Fundamental Analysis Module (Intermediate) Practice Exam
Fundamental analysis is a core methodology for valuing stocks, relying heavily on effective security analysis to make sound investment decisions. This module provides an introductory understanding of fundamental analysis and explores a range of valuation techniques used in investment decision-making.
Key Objectives:
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Build a strong foundation in the principles of fundamental analysis
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Understand various valuation methods used to assess securities
Who should take the exam?
The exam is for:
- Students of Management and Commerce
- Finance Professionals
- Stock Analysts
- Employees with Treasury & Investment division of banks and financial institutions
- Anybody having interest in this subject
Exam Details
- Exam Name: Fundamental Analysis Module (Intermediate)
- Exam Languages: English
- Exam Questions: 60 Questions
- Time: 120 minutes
- Passing Score: 60%
Course Outline
The Exam covers the given topics -
Topic 1: Overview of Fundamental Analysis
- What is fundamental analysis?
- Why is fundamental analysis relevant for investing? - Efficient Market Hypothesis (EMH), Arguments against EMH, Does fundamental analysis work?
- Steps in Fundamental Analysis
Topic 2: Learn about the Basics
- Concept of “Time value of Money”
- Interest Rates and Discount Factors – Opportunity cost, Risk-Free Rate, Equity Risk Premium, The Beta, Risk Adjusted Return (Sharpe Ratio)
Topic 3: Understanding Financial Statements
- Where can one find financial statements – The Director’s Report, The Auditor’s Report, Financial Statements: Balance Sheet, Income Statements, Schedules and Notes to the Accounts, Cash Flow Statement
- Financial Statement Analysis and Forensic Accounting
- Comparative and Common-size financial statements
- Financial Ratios
- Du-Pont Analysis
- Cash Conversion cycle
- The Satyam case and need for forensic accounting
Topic 4: Learn about Valuation Methodologies
- Top-Down valuation (EIC Analysis) – Economy, Industry, Company
- Discounted Cash Flow (DCF) Models
- Dividend Discount Model (DDM)
- Free Cash Flow to Firm (FCFF) and Free Cash Flow to Equity (FCFE) based DCF
- Sum of the parts (SOTP)
- Price-to-Earnings (PE) ratio.
- Price to Book Value PB Ratio.
- EV/ EBITDA
- Price to Sales (P/S) Ratio
- Special cases of valuation – IPOs, Financial Services firms, Net interest mar with in (NIM), Firms negative cash flows, Acquisition valuation, Distressed companies