Dr. Susan Hume 609-771-2305 219 School of Business hume@tcnj.eu !ffice Hours" #on. $ %hu. 12"30-1"30 &m 'e. () a&&ointment Course Description and Obecti!es %his course focuses on unerstanin* ho+ to use an e,aluate &u(lic financial statements from the ,ie+&oint of not onl) the financial anal)st- (ut also the firm- creitors- an in,estors. 'e e.&lore accountin* an cash flo+ anal)sis- creit anal)sis- an forecaste sales an earnin*s. /n the course of these to&ics- +e +ill nee to unerstan an a&&l) &o&ular financial moels usin* statistics. 0n im&ortant &ortion of this course +ill (e eicate to usin* these moels +ith #icrosoft 1.cel an statistical &ac2a*e Stata. 0s a financial anal)st )ou +ill anal)3e one firm- &re&are a +ritten re&ort an ma2e a &resentation to the class. %o&ics inclue" 'hat are accountin* isclosures- iscretionar) choices an &otential &ro(lems in re&ortin*4 'hat are common financial statement istortions-is conser,ati,e accountin* im&ortant to in,estors4 /s cash flo+ anal)sis ifferent from accountin* statement anal)sis4 'hat ratios are im&ortant to financial anal)sts4 %he firm4 5reitors4 /n,estors4 Ho+ can +e forecast sales4 1arnin*s4 'e use linear an non-linear moels +ith sin*le an multi&le ,aria(les. 'hat funamental characteristics are im&ortant to financial anal)sts4 'hat are the factors that ri,e e(t ratin*s4 Ho+ can +e moel an (etter unerstan these ifferent to&ics usin* statistics4 'hat are the ata issues that im&act )our anal)ses4 Catalo" Description 6inancial anal)ses of &u(licl) hel firms usin* 7uantitati,e moelin*. 0nal)sis of firm8s financial statements (ase on financial anal)st stanars. De,elo& an unerstanin* of the im&ortance of financial statements to financial anal)sts- creitors an in,estors. 1 Course #urpose %he &ur&ose of this class is to a,ance )our unerstanin* of ho+ to use &u(licall) re&orte financial information to (etter anal)3e firms usin* 7uantitati,e techni7ues. 'e +ill a&&l) )our finance- economics an accountin* s2ills to &ro(lems from toa)9s (usiness ne+s to hel& us unerstan +hat is containe in financial re&orts- +h) firms re&ort certain information- an ho+ to (e a so&histicate user of this information. Finance #ro"ra$ %earnin" Obecti!es %his course meets the follo+in* finance &ro*ram learnin* o(jecti,es" 6ulfillment of these o(jecti,es in,ol,es ac7uirin* se,eral s2ills. %he course +ill em&hasi3e :i; anal)3in* financial statements to *ain familiarit) +ith the t)&es of transactions firms en*a*e in- :ii; forecastin* a firm8s sales an earnin*s usin* statistics- :iii; unerstanin* the accountin*-relate choices that mana*ers ha,e for transactions an the rationale (ehin the ,arious methos- :i,; a&&reciatin* the com&le.it) of accountin* ue to the :often consiera(le; iscretion an ju*ment in,ol,e in choosin* amon* alternati,e accountin* methos- an isclosin* information in financial statements- :,; usin* +ritten an oral communication s2ills- :,i; +or2in* effecti,el) in a team settin*- :,ii; accessin*- *atherin*- an anal)3in* ata (ases an a&&l)in* financial techni7ues to reach a conclusion- an :,iii; sol,in* &ro(lems usin* s&reasheet soft+are :1.cel; an statistical soft+are :Stata or other a,aila(le in com&uter la(;. Se,eral features of the course facilitate achie,in* the course o(jecti,es. %e.t(oo2s &ro,ie a conce&tual founation for the course () introucin* the statistical frame+or2. 