Financial Analysis Syllabus



Financial Analysis

95-711

Fall 2002

|Class Hours: |Monday |

| |2:00 PM to 4:50 PM |

| |Doherty Hall A317 |

| |Wednesday |

| |5:30 PM to 8:40 PM |

| |BH A53 |

| |Thursday |

| |2:00 PM to 4:50 PM |

| |HBH 1002 |

|Office Hours: |After class |

| |By appointment |

|Instructor: |Lynne Pastor |

| |Email: lp23@andrew.cmu.edu |

| |Phone 412 421 6906 (10 am to 9 pm) |

|Teaching Assistants |Deepa Mani |

|TA Hours |Email: dmani@andrew.cmu.edu |

| |Wednesday from 2 to 5 pm |

| |HBH 3rd floor Lounge |

| | |

| |Yunfeng Shi |

| |Email: yungfens@andrew.cmu.edu |

| |Saturday 2 to 6 pm |

| |Room 1504 Hamburg Hall (on the same floor and at the opposite side of the Classroom). |

| | |

|Course Information | |

Prerequisites and Requirements

The course is heavily dependent on technology not only for analytical purposes but also for communication. You will be turning in weekly group assignments which will require you to use the Internet to access data, enter it into Excel spreadsheets and provide in a formal in MSWord. You are expected to have a reasonable level of competency in use of these programs.

You are also expected to check your Email and the announcements on the course website each day for messages from your teaching assistant or me. In addition, you should be aware that the information in the website is subject to change and you are responsible for any changes made to the schedule or assignments.

I also check my Email frequently (unless out of town) so this is likely to be the best method to stay in touch with me. If you should not receive a response from me within 24 hours, I may be out of town so please check with the teaching assistants.

Course Description

 

Purpose

This course focuses as much as possible on the practical application of financial analysis. The purpose of this course is to teach students the key analytical skills involved in reading and interpreting the financial position of a firm using financial statements, knowledge of the industry and information about the marketplace to make better business decisions.

 

Format

This class will use a combination of readings, exercises, case analysis and stock portfolio management project. Case studies will be used to practice the skills covered in lecture. The class involves a combination of individual and group work, with participation in both aspects of the course being equally important.

Class Session

Each week you are expected to have checked the course website and downloaded the lecture notes. Supplemental readings on the web may also be assigned. Class time will be use to discuss topics in the lecture notes, case analysis and progress on your investment portfolios.

Several individuals from the local business community have been invited to help us understand key issues covered in the course. We may have to reschedule some sessions in order to accommodate their schedules. I will send you information on the speaker in advance. Please be prepared to give the speaker your most gracious attention and appreciation and also demonstrate your interest in their experience by having a few pertinent questions to ask them.

Decorum

Appropriate business conduct is expected in class. You are expected to be in class at the beginning of the session and remain until the end of the session unless you have previously discussed the reason with me.

Cell phones should be turned off prior to coming to class and I reserve the right to confiscate any ringing cell phones and you may be subject to loss of attendance and participation points.

Individual discussions should be limited to those directed to the entire class and relevant to the topic at hand.

This is not a lunch/dinner meeting. While coffee and sodas are fine, please do not bring your lunch or dinner to class, the odor and activity of eating is disruptive and distracting.

Do not sleep in class. This should be obvious. Again you will be asked to leave rather than disrupt the class.

Text

The optional text for this class is Analysis for Financial Management by Higgins.

Evaluation

You will be evaluated on an individual basis through quizzes and the final exam as well as attendance and participation. You will also be evaluated by your peers in any group assignments.

Point Assignments

|3 Scheduled Quizzes | 375 |

|5 Case Analysis |300 |

|Investment Project (see portfolio instructions) |300 |

|Attendance & Participation |25 |

| | 1,000 |

Grading Scheme

You must complete all the assignments and requirements of this course to pass.

This course is not “curved” in the traditional sense however you will be evaluated to a certain extent by comparison to the performance of others in the course and the grading will adhere to the school policy that the class average will not exceed 90% which is equivalent to an A-.

Note that regardless of total points, no more than 10% of the class will receive A+ as a final grade. I expect that you all will complete each assignment competently and as instructed resulting in a grade of 87% to 90%. Only exceptional effort will earn a grade above 90%.

|97thru 100% (up to 10% of the class) |A+ |Exceptional |

|93 up to 97% |A |Excellent |

|90 up to 93% |A- |Very Good |

|87 up to 90% |B+ |Average |

|83 up to 87% |B |Fair |

|80 up to 83% |B- |Marginal |

|77 up to 80% |C+ |Poor |

|73 up to 77% |C |Very Poor |

|70 up to 73% |C- |Minimal Pass |

|below 70% |R |Fail |

Quizzes

The questions on the quizzes will evaluate the student's ability to identify the critical issues, analyze the data provided and draw an appropriate conclusion. Quiz format will primarily be short answer objective – emphasis on “short”. Although you should be thorough, you should also be concise. Your responses will not be searched in hopes of finding the correct answer buried there. Note that if you include extraneous and incorrect information in your answers you will lose points. Quizzes may contain versions of questions from the previous quiz and knowledge of prior material may be necessary to answer some questions.

You should bring a calculator, and may bring one sheet of handwritten notes. You may not use a PDA or computer files during the quiz. Neatness counts, if the answer is not legible it’s not possible to give you credit.

Case Analysis

Choose a public company on which to base your case analysis. Please see the attached list for companies that were used in the earlier term and therefore cannot be used this semester. I must approve your choice of companies and no more than two students may choose the same company. Note that the cases are an individual effort even if two of you choose the same company - you must do your own analysis. I suggest you choose a company that you may someday like to work for or invest in. The sooner you choose a company the better since your first case analysis is due at the beginning of the second class session.

Five times during the semester, you will be given a series of questions to answer about your chosen company. You will be required to provide appropriate attribution of sources and whenever possible and copies of the documents you used to derive information for your answer in an appendix to your report. This may mean copying and pasting the raw data into a word document.

The analysis must be submitted by the beginning of class – do not blow off class to do the write up as it will be considered late. Late assignments are not accepted and you will receive a zero.

Investment Game Project

The goal of this project is to gain experience with financial analysis via the stock market. This is a group assignment with emphasis on “group”. You should plan to meet at least once a week and assign the write up and submission to one of the group.

Each member of the group will also turn in a “Peer Eval” which will impact your individual grade on the project. You will loose points if you fail to turn in your “Peer Eval”.

In the first session of class you will form investment groups of 4 students. Your objective is to maximize the value of your portfolio over the investment horizon (most of the semester).

You must revalue your portfolio at the close of the market once a week the day before your class meeting. Five times during the semester you will summarize the activity in your portfolio, explain the reasoning behind your trading decision referencing the material we have covered in the last classes and chart your portfolio’s performance on a weekly basis. You should submit this document prior to the beginning of class as scheduled.

At the end of the term you will submit a 10 page paper on the performance of your portfolio (see portfolio instructions for more information).

Group Participation

Business is almost always conducted in teams. You should note that a significant portion of your grade is dependent on your group project. You will turn in a “Peer Eval” with each group assignment and your individual grade will be adjusted up or down accordingly. Peer evaluations are designed mainly to highlight any problems your team may be having so we can address them together before the project and the semester have progressed too far.

Keep in mind that your group has the option to “fire” you from the group if problems persist. In this event you will be required to complete all the Stock Portfolio Project on your own and 100 points will be deducted from your overall grade at the end of the term.

Attendance and Participation

Your career success depends critically on your skill in articulating and defending your ideas and engaging in a productive dialogue with your colleagues.

Simply attending class is not enough. In order to make a contribution, you will need to be well prepared for class. Please be aware that you are responsible for your own level of participation: your ability to respond to questions as well as the quality of the contributions to the discussion you volunteer will be reflected in your grade. The class encourages questions and debate, and thus respect for other students’ views and cultural perspectives is essential. You should assume 0 points in the grading scheme for Attendance and Participation unless you have made a serious effort to contribute in class.

Late Assignments and Make-ups

In short there are none. No assignments will be accepted for credit after the beginning of the class in which they are due.

You are not permitted to switch sections to delay taking a quiz or turning in an assignment. If you need to switch lecture sections, your assignments are still due in your regular class period.

There are only 3 quizzes/exams in this course so plan accordingly. I am reluctant to give make ups for any reason unless evidence of an emergency is provided. I have scheduled quizzes well in advance so that you can manage your schedule. While I appreciate that site visits and interviews are important, they are not considered emergencies.

Academic Integrity

Students should review CMU’s Academic Integrity Guidelines at . I have a very low threshold of tolerance for dishonesty. If you are caught plagiarizing or cheating in any way you run the risk of failing the course.

Companies not Eligible for Analysis Fall 2002

Accenture

Adobe

AMS

Apple(aapl)

Applied Materials (AMAT).

banana republic

Borland

Business Objects

Cerner

Checkpoint Software

Coca Cola

Colegate Palmolive

Computer Associates

Doubleclick

EDS

E-Piphany

Exxon Mobile

Freemarkets

Gateway

GE

Heinz

Home Depot

Interwoven

Intuit

Johnson & Johnson

Lockheed Martin

LSI Logistics

Lucent

MacroMedia

Marriott

Mercury Interactive

MRO

NOKIA

Nortel

Nvidia

Palm

Pixar

Playboy

Qualcomm

ROSS Systems Inc

SBC Communications

SouthWest Airline

Sybase

Symmantec

Target

Unisys

UPS

Veritas

Vitria

Wendy's

Xerox

Yahoo

Schedule

The Schedule can be found on the course website’s splash page.

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