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FINANCIAL MARKET COURSES

Equities – Research & Valuation

Fundamental analysis of stock markets has a broad scope, incorporating both a qualitative and quantitative assessment of companies, in attempt to derive an intrinsic value for the stocks. While a qualitative assessment is essential, it naturally incorporates factors that are difficult or impossible to quantify.

 

This course focuses on the quantitative side of things. Ratio analysis, the subject of the first part of the course, is one form of quantitative assessment. It provides a way of summarizing a large volume of financial accounting information into simple measurements. The second part of this course looks at stock valuation models, beginning with the oldest and simplest method of valuing stocks - the dividend discount model - which equates the fundamental value of a stock to the present value of the stock's expected future dividends. The divided discount model is regarded by many analysts these days as conservative and outmoded, although much of the intuition from the model is also embedded in other valuation models. Two of these - the discounted cash flow model and residual income model - are also covered in this course.

  • OBJECTIVES

    On completion of this course, you will be able to:

    Separate a company's return on equity into a number of key financial metrics in order to identify where within the firm superior/inferior return is being earned

    Describe the different models used to estimate the fundamental value of a stock

  • COURSE OUTLINE

    Topic 1: Primary Financial Ratios

    Return on Equity (ROE)

    o Return on Net Operating Assets (RNOA)

    o Return on Debt

    Solvency & Liquidity Measures

    Topic 2: Valuation Methods & Analysis

    Dividend Discount Model (DDM)

    Discounted Cash Flow (DCF) Model

    Residual Income Model (RIM)

    Terminal Value

  • PREREQUISITE KNOWLEDGE

  • ESTIMATED COMPLETED TIME

    75 Minutes

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