0ccountin* reain*s &ro,ie the frame+or2 for accountin* &rinci&les an alternati,e methos. / also assi*n se,eral articles from the financial &ress for classroom iscussion. %hese articles +ill hel& )ou to *ain further unerstanin* of real-+orl financial re&ortin* issues. %he cha&ter &ro(lem assi*nments ser,e as the (asis of class iscussion an enhance )our unerstanin* of the to&ic. 6urther the &roject &ro,ies a challen*in* test of )our unerstanin* of the to&ic. /t is esi*ne to hel& illustrate the issues associate +ith financial statements anal)sis an the manner in +hich the information is isclose in cor&orate financial statements. Course &aterials 'e(tboo)s o Analysis of Financial Statements- () <amela <eterson Dra2e an 6ran2 =. 6a(o33i- 'ile) 2012- 3 r 1ition- /SB> 97?-1-11?-2999?-2 o Corporate Financial Analysis with Microsoft Excel- () 6rancis =. 5lauss- #c@ra+- Hill 2010- /SB> 97?-0-07-162??5-3 5om&uter +ith access to the /nternet an #icrosoft 1.cel statistical &ac2a*e. Brin* )our la&to& to class. /f )ou ha,e an 0&&le &rouct- )ou +ill nee to (orro+ a la&to& from the li(rar)- ,isit the com&uter la(s an team u& +ith another stuent to learn the material. 'e use @A/SB soft+are for simulations an sensiti,it) anal)sis. <urchase the &ac2a*e for )our com&uter an it is also installe in com&uter la(. Business ma*a3ines- ne+s&a&ers an 0nal)st 5onference 5alls - e.*. %he 'all Street =ournal- %he >e+ Cor2 %imes- %he Donon %imes an %he 1conomist. 0rticles an 0nal)st 2 5onference 5alls online ma) (e ae &erioicall) as a to&-notch financial anal)st re7uires (ein* current on the mar2et funamentals an com&an) ne+s. All other course $aterials *e+"+, proble$s, readin"s, proect details- are posted on Can!as or .ill be handed out in class. %o access resource materials- clic2 on the E<a*es8 ta( +hich sho+s the Scheule of 0ssi*nments +ith lin2s to the rele,ant material. Course Details /radin" @raes for the class +ill (e etermine as follo+s" COMPONENT POINTS (%) Quiz(zes) Mon. Sep. 22 25 points (5%) 3 "Project" Assignments 150 pts. (10% eac! 30% tota") 1 Mi#term (in c"ass$ computer "a%) &u. 'ct. ( )5 pts. (15%) Ana"*st Presentation (&eam) Mon. +ec. 1$ &u. +ec. , 100 pts. (20%) -ome.or/ 0 1"ass +iscussion 50 pts. (10%) 2ina" 34am (Ana"*st 5eport) +ue no "ater tan &ue. +ec. 10 100 pts. (20%) Total 500 pts. (100%) 0ui1*1es- %here is one scheule 7ui3. %here ma)(e &erioic unannounce 7ui33es intene to &ro,ie fee(ac2 on )our unerstanin* of accountin* anal)sis- the construction of financial statements an statistical conce&ts. 'ithout a soli unerstanin* of this material- the course +ill &ro,e to 3 (e ,er) ifficult. %he 7ui3:3es; is close (oo2 an close notes. 2(a$s %here +ill (e one e.am (ase on usin* statistics to sol,e &ro(lems usin* 1.cel. %his +ill (e in the com&uter la(. %his e.am is close (oo2 an close notes. 'he #roect <roject assi*nments are su(mitte at the start of the class &erio electronicall) an as a har co&). %he assi*nments are to (e com&lete in teams. %he assi*nments ma) not (e com&lete solel) () one mem(er of the team or a su(set of the team. Cou ma) not +or2 +ith other teams or use resources from other stuents. Cour &roject assi*nments must (e the ori*inal +or2 of )our team. <lease su(mit )our assi*nment +ith the follo+in* stanar format on the co,er &a*e of the first &a*e" FIN380 03 'ea$ Na$e Date: &&4DD45555 Na$e of Co$pany *e+"+, 6al4&art- F'e ac2no+le*e that +e ahere to the School of Business an %he 5olle*e of >e+ =erse) 5oe of 5onuct an 0caemic /nte*rit) <olicies an that +e i not recei,e an) outsie assistance on this assi*nment.G Analysts: :Cour names here; Final /rade %he chart (elo+ escri(es the final letter *rae. Letter Grade Numerical Values Descriptio A$ A6 (0.0 an# iger A 7 (3 0 iger A6 7 (0 6 (2.