website provides information on academic integrity and the resources available to all students. The University expects students and staff to act ethically and honestly and will treat all allegations of academic integrity breaches seriously.

We use similarity detection software to detect potential instances of plagiarism or other forms of academic integrity breach. If such matches indicate evidence of plagiarism or other forms of academic integrity breaches, your teacher is required to report your work for further investigation.

You may only use artificial intelligence and writing assistance tools in assessment tasks if you are permitted to by your unit coordinator, and if you do use them, you must also acknowledge this in your work, either in a footnote or an acknowledgement section.

Studiosity is permitted for postgraduate units unless otherwise indicated by the unit coordinator. The use of this service must be acknowledged in your submission.

Learning support

Simple extensions

If you encounter a problem submitting your work on time, you may be able to apply for an extension of five calendar days through a simple extension.  The application process will be different depending on the type of assessment and extensions cannot be granted for some assessment types like exams.

Special consideration

If exceptional circumstances mean you can’t complete an assessment, you need consideration for a longer period of time, or if you have essential commitments which impact your performance in an assessment, you may be eligible for special consideration or special arrangements.

Special consideration applications will not be affected by a simple extension application.

Using AI responsibly

Co-created with students, AI in Education includes lots of helpful examples of how students use generative AI tools to support their learning. It explains how generative AI works, the different tools available and how to use them responsibly and productively.

Weekly schedule

WK	Topic	Learning activity
Week 01	Introduction to valuation and business strategy analysis	Lecture (2 hr)
Week 01	Data sources	Workshop (1 hr)
Week 02	Using financial statements in valuation	Lecture (2 hr)
Week 02	Business strategy analysis	Workshop (1 hr)
Week 03	Cash-based valuation	Lecture (2 hr)
Week 03	Accounting measurement	Workshop (1 hr)
Week 04	Earnings-based valuation	Lecture (2 hr)
Week 04	Cash-based valuation case	Workshop (1 hr)
Week 05	Earnings quality	Lecture (2 hr)
Week 05	Earnings-based valuation case	Workshop (1 hr)
Week 06	The value from fundamental analysis	Lecture (2 hr)
Week 06	Earnings management case	Workshop (1 hr)
Week 07	Analysis of the statement of shareholder's equity	Lecture (2 hr)
Week 07	Equity investment project instructions	Workshop (1 hr)
Week 08	Analysis of the balance sheet and the income statement	Lecture (2 hr)
Week 08	Analysis of equity	Workshop (1 hr)
Week 09	Analysis of profitability	Lecture (2 hr)
Week 09	Reformulation analysis	Workshop (1 hr)
Week 10	Analysis of earnings growth	Lecture (2 hr)
Week 10	Profitability analysis case	Workshop (1 hr)
Week 11	Credit analysis and distress	Lecture (2 hr)
Week 11	Analysis of growth	Workshop (1 hr)
Week 12	Behavioural aspects of financial analysis	Lecture (2 hr)
Week 12	Credit analysis	Workshop (1 hr)

Attendance and class requirements

Lecture recordings: All lectures and seminars are recorded and will be available on Canvas for student use. Please note the Business School does not own the system and cannot guarantee that the system will operate or that every class will be recorded. Students should ensure they attend and participate in all classes.

Study commitment

Typically, there is a minimum expectation of 1.5-2 hours of student effort per week per credit point for units of study offered over a full semester. For a 6 credit point unit, this equates to roughly 120-150 hours of student effort in total.

Required readings

Penman, S. (2012). Financial Statement Analysis and Security Valuation, 5th Edition, McGraw-Hill.

Learning outcomes

Learning outcomes are what students know, understand and are able to do on completion of a unit of study. They are aligned with the University's graduate qualities and are assessed as part of the curriculum.

Outcomes
Graduate qualities

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

LO1. Analyse the key drivers of value creation within a business. Evaluate the quality of financial statement information as produced by accounting. Apply financial analysis to analyse creditworthiness. Produce equity investment valuation reports. Understand public equity investment appraisal. Appreciate the impact of key behavioural biases when analysing financial information.

Graduate qualities

The graduate qualities are the qualities and skills that all University of Sydney graduates must demonstrate on successful completion of an award course. As a future Sydney graduate, the set of qualities have been designed to equip you for the contemporary world.

GQ1	Depth of disciplinary expertise Deep disciplinary expertise is the ability to integrate and rigorously apply knowledge, understanding and skills of a recognised discipline defined by scholarly activity, as well as familiarity with evolving practice of the discipline.
GQ2	Critical thinking and problem solving Critical thinking and problem solving are the questioning of ideas, evidence and assumptions in order to propose and evaluate hypotheses or alternative arguments before formulating a conclusion or a solution to an identified problem.
GQ3	Oral and written communication Effective communication, in both oral and written form, is the clear exchange of meaning in a manner that is appropriate to audience and context.
GQ4	Information and digital literacy Information and digital literacy is the ability to locate, interpret, evaluate, manage, adapt, integrate, create and convey information using appropriate resources, tools and strategies.
GQ5	Inventiveness Generating novel ideas and solutions.
GQ6	Cultural competence Cultural Competence is the ability to actively, ethically, respectfully, and successfully engage across and between cultures. In the Australian context, this includes and celebrates Aboriginal and Torres Strait Islander cultures, knowledge systems, and a mature understanding of contemporary issues.
GQ7	Interdisciplinary effectiveness Interdisciplinary effectiveness is the integration and synthesis of multiple viewpoints and practices, working effectively across disciplinary boundaries.
GQ8	Integrated professional, ethical, and personal identity An integrated professional, ethical and personal identity is understanding the interaction between one’s personal and professional selves in an ethical context.
GQ9	Influence Engaging others in a process, idea or vision.

Outcome map

Learning outcomes	Graduate qualities
Learning outcomes

Responding to student feedback

This section outlines changes made to this unit following staff and student reviews.

No changes have been made since this unit was last offered.

Additional information

More information can be found on Canvas.

Disclaimer

The University reserves the right to amend units of study or no longer offer certain units, including where there are low enrolment numbers.

To help you understand common terms that we use at the University, we offer an online glossary.

Current students

Overview

Overview

Unit details and rules

Teaching staff

Assessment

Assessment

Assessment summary

Assessment criteria

Late submission

Academic integrity

Learning support

Learning support

Simple extensions

Special consideration

Using AI responsibly

Weekly schedule

Weekly schedule

Attendance and class requirements

Study commitment

Required readings

Learning outcomes

Learning outcomes

Graduate qualities

Outcome map

Responding to student feedback

Responding to student feedback

Additional information

Additional information

Disclaimer

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