Investment Analysis 1

Module description


This is the first module of two in Investment Analysis. Its principal function is to ensure that you are able to use the tools available for equity valuation using annual reports. You will learn how to critically assess the content of annual reports. 

Additional Information:


Basic understanding of accounting and financial statement articulation.


This module uses International Financial Reporting Standards (IFRS) which apply to more than 100 countries around the world, and, therefore, prepares you for an international career.


Presentations, PowerPoint slides and tutorial notes are all made available on the ELE (Exeter Learning Environment).

External Engagement

The content helps familiarise you with the standards of the IASB (International Accounting Standards Board).


In this module, students acquire skills which will be directly applicable to roles such as equity analysts and investors of various kinds. Students learn to synthesize information from public sources, to evaluate a firm’s performance and financial position.

Full module specification

Module title:Investment Analysis 1
Module code:BEAM032
Module level:M
Academic year:2020/1
Module lecturers:
  • Dr Victoria Patsika - Convenor
Module credit:15
ECTS value:






Duration of module: Duration (weeks) - term 1:


Module aims

During this course you will study how financial statements are prepared and then explore the nature and use of accounting information relating to business entities. The underpinning conceptual framework is that of ‘decision usefulness’; i.e., that the primary purpose of accounting (and financial reporting) is to provide useful information to the stakeholders of enterprises. The economic framework within which such information is produced is reviewed, as are the strengths and limitations of published financial statements.

The financial information a company discloses is used by investors and analysts to determine how to assess a company in the marketplace. We therefore adopt a user perspective, rather than a preparer one, because most participants will become users of financial statements, internal (managers, executives) or external (investors, analysts), rather than preparers of financial statements. Knowledge of basic rules that govern the production of financial statements is essential, as this will underpin your ability to analyse reported numbers.

ILO: Module-specific skills

  • 1. understand how financial statements are prepared according to accounting rules.
  • 2. develop a framework for assessing a firm’s financial performance that is useful to fund managers, financial analysts, strategy advisors and the stakeholders of the company.
  • 3. master the different “tools” used to perform a financial statement analysis.
  • 4. appreciate the discretion available to managers in preparing financial statements
  • 5. demonstrate an awareness of the limitations of financial statements and recognise what information they can and cannot provide

ILO: Discipline-specific skills

  • 6. read, understand and analyse a firm’s financial performance and position from its annual reports.
  • 7. understand the effects of various events on a company's financial statements

ILO: Personal and key skills

  • 8. apply a set of structured techniques to reach a well defined decision within a noisy environment, where a clearly defined unique solution does not exist.
  • 9. communicate a detailed and convincing company assessment, appropriate both to a practitioner as well as an academic audience.

Learning activities and teaching methods (given in hours of study time)

Scheduled Learning and Teaching ActivitiesGuided independent studyPlacement / study abroad

Details of learning activities and teaching methods

CategoryHours of study timeDescription
Contact hours30Lectures (10 x 3 hours)
6Tutorials (3 x 2 hours)

Formative assessment

Form of assessmentSize of the assessment (eg length / duration)ILOs assessedFeedback method
Review exercisesEach session is accompanied by a review exercise. 1-9Correct answers
Tutorial exercisesEach tutorial will have several questions.1-9Correct answers

Summative assessment (% of credit)

CourseworkWritten examsPractical exams

Details of summative assessment

Form of assessment% of creditSize of the assessment (eg length / duration)ILOs assessedFeedback method
Examination802 hours1-9Correct answers
Group Assignment (including peer evaluation)204 questions1-9Written feedback

Details of re-assessment (where required by referral or deferral)

Original form of assessmentForm of re-assessmentILOs re-assessedTimescale for re-assessment
2 hours written examination and Group Assignment2 hours written examination (100%)1-9August reassessment period

Syllabus plan

The following is an indicative of the topic we will aim to cover in this course. Some topics may not be covered if time does not allow us to learn them.

  • Course overview and introduction
  • The balance sheet assets, liabilities and equity
  • The income statement 
  • The statement of cash flows
  • Ratio analysis
  • Fixing reported numbers – depreciation, R&D, off balance sheet items
  • Forecasting financial statements     
  • Reading annual reports

Indicative learning resources - Basic reading

Required reading:

K. Palepu, P. Healy, V. Bernard, and E. Peek (2013), Business Analysis and Valuation, IFRS edition (3rd edition), text only; Cengage Learning Business Press.

Supplementary reading:

  • Kimmel, Weygandt and Kieso, Financial Accounting: Tools for Business Decision Making, 5th Edition, Wiley, 2008.

Module has an active ELE page?


Indicative learning resources - Web based and electronic resources


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