(( 3813993:&. ;or/ o< consistent"* ig stan#ar#$ so.ing superior master* o< course materia". =>$ =$ 0 =6 ?0.0 to ?(.(( => 7 ?) 6 ?(.(( = 7 ?3 @ ?A.(( =6 7 ?0 @ ?2.(( +BS&B:1&9C A='D3 AD35AE3. ;or/ o< ig Fua"it* so.ing strengt in accurac*$ un#erstan#ing$ an# insigt. 1>$ 1 )3.3 to )(.(( 1> 7 )) @ )(.(( 1 7 )3 @ )A.(( AD35AE3. &is gra#e imp"ies <ami"iarit* .it te content o< te course an# accepta%"e master* o< course materia". H 16 )0.0 to )3.2( =39'; AD35AE3. Signi<ies .or/ .ic in Fua"it* an#!or Fuantit* <a""s %e"o. te aGerage accepta%"e stan#ar# <or te course. +>$ + A0.0 to A(.(( + > 7 A) @ A(.(( + 7 A0 @ AA.(( +enotes a "imite# un#erstan#ing o< te su%ject matter$ meeting on"* te minimum reFuirements <or passing te course. 2 %e"o. A0.0 Bn#icates a #e<icienc* in un#erstan#ing o< course materia"$ an#!or <ai"ure to comp"ete reFuirements o< te course. 6i,e &oints +ill (e ae to )our home+or2 *rae if )ou (ecome Bloom(er* certifie in e7uit)- fi.e income an forei*n e.chan*e () Decem(er 1. Cou can achie,e this () sho+in* &h)sical co&) of each certificate. Class 'i$e %his four-creit course +ith a scheule fourth hour is esi*ne to inclue ri*orous aitional on-line home+or2 an case assi*nments- *rou& meetin*s for e,elo&ment of &resentations an home+or2 an assi*ne +ritten res&onses. / e.&ect &rofessional conuct in the classroom at all times. 1ach stuent is e.&ecte to come to class on time an to (e acti,el) in,ol,e in all class iscussions- incluin* as2in* 7uestions an sharin* )our 2no+le*e an e.&eriences +ith the rest of the class. / call on stuents that ,olunteer to &artici&ate- (ut a,oi callin* on the same stuents re&eatel). Ae+ar is not *i,en solel) for the 7uantit) of comments" %here are no &enalties for F+ron*G ans+ers. /t is the attem&t to thou*htfull) reason throu*h a &ro(lem or to as2 a &ertinent 7uestion that is ,alue an as to the classroom e.&erience for e,er)one. 5ol calls are fair *ame. #reparation for Class 5lass sessions +ill focus on interacti,e lectures an &ro(lem iscussions in +hich +e +ill aress (oth accountin* issues an im&ortant anal)tical statistical issues. %)&icall)- / +ill not &ro,ie etaile lectures that sho+ )ou ho+ to +or2 &ro(lems- an then e.&ect )ou to +or2 similar &ro(lems. /nstea- this class utili3es an acti,e learnin* a&&roach. Stuents are e.&ecte to use the a,aila(le resources to &re&are the assi*ne material &rior to comin* to class. <lease come an see me if )ou nee clarification of assi*nments an more assistance. / +ill use class time to hel& )ou unerstan the more com&le. issues an to hi*hli*ht the im&ortant ta2e-a+a)s from the assi*ne material. %he (ottom line is that if )ou o not ae7uatel) &re&are for class- )ou +ill ha,e trou(le follo+in* the iscussion. Deadlines <roject an home+or2 assi*nments must (e su(mitte () the start of class on the ate inicate for class iscussion in electronic ro&(o.. >o late case assi*nments +ill (e acce&te. !n &roject +or2 / also re7uire a har co&) ue () the start of class on ate inicate. 