AGRICULTURAL ECONOMICS 431 - Texas A&M University



January 19, 2010

AGEC 489/689 Course Schedule

Spring 2010 Semester

Week 1:

Tuesday, January 19th Introduction to course and course requirements.

Review of course syllabus.

Role of presentations.

Scope of agribusiness finance.

Part 1: Managerial Accounting Fundamentals

Thursday, January 21st Slide Show #1: Structure of food and fiber system.

What is managerial accounting?

Slide show #2: Basic structure of key financial statements and

financial statement linkages.

Assign Homework #1

Week 2:

Tuesday, January 26th Collect and discuss Homework #1.

Slide Show #3: Measurement, interpretation and application of key financial indicators.

Slide Show #4: Financial indicators, historical and comparative analysis.

Slide Show #5: Indicators of success versus failure.

Thursday, January 28th Demo previous borrower and lender presentations.

Slide Show #6: Enterprise budgets and the Master budget.

Slide Show #7: Cost accounting concepts.

Part 2: Economic Growth Concepts

Week 3:

Tuesday, February 2nd Demo a few more presentations from last semester.

Slide Show #8: The DuPont model for profit analysis.

Slide Show #9: Emphasis on the following:

Optimal current product and input combinations.

Concept of the firm’s long run expansion path.

Long run planning curve and size economies.

Price under perfect and imperfect competition.

Slide Show #10: Economic growth model.

Internal and external constraints to growth.

Application of leverage.

Assign Homework #2

Thursday, February 4th Collect and discuss Homework #2

Slide Show #11: Time value of money.

Present value of future cash flows.

Choice of discount rate.

Application of loan amortization.

Slide Show #12: Capital budgeting methods

Payback period method.

Net present value method.

Internal rate of return method.

Assign Homework #3

Week 4:

Tuesday, February 9th No class

Part 3: Valuing Investment Opportunities

Thursday, February 11th Collect and discuss Homework #3

Slide Show #12 continued:

Economic and service lives

Terminal values

Purchase of depreciable assets

Purchase of real estate and maximum bid price

Slide Show #13: Capital budgeting data requirements

Measuring future net cash flows

Alternative forecasting approaches

Concept of derived demand and machinery sales

Forecasting corn market equilibrium

Week 5:

Tuesday, February 16th Finalize team rosters

Summarize key elements of previous slide shows

Review for 1st hour exam

Thursday, February 18th 1st Hour exam

Week 6:

Tuesday, February 23rd Pass back and discuss graded 1st Hour Exams

Slide Show #14: Cost of capital

Explicit and implicit costs of capital

Weighted average cost of capital

Optimal capital structure

Thursday, February 25th Slide Show #15: Accounting for risk

Concept of business risk and risk/return preferences

Concept of financial risk

Portfolio effect

Ranking investment opportunities

Assign Homework #4

Week 7:

Tuesday, March 2nd Collect and discuss Homework #4

Discuss input form for class model

Discuss presentation requirements

In class time for team meetings

Thursday, March 4th Guest speaker: to be announced

Week 8:

Tuesday, March 9th Summarize key elements from previous slide shows

Review for 2nd hour exam

Thursday, March 11th 2nd hour exam

Week 9:

Tuesday, March 16th Spring break

Thursday, March 18th Spring break

Week 10:

Tuesday, March 23rd Pass back graded 2nd hour exams

Slide Show #16: Financial markets and financial intermediation

Slide Show #16: Agricultural lending industry

Financial regulation of agricultural lending institutions

Part 4: Financial Markets and Sources of Capital

Thursday, March 25th Slide Show #17: Loan application analysis

Credit scoring

Role of credit bureaus

Component of credit scorecard

Computerization of lending decisions

Week 11:

Tuesday, March 30th Guest speaker: to be announced

Thursday, April 1st Slide Show #18: Portfolio analysis

Stress testing portfolio segments

Portfolio manager and the credit officer

Information supplied by borrowing team to lending team

Demo more team presentations from previous semesters

Summary of lending perspective in this course

Team presentation overview

Part 5: Team Presentations

Week 12:

Tuesday, April 6th Borrower and Lender Teams (#1 and #7)

Thursday, April 8th Borrower and Lender Teams (#2 and #8)

Week 13:

Tuesday, April 13th Borrower and Lender Teams (#3 and #9)

Thursday, April 15th Borrower and Lender Teams (#4 and #10)

Week 14:

Tuesday, April 20th Borrower and Lender Teams (#5 and #11)

Thursday, April 22nd Borrower and Lender Teams (#6 and #12)

Week 15:

Tuesday, April 27th 3rd hour exam

Team executive summaries due at start of class

Thursday, April 29th Pass back graded 3rd hour exams and team grades

Briefly discuss optional final examination

Week 16:

Tuesday, May 4th Redefined day; no class

Thursday, May 6th Reading day; no class

Graduate student term papers due in my office by 5pm.

Check Howdy after 5pm today to see your grade for this exam as well as the presentation scores and final letter grade for the course should you choose not to take the optional final. A grade calculator will be posted on the website which can tell you the score you would need on the optional final exam to change your letter grade.

May 12th Optional Final Exam; 8-10 am

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