• introduction to business valuation,
• logistics of course and assessment details,
• basic concepts of risk under business, operating, and financial risks,
• transaction cost theory,
• information asymmetry and resulting "lemon" problem,
• the capital market and its intermediaries, and
• an introduction to Chapter 3 and 4.

• introduction to business analysis,
• PESTEL for maco environmental analysis,
• industry analysis using Porter's Five Forces model and factors to evaluate pricing power,
• firm and SWOT analysis using value chain analysis, product life cycle, BCG matrix, ansoff matrix for organic growth,
• Porter's generic strategies of cost leadership and differentiation, factors to consider, and what define success,
• sustainable competitive advantages, and
• transaction cost theory interpretation on make vs buy and conglomerate vs coop.

• 3 questions to ask regarding the quality of the accounting information provided by management,
• the why, the pros, and the cons of providing management discretions within GAAP,
• potential noises and biases that can decrease accounting quality = GAAP rigidity, management forecasting errors, and systematic accounting choice,
• management objectives that might cause systemactic accounting choices,
• potential red flags that might indicate potential biases in the recording of the firms' financial and accounting information,
• Conservative accounting is not good accounting,
• Not all unusual accounting is questionable,
• some basic issues when selecting firm for the group project assignment,
• some basic issues when collecting information available for the selected firm, and
• the source of input for historical financial information for financial projection model.

• accounting definition of assets and liabilities,
• why and how to overstate assets,
• why and how to understate assets,
• why and how to understate liabilities, and
• why and how to misstate equity.

• financial ratios introduction,
• profitability ratios,
• leverage ratios,
• liquidity ratios,
• activity ratios,
• market ratios, and
• cash flow preparation.

• using industry sales and growth as starting point for expected future sales growth of your firm,
• your firm's strategies and competitive positive are also input to your firm's future sales growth level,
• sales growth of firms mean-reverts to industry growth level over time as firms competes,
• CGS and other expenses should be updated for future development on these cost,
• net income or earnings can fluctuates short term,
• return on assets of firms in industry should mean-reverts to industry ROA,
• Dupont analysis of breaking down ROA into operating margin and asset turnover can help determine strategy being used by firm,
• working capital ratios can be used to set A/R, inventory, and A/P levels based on sales projection,
• asset turnover can be used to set total asset level,
• equity is increased by net income being accrued in retained earnings,
• debt level is the plug that balance the balance sheet,
• debt equity level (capital structure) can be adjusted if debt level is too high,
• can assume equity issued to repay debt to maintain reasonable capital structure,
• scenario analysis should be performed for outcomes of potential best or worst case scenario,
• midterm test review of topics,
• introduction to valuation approaches,
• introduction to multiples approach,
• time value of money review, and
• introduction to dividend discount approach with no growth and constant growth dividends.

• constant growth dividend valuation calculations,
• cost of equity used as discount rate for DDM,
• multiples approach working and implementation details,
• introduction to FCFE and FCFF,
• calcuation of FCFE
• FCFE adjustment from NI for NWC, depn, capex, change in debt,
• PV of year 1 to year 10 and terminal value calculation using cost of equity,
• calculation of equity value and value per share,
• calculation of FCFF,
• FCFF adjustment from NOPAT fir NWC, depn, capex,
• PV of year 1 to year 10 and terminal value calculation using WACC,
• calculation of firm value,
• firm value minus debt value for equity value and value per share, and
• review of excel structure for equity valuation using FCFE and FCFF.

• project numbers to estimate - sales growth forecast, cost of goods sold, other expenses,
• project numbers to estimate - working capital, total assets, depreciation, and cash capex,
• project numbers to estimate - debt to equity level,
• set up equity valuation using FCFE,
• set up equity valuation using FCFF,
• introduction to abnormal earnings concept for valuation, and
• set up equity valuation using abnormal earnings concept.

• midterm test feedback,
• interim group report feedback,
• what your excel projection should look like with the valuation approaches,
• terminal value determination from chapter 8,
• differences between the valuation methods from chapter 7, and
• valuation issues from chapter 8.

• cost of equity using CAPM,
• cost of debt after tax,
• WACC calculation,
• equity valuation in chapter 9,
• credit analysis in chapter 10, and
• the good and bad of mergers and acquisition in chapter 11.

• potential benefits of and issues with mergers and acquisitions,
• 3 approaches to determine acquisition offer price,
• considerations on forms of payment on acquirer,
• considerations on forms of payment on target shareholders,
• potential acquisition outcomes,
• why management overly optimistic,
• why management do not want share price to be undervalued or overvalued,
• communication through accounting / financial reporting,
• communication through financial policies, and
• alternative forms of investor communication.

• final exam scope and review,
• final presentation of group project report.

For this course, a general purpose non-financial calcuator can be used. Students who do not have ready access to a financial calculator should be able to perform all the required analysis and calculations using a general purpose non-financial calculator for the tutorials, assignments, mid-term test, and final examination.

You can also use a non-programmable financial calculator for the tutorials, assignment, mid-term test, and final examination. Common financial calculators are HP12c and TI BAII PLUS. User manual in simplified chinese and a tutorial for the HP12c can be found here and a simple tutorial for the HP12c can be found here. User manual for the TI BAII can be found here.

Regardless of the types of calculators used for this course, students are responsible for their own equipment and they cannot be shared in a quiz, test, or examination situation. As a result, students MUST bring their own calculators to each class. In addition, each student must be proficient in the use of their own equipment.

Electronic translators CANNOT be used for quiz, test, or examination situations, but they can be used during class (only with volume off) and your own study time.

There are specific terms that apply to accounting and finance, and there are various online sources that can help students understand these terms.

Download and print for reference:

• Hong Kong Exchange glossary of terms (English to Chinese)
• 88translation.com finance dictionary (Chinese to English, English to Chinese)

Online finance dictionaries:

• Reuters Chinese to English and English to Chinese finance dictionary
• Goldman Sachs English to Chinese finance dictionary
• Goldman Sachs Chinese to English finance dictionary
• Morgan Stanley English to Chinese finance dictionary

Other unverified sources of financial references:

• Finance Street - a finance related site prepared by the government
• Financial glossary of terms
• List of dictionaries