Critical Analysis

Post (via link to a website or pdf) an article from a business publication (e.g., Wall Street Journal, Bloomberg, etc.) or a research report (publish at this month please) and write a critical analysis using the tools and concepts from the class. The key to this exercise is to be skeptical of what you read. To use the concepts and tools from the class to help articulate the issues or concerns you note in the article. You will be surprised how much we read in the business press doesn’t stand up to thoughtful analysis.

I am challenging you to find an article, report or an analysis that discusses any course topic and to prepare a short critique. For example, M1.1 America Online on page 30 of your text (ebook – p. 42) is a classic illustration of circular reasoning. The author of the Wall Street Journal editorial uses price to justify AOL’s price. Such thinking is commonly present in the business press. That is, people make assertions that do not stand up to careful consideration. For the first component, post (via link to a website or pdf) an article from a business publication (e.g., Wall Street Journal, Bloomberg, etc. which published current, like this month) or a research report and prepare a short critique.

The course focuses on financial statement analysis topics in the evaluation of the firm and the prediction of its future condition. The course is designed to provide: i. the skills to analyze financial statements, ii. exposure to public sources of financial information used in the capital markets, iii. an appreciation for the usefulness and limitations of financial statement analysis, With these objectives, we investigate the following topics: i. fundamental analysis ii. knowledge of complex accounting rules iii. forecasting iv. valuation of the firm.

Course concepts:

– Value Creation

– Fundamental Analysis

– Financial statement relations

– Valuation of company or bonds

– Dividend Discount Model

– Discounted Cash Flows

– Earning vs. Cash flow

– Residual Earning Model

– Reverse Engineering

– EPS Growth rates

– Reformulated Financial Statement (B/S, I/S, SE)

– Dirty Surplus

– Employee Benefits

– Free Cash flows

– ROCE analysis

– Growth analysis

– Residual Operating Earning


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