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University of Exeter Business School

Investment Analysis 1

Module titleInvestment Analysis 1
Module codeBEAM032
Academic year2023/4
Module staff

Dr Jiaoshan/ Sophie Li (Convenor)

Duration: Term123
Duration: Weeks


Number students taking module (anticipated)


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 financial reporting concepts and terminology which are essential to operate in the corporate world.


Students learn to synthesize information from public sources, to evaluate a firm’s performance and financial position. These analytical skills will be directly applicable to roles such as equity or credit analysts and professional investors.

Module aims - intentions of the module

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.

Intended Learning Outcomes (ILOs)

ILO: Module-specific skills

On successfully completing the module you will be able to...

  • 1. explain how financial statements are prepared;
  • 2. develop a framework for assessing a firm’s financial performance;
  • 3. master the different “tools” used to perform a financial statement analysis;
  • 4. explain the discretion available to managers in preparing financial statements;
  • 5. develop an awareness of the limitations of financial statements and recognise what information they can and cannot provide.

ILO: Discipline-specific skills

On successfully completing the module you will be able to...

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

ILO: Personal and key skills

On successfully completing the module you will be able to...

  • 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;
  • 10. work effectively in a group setting.

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.

Part 1: Introduction to financial statements 

i) Users and uses of accounting information; the basic accounting equation; articulation and purpose of financial statements.

ii) Accounting principles; accruals.

iii) Understanding the balance sheet/statement of financial position and income statement/profit & loss statement. 

Part 2: Analysis of financial statement components

i) Fixed Assets, Intangible Assets, Asset Impairments, Financial Assets and Debt.

i) Revenue Recognition, Inventories and Accounting Provisions.

iii) Introduction to Consolidation and Business Combinations

Part 3: Financial statement analysis

i) Cash Flow Statement.

ii) Business analysis, Porter’s five forces common sized balance sheet and income statement

iii) Ratio analysis

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
Scheduled Learning and Teaching Activity30Lectures (10 x 3 hours)
Scheduled Learning and Teaching Activity6Tutorials (3 x 2 hours)
Guided Independent Study114Reading, preparation for classes and assessments

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
Examination702 hours1-9Suggested solutions on ELE
Group Assignment (including 5% peer evaluation)302000 words1-10Written

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 (70%)2 hours written examination (70%)1-10August/September Reassessment Period
Group assignment (30% of which 5% peer-evaluation)Individual coursework 1,000 words (30%) 1-10August/September Reassessment Period

Indicative learning resources - Basic reading

Required reading:

Financial Accounting with International Financial Reporting Standards, by Weygandt, Kimmel and Keiso, 4th Edition, Wiley, 2019

Supplementary reading:

Financial Accounting and Reporting, A Global Perspective, by Stolowy, Ding and Paugamm 6th Edition, Cengage, 2020.

Indicative learning resources - Web based and electronic resources


Key words search

Financial reporting, equity analysis, IFRS

Credit value15
Module ECTS


Module pre-requisites


Module co-requisites


NQF level (module)


Available as distance learning?


Origin date


Last revision date