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Unit of study_

ACCT6003: Fundamental Analysis for Equity Investment

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.

Details

Academic unit Accounting
Unit code ACCT6003
Unit name Fundamental Analysis for Equity Investment
Session, year
? 
Semester 1, 2021
Attendance mode Normal day
Location Camperdown/Darlington, Sydney
Credit points 6

Enrolment rules

Prohibitions
? 
None
Prerequisites
? 
ACCT5001 and FINC5001
Corequisites
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None
Assumed knowledge
? 

QBUS5001 or QBUS5002

Available to study abroad and exchange students

Yes

Teaching staff and contact details

Coordinator Nurul Alam, nurul.alam@sydney.edu.au
Type Description Weight Due Length
Final exam (Take-home extended release) Type E final exam Take-home final project
2500 words
40% Formal exam period 48 hours
Outcomes assessed: LO1
Assignment hurdle task Weekly Assignments
60% Ongoing Varied lengths
Outcomes assessed: LO1
hurdle task = hurdle task ?
Type E final exam = Type E final exam ?

Weekly assignments: There are 10 individual weekly assignments worth 6 marks each, thus all adding to the total of 60 marks (out of 100). The due date for weekly assignment will be advised in class. 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). You will be assigned a public company for which you will perform financial analysis as required. The details of the take-home project will be discussed 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.

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.

Special consideration

If you experience short-term circumstances beyond your control, such as illness, injury or misadventure or if you have essential commitments which impact your preparation or performance in an assessment, you may be eligible for special consideration or special arrangements.

Academic integrity

The Current Student website provides information on academic honesty, academic dishonesty, 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 dishonesty or plagiarism seriously.

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

WK Topic Learning activity Learning outcomes
Week 01 Introduction to valuation and business strategy analysis Lecture (2 hr) LO1
Week 02 Using financial statements in valuation Lecture (2 hr) LO1
Week 2 tutorial Workshop (1 hr) LO1
Week 03 Accounting analysis and earnings management Lecture (2 hr) LO1
Week 3 tutorial Workshop (1 hr) LO1
Week 04 Earnings quality, measurement issues and adjustments Lecture (2 hr) LO1
Week 4 tutorial Workshop (1 hr) LO1
Week 05 Financial Analysis - Part 1 Lecture (2 hr) LO1
Week 5 tutorial Workshop (1 hr) LO1
Week 06 Financial Analysis - Part 2 Lecture (2 hr) LO1
Week 6 tutorial Workshop (1 hr) LO1
Week 07 Forecasting and valuation - Part 1 Lecture (2 hr) LO1
Week 7 tutorial Workshop (1 hr) LO1
Week 08 Forecasting and valuation - Part 2 Lecture (2 hr) LO1
Week 8 tutorial Workshop (1 hr) LO1
Week 09 Credit risk analysis Lecture (2 hr) LO1
Week 9 tutorial Workshop (1 hr) LO1
Week 10 Financial policy and cost of capital Lecture (2 hr) LO1
Week 10 tutorial Workshop (1 hr) LO1
Week 11 M&A and IPOs Lecture (2 hr) LO1
Week 11 tutorial Workshop (1 hr) LO1
Week 12 Corporate communication and governance Lecture (2 hr) LO1
Week 12 tutorial Workshop (1 hr) LO1
Week 13 Revision Lecture (2 hr) LO1
Week 13 tutorial Workshop (1 hr) LO1

Attendance and class requirements

Lecture recordings: All lectures 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

Palepu, K. G., Healy, P. M., and Peek, E. (2019). Business analysis and valuation: IFRS edition. 5th Edition, Cengage learning.

 

Useful References:

Miller-Nobles, T., Mattison, B., Mataumura, E., Best, P., Keene D., Tan, R., Willet, R., (2021), Financial Accounting, 9th Edition, Pearson Australia, Melbourne

Accounting information for business decisions. Cengage, Cunningham et al. 4th edition

Contemporary Accounting – A Strategic Focus (10th ed) 2020. Phil HANCOCK, Peter ROBINSON, Mike BAZLEY

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

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.

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
GQ1 GQ2 GQ3 GQ4 GQ5 GQ6 GQ7 GQ8 GQ9
No changes have been made since this unit was last offered.

Disclaimer

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