Accounting and Financial Analysis

While financial statements represent the standard way to analyze past business activities, they are also the primary tool used to forecast future business activities to derive cash flows. We will use a structured framework that allows analyzing the key value drivers of a firm's or projects value. Cash flows are used as inputs in discounted cash flowornet present value analyses. To perform these analyses effectively, students needa solid understanding of the relation betweena project's risk, the risk-contribution of its funding with equity or debt, and the return that investors that fund projectsrequire.