Analysis of Financial Statements

Classes have a theoretical-practical nature, allowing students to actively participate in the debate and discussion of real cases (Portuguese
listed companies) proposed. The issues of green investments/financing, their importance and opportunity, are stimulated. Therefore, the
consolidation of knowledge is recommended with practices that are intended not only to understand the syllabus, but to develop individual
capabilities, critical appreciation and prospective vision. We seek to explore the benefits and challenges of digital technologies for learning
and teaching itself. Research is also instigated by taking advantage of the knowledge accumulated up to this UC and the wide range of
economic and financial data available on companies as well as the macroeconomic environment.

The fundamental objective of this curricular unit is to provide students with a set of instruments and methods that allow them to carry out
diagnoses on the economic and financial situation of a company, as well as prognoses on its future performance, namely using
assumptions to obtain the company’s value. Students must know how to discuss issues of corporate governance and sustainability,
understanding the investment that Portuguese listed companies have been making in complying with the SDGs.
Skills to Acquire:
• Identify the sources of information necessary to prepare a company’s financial analysis report and its commitment to complying with the
SDG;
• Be equipped with the most important methods and techniques to draw conclusions regarding the economic and financial situation of a
company and thus know how to evaluate the company and the business.
• Understand, for the companies analyzed, the type of green financing and commitments made with ESG factors.

I. INTRODUCTION
Financial balance analysis
Analysis of profitability, earnings per share and growth.
Analysis of freed resources, added value, productivity and CF
Risk analysis: operational risk and financial risk
Scoring and rating
Credit scoring-insolvency risk models
II. CAPITAL STRUCTURE
CAPM and cost of capital: Levered and unlevered beta. Typology of capital costs
Choosing types of financing
Benefits and cost of debt
The notion of opportunity cost of invested capital
The MM theorem
Agency and bankruptcy costs
III. COMPANY AND BUSINESS EVALUATION
Value Concept
Estimation of cash flows, growth rates and residual value.
DCF-based models
Valuation based on multiples
IV. CORPORATE SUSTAINABILITY
Framework
Importance of the SDGs
Green financing
V. STRATEGY, CAPITAL RESTRUCTURING AND VALUE
Company restructuring mechanisms
Corporate governance and corporate control
VI- Options in Company Valuation
Traditional models
Real Options

NAO