University of Southern California



Faculty: James (Jim) Leonetti, CPA (inactive)

Office location: ACC 232 D