1.ams- &rojects an home+or2 an 7ui33es must (e su(mitte on time. /f an e.traorinar) circumstance +ill &re,ent )ou from com&letin* the +or2 on time- / +ill entertain a re7uest for an e.tension. %he re7uest must (e recei,e in ad!ance of the ealine- an +ill (e a&&ro,e on a 5 case-()-case (asis (ase &rimaril) on the e.tension8s im&act on an fairness to )our classmates. 'or2 turne in after the ealine has a &enalt) of 10 &oints for each H? hours :or &ortion thereof; ela) in su(mission. !,er the course of the semester )ou turn in se,eral ocuments +hich &ro,ie the (asis of )our final &roject. B) re7uirin* these intermeiate ealines- )ou +ill successfull) sta) current an not fall (ehin in the com&letion of the final &roject. Attendance 0ttenance is a 2e) &art of the learnin* e.&erience in the School of Business. Cou are e.&ecte to atten all class sessions an re&ort to me an) sessions that )ou miss. 0ttenance is critical an re7uires more than just (ein* &h)sicall) &resent in class. Seatin* +ill (e assi*ne. 0ttenance re7uires *i,in* effort to e.ercisesI&ro(lems &rior to class meetin*s an en*a*in* in iscussion an e(ate on critical 7uestions in class. <erfect attenance +ill (e re+are +ith 5 &oints ae to )our *rae in class iscussions an home+or2. Cou are allo+e 1 Fune.cuse a(senceG- +hich means )ou ma) miss one class +ithout im&actin* )our *rae in class iscussions an other acti,ities that ta2e &lace. /f )ou miss t+o sessions &er 13 +ee2 term- )our *rae +ill (e reuce () one thir of a &oint on a four &oint *rain* scale :e.*. from an 0 to an 0-; an another thir of a &oint for each aitional t+o misse sessions. <lease re,ie+ %5>=8s attenance &olicies at htt&"II&olicies.tcnj.euI&oliciesIi*est.&h&4oc/J913H /t9s !ery im&ortant that )ou &re&are for class in a,ance. / +ill s&en at least 3 hours of &re&aration for each hour of class time- an )ou shoul &lan to o the same. Some &re&aration shoul (e one &ri,atel)- an some re7uires *rou& +or2. @et to*ether an iscuss the material (efore class amon* )oursel,es. @o to the li(rar) an financial learnin* center to *ather the information an research the methos )ou nee to sol,e &ro(lems. /f )ou on9t &re&are )ou +ill miss a lot of +hat )ou coul *et out of this course. 6ritin" #olicy Because +ritin* is a funamental (usiness s2ill- )our *rae for each assi*nment +ill reflect- amon* other thin*s- )our a(ilit) to +rite- e,en for assi*nments +ith minimum +ritin*. 6ee(ac2 on )our +ritin* +ill (e &ro,ie as eeme necessar) an- if )our +ritin* nees im&ro,ement- )ou shoul see2 hel& from the 'ritin* 5enter at http://tutoringcenter.pages.tcnj.edu/humanities/writersplace/, or see2 hel& from someone +ho +rites +ell- or some other +ritin* source. %he res&onsi(ilit) to +rite +ell is )ours. #) res&onsi(ilit) is to hol )ou accounta(le for ho+ +ell )ou +rite. <oor +ritin* +ill (e reflecte in )our final *rae. 'he Colle"e of Ne. 7ersey and School of Business #olicies Code of Conduct Stuents are res&onsi(le for unerstanin* an u&holin* the Business School 5oe of 5onuct- online at"
htt&"II(usiness.&a*es.tcnj.euIour-&hiloso&h)Icoe-of-conuctI+ 6 Stuents are also res&onsi(le for 2no+in* %5>=8s 0caemic /nte*rit) <olic). Stuents ma) onl) re&resent +or2 that is their o+n. 5heatin* on tests- failin* to cite sources- or su(mittin* someone else8s +or2 are just a fe+ e.am&les that ma) result in failin* the entire course or ismissal from the colle*e. %5>=8s acaemic inte*rit) &olic) is a,aila(le on the +e( htt&"II&olicies.tcnj.euI&oliciesIi*est.&h&4oc/J76H2. %his course +ill (e conucte in accorance +ith the School an 5olle*e 5oe of 5onuct an 0caemic /nte*rit) <olicies. %he 7ui3 an e.ams are to (e ta2en ini,iuall). %he &roject assi*nments are to (e com&lete in teams accorin* to the instructions a(o,e. Ksin* or sharin* an) materials +ith stuents is consiere a ,iolation of these coes an +ill (e re&orte. /f )ou ha,e a coe 7uestion- &lease as2. Disability Based Acco$$odations A$ericans .ith Disabilities Act *ADA- #olicy 0n) stuent +ho has a ocumente isa(ilit) an is in nee of acaemic accommoations shoul notif) the &rofessor of this course an contact the !ffice of Differin* 0(ilities Ser,ices :609-771-2571;. 0ccommoations are ini,iuali3e an in accorance +ith Section 50H of the Aeha(ilitation 0ct of 1973 an the 0mericans +ith Disa(ilities 0ct of 1992. %5>=8s 0mericans +ith Disa(ilities 0ct :0D0; &olic) is a,aila(le on the +e(" htt&"II&olicies.tcnj.euI&oliciesIi*est.&h&4oc/J?0?2. Course 'opics *Subect to Chan"e-: 6hat the fir$, an analyst, and in!estor considers 6inancial 0nal)sis 1thical issues an recent challen*es Luantitati,e ,s. 7ualitati,e ata <ractical &ro(lems usin* financial statements :(alance sheet- income statement- statement of cash flo+; 0ccountin* isclosures on financial statements :iscretionar) choices- istortions; Aatios that are im&ortant to in,estors- creitors- financial anal)sts an mana*ement Simulations- forecasts for sales an earnin*s M ata &oints an anal)sis Data <atterns an #oelin* %echni7ues Sensiti,it) anal)sis 0ccessin* ata(ases an *atherin* information :S15- Bloom(er*- others; Sim&le linear re*ression - re,ie+ +hat is im&ortant for in&ut- +hat out&ut means %ime series ,s. cross-sectional ata Brea2in* time series ata into seasonal an tren com&onents >on-linear &rojections M e.&onential- &o+er an s-sha&e moels #ulti&le re*ression M common factors- multi&licati,e moel- &ol)nomial an other re*ressions <i,ot ta(les to anal)3e mar2et efficienc) 7 Data ,isuali3ation tools :to communicate )our anal)sis; Ksin* 1.cel in an automate +a)- Ksin* for other statistical &a*es for more statistical &o+er #onte 5arlo for forecastin* Ais2 #ana*ement !(tainin* a istri(ution for returns 6unin* &ension funs M ho+ critical is iscount rate to funin* +ith other statistical an financial issues ? Outlie !ee" Topic #ea$i%s 1&' Itro$uctio to statemets a$ ot(er )iacial reporti% topics Data t*pes #eporti% irre%ularities +,S C(. - 1& ' C,+ -1 . ,iacial aal*sis & t(e /asics 0e* metrics Competitor a$ I$ustr* Data +,S -.&1 C,+ -' 1&2 Icome Statemet ,orecasti% #e3eues 4iear #e%ressio& Si%le 3s. Multiple Varia5le Mo$els E6cel e6amples 7ui8 1 +,S - 1 C,+ - . 2 Pro9ect 1 $ue at e$ o) material !ritte #eport -1 (:roup) Ca3as Drop5o6 a$ Pritout ; Mi$term E6am I Computer 4a5 ;&< /alace S(eet No&liear #e%ressio Dumm* Varia5les +,S - 5 C,+ - 1&5 !ee" < Pro9ect ' $ue at e$ o) material !ritte #eport -' (:roup) Ca3as Drop5o6 a$ Pritout 10&1' Cas( ,lo= +al*sis Multi3ariate Mo$els> Cot?$ Seasoalit* Sesiti3it* +al*sis @ Mote Carlo Simulatio +,S - 2 C,+ -2 1' Pro9ect ' $ue at e$ o) material !ritte #eport -. (:roup) Ca3as Drop5o6 a$ Pritout 1. Compa* +al*sis& Presetatios Oral #eport =it( Visual Presetatios (Po=erPoit or Pre8i) Ca3as Drop5o6 a$ Pritout ,ial E6am !ee" @ Tue. Dec. 10 ,ial !ritte #eport DueA Complete a$ Bp$ate$ Iclu$e all up$ates )rom commets !ritte #eport (:roup) Ca3as Drop5o6 a$ Pritout 9