Business Analysis and Valuation

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Business Analysis and Valuation , co-authored by Krishna Palepu and Paul Healy , and published by Cengage, is the premier textbook used for teaching business valuation in MBA and finance programs across the world.  The 5th edition of the book was released in summer 2012.  It replaces the 4E edition of the book.  It won the American Accounting Association’s Wildman Award  for its impact on management practice.  It also won the Notable Contribution to the Accounting Literature Award for its impact on academic research.  Business Analysis and Valuation is unique in that it provides a link between accounting and valuation and corporate strategy.

It is accompanied by a business analysis and valuation software model published by the Harvard Business School Publishing Company.



BUSINESS ANALYSIS & VALUATION: USING FINANCIAL STATEMENTS, TEXT & CASES, 5E  by Krishna Palepu and Paul Healy allows you to undertake financial statement analysis using a four-part framework

(1) business strategy analysis for developing an understanding of a firm’s competitive strategy;

(2) accounting analysis for representing the firm’s business economics and strategy in its financial statements, and for developing adjusted accounting measures of performance;

(3) financial analysis for ratio analysis and cash flow measures of operating; and

(4) prospective analysis. Then, you’ll learn how to apply these tools in a variety of decision contexts, including securities analysis, credit analysis, corporate financing policies analysis, mergers and acquisitions analysis, and governance and communication analysis.

This text also offers one Harvard case per chapter as well as an entirely separate section (Section 4) for additional cases

New to the 5th edition:

The 5th edition of Business Analysis and Valuation by Krishna Palepu and Paul Healy, just released in 2012, has many updates, including:

  • Updated Examples. Both the smaller, in-chapter examples and the larger, multi-chapter example using new companies TJX and Nordstrom have been revised and updated for currency so students have the latest information to support concepts in the text.
  • New Multi-Chapter Example Companies. For the fifth edition, the multi-chapter example uses TJX and Nordstrom, and is more fully integrated and developed to illustrate the business analysis and valuation process to include accounting adjustments.
  • New Coverage of both Unadjusted and Adjusted Financial Statements for Analysis. For the fifth edition, new companies TJX and Nordstrom illustrate ratio analysis in Chapter 5 using both unadjusted and adjusted financial statements.
  • Revised and Updated IFRS Coverage. The discussion of US GAAP / IFRS convergence, discussion and examples on comparing IFRS/US GAAP companies, and brief discussion on remaining differences between IFRS and US GAAP have been updated for currency.
  • Expanded Discussion of Fair Value. Students will have a full briefing on fair value accounting in the updated discussion included in the fifth edition.
  • New Online Version of BAV Software. This financial statement analysis and valuation tool has a new, online interface and features, making data imports easier and analysis clearer and more graphical.


“This is an excellent text which tackles the real issues of accounting analysis and valuation. The conversion to IFRS has been done well. The key strengths are the high level of explanation and the use of real life examples, as well as the fact that the text tackles real problems of forecasting, analysis and valuation in a way which no other text I know does.”

Simon Pallett, University of Newcastle

“All needed modifications have been comprehensively and excellently done. These modifications are appropriate, making the book attractive for European readers.”

Lakshmanan Shivakumar, London Business School

“What makes this book attractive for my course is that it continues where other textbooks stop: it focuses on the link between accounting figures and corporate strategy.”

Ignace de Beelde, Ghent University

“I think that the new edition has succeeded in creating an alternative for PHB for European students. While keeping the original text intact, the authors have managed to give it a European tone.”

Sanjay W. Bissessur, University of Amsterdam Business School


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 Business Analysis and Valuation software model

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