Cohort MBA Fall 2004

AIM 6201: Financial Accounting, Course Outline

University of Texas at Dallas, School of Management
Cohort MBA Program, Fall 2005
AIM 6201: Financial Accounting

I. Administration
Instructor: Suresh Radhakrishnan (Suresh)
Office: SOM 4.426; Phone: 972-883-4438; Fax: 972-883-6811; E-mail: sradhakr@utdallas.edu
Office hours: Thursdays 4:00 PM to 5:00 PM or by appointment

II. Course Objective

Accounting reports are an important means of communication with investors and a basis
for writing contracts both within and outside the firm. This course is designed to provide
an understanding of what these reports contain, what assumptions and concepts
accountants use to prepare them, and why they use those assumptions and concepts. The
course will provide a disciplined way of thinking about and managing a business and
reporting its financial status and performance. It will provide basic institutional setting
and discuss some of the controversial accounting issues.

We will use simple examples to illustrate the basic concepts. We will stress the
application of the basic concepts to real world cases. For this purpose, we will use the
financial reports of U. S. Corporations and articles from newspapers and business
journals to critically examine the accounting concepts and practices.

III. Course Materials

Ø Required Text: Financial Accounting: A Business Process Approach, Jane L. Reimers, 1st
edition, Prentice Hall.
Ø Reference Self Study Material: Financial Accounting Tutor, by D. Gode and R. Gode,
Wiley.
Ø Solutions Manual for the Reimers text will be posted on WebCt.

IV. What to expect in class and what we expect of you

Accounting is the language of business. As with learning any new language, you will
need to practice the language at two levels. First, you will need practice with the basic
grammar, which is the mechanics and concepts of accounting /mechanics. Second, you
will need practice with interpreting and understanding the language, as it is used in the
real world.

To help you with the first level, we will introduce the concepts and mechanics in-class
with simple examples. We will also be going over some select problems, so that you
become comfortable with the mechanics of accounting. From time to time, depending on
the need I may convert some of the class session into tutorials where a teaching facilitator
would take you through some of the practice problems.

To help you with the second level, I have designed the project where you perform a ratio
analysis.

Professor Suresh Radhakrishnan 1

Cohort MBA Fall 2004
AIM 6201: Financial Accounting, Course Outline
You will be responsible for going over the relevant chapters and do the practice
problems. I will make the solutions to the practice problems and some additional
problems also made available to you. I strongly urge you to go over the materials before
class. This will help you grasp the important aspects and internalize them when we go
over them in class. It will be your responsibility to let us know if you are having
difficulties with the materials. I will attempt to help each and every one of you.

I will use a mix of lecture and discussion modes. You are strongly urged to participate in
the class discussions. Please feel free to share any report or article that you may read in
the popular press about the language. In fact, I strongly urge you to read the business
section of the New York Times and/or the Wall Street Journal.

Overall, let us try to help each other make it a nice experience.

V. Course Evaluation
There are four parts to the evaluation.
1. Three Quizzes (Individual): The Quizzes are designed to test your
understanding of the basic accounting concepts. All quizzes will be
cumulative. Each quiz will contain about 60% to 75% of the questions taken
directly from the text material, the practice problems and the problems we go
over in class. The rest will be some challenge problem/questions, which will
be based upon the materials that we cover. All quizzes will be closed book
and closed notes. No make-up quizzes will be given. I will consider the two
best scores for the final evaluation.
2. Annual report project (Group): Each group will select one company of their
choice/interest and obtain their three or four recent annual reports. You will
need to perform a ratio analysis and provide a brief prognosis of their beliefs
on the firm’s future performance. I strongly recommend that you choose and
obtain the annual reports of the firms for the project as early as possible.
3. Group peer evaluation: Each group member will evaluate the other group
members. A peer evaluation form is provided at the end of this handout.
You are expected to work in your assigned group. Only one copy of the
solution per group needs to be turned in. At the end of the course you will be
asked to evaluate the contribution of each of the individuals in the group.

The grades will be based on relative performance. The weights for evaluation are:
Quiz [worst 10%, other two 25% each] 60%
Annual report project (group) 20%
Peer evaluation - Individual contribution to the group 20%

The target grade distribution is

A 40%
B 40%
C or lower 20%

Professor Suresh Radhakrishnan 2

 Cohort MBA Fall 2005
AIM6201: Financial Accounting

Tentative Course Outline

S# Date (2004) Time Topic Practice Problems Class problems
Pre- 8/15, 8/16 & 1:30PM to Ø Introduction, Basic concepts, Mechanics of Accounting • P3-7B • P3-7A
term 8/17 5:30PM (Chapters 1, 2, 3 & 4 of Reimers) • Exercises in notes
1, 2 8/23, 8/25 9:00AM to Ø Purchase and Use of Assets (Chapter 5) • P5-1B, P5-2B, • P5-1A, P5-9A, P5-8A, P5-
11:00AM Ø Inventory and Liabilities (Chapter 6) P5-8B, P5-10B 10A
• P6-6A, E6-14, • P6-6A, P6-13A, E6-15
P6-6B, P6-7B • Exercises in notes
3 8/30 9:00AM to Ø Quiz I : Chapters 1 through 4 (Lead camp portions)
11:00AM
4, 5 9/1, 9/6 9:00AM to Ø Acquisition and Payment: Inventory and Liabilities • E7-8, E7-11, E7- • E7-7, E7-15, P7-6A
11:00AM (Chapter 6) 13, P7-6B
Ø Sales and Collections (Chapter 7)
6, 7 9/8, 9/13 9:00AM to Ø Debt (Chapter 8) • P8-4B, P8-8B, • P8-4A, P8-8A, P8-5A
11:00AM P8-5B
8 9/15 9:00AM to Ø Equity capital (Chapter 9) • P9-1B, P9-5B • E9-5, P9-1A, P9-5A
11:00AM
9 9/20 9:00AM to Ø Quiz II: Chapters 1 through 9
11:00AM
10 to 9/22, 9/27, 9:00AM to Ø Statement of cash flows (Chapter 10) • P10-1B, P10-8B • P10-1A, P10-8A
13 9/29, 10/4 11:00AM Ø Financial Statement Analysis (Chapter 11) • P11-4A, P11-4B
14 10/6 9:00AM to Ø Quiz III: Chapters 1 through 11
11:00AM
10/13 12 Noon Ø Project and Peer Evaluations Due

Professor Suresh Radhakrishnan 3

Cohort MBA Fall 2005
AIM6201: Financial Accounting

Final Project (Group)

Financial Stateme nt Analysis
Objective: The objective of this project is to apply the ratio analysis framework to U. S.
companies, so as to give you a hands-on experience about the difficulties and limitations of the
technique.
Suggested Approach:
Ø Choose one U. S. firm that is traded in the stock market. The companies that you choose could
be (a) ones that you had worked for or (b) ones that you want to work for.
Ø Obtain at least the three or four most recent annual reports for the firm. That is, at least have
four years of income statement data and four years of balance sheet data for the firm.
Ø Perform a ratio analysis to provide you with a better feel for the economic environment
Ø Collect information from the press releases, news reports and the MD&A
Ø Provide logical inference on whether the firm is going in the direction in which the press
releases indicate.
Ø Given the future expectations, how would you expect to be the trend of the ratios to be in the
future.
Source:
Ø Annual reports: You may find the SEC’s database of company filings useful [the internet site is
http://www.freeedgar.com/. Use 10-Ks (the annual reports) for a company. You may order the
annual report from the company directly, or find copies of the annual report on the company’s
home page. Please do not go to databases such as the COMPUSTAT, VALUELINE etc., to get
this data, because adjustments are already made to some items.
Ø For press releases you may go to the company’s homepage or Lexis-Nexis at the UTD library.
Note that the above is a list of suggested sources. You will need to show some enterprise in
obtaining data. Please document the source and provide a copy of the annual report (the relevant
sections and footnotes) in the appendix with the final report.
Write-up: The main report should be not more than 5 pages not including the appendix
[typewritten, 1.5 or double -spaced]. Please put the details of the computations and the data in the
appendix. Please don’t send me excel spread sheets by email as part of the report. I want only hard
copies of everythin g, similar to a professional consultant’s report.
Clarity of final report will be rewarded.
DUE DATE: The report is due on or before 10/13 in my room SM4.426 or my mail box.

Professor Suresh Radhakrishnan 5

Cohort MBA Fall 2005
AIM6201: Financial Accounting

Evaluation of Individual Contribution to Group

NAME OF EVALUATOR:

NOTE: Please do not evaluate yourself !

Dimensions of evaluation
A. Distribution of work
B. Helpful in explaining difficult topics
C. Helpful with ideas, questions and discussion
D. Quality and timeliness of work performance
E. Leadership and overall collegiality

A B C D E Total
NAME OF GROUP MEMBER (0-4) (0-4) (0-4) (0-4) (0-4) (0-20)

Each dimension is to be evaluated on a scale of 0-4 with 0 the minimum and 4 the maximum. For
example, if you perceive that you did more work, and the rest was distributed evenly across other
group members, you might want to give a 2 to all the group members.

Professor Suresh Radhakrishnan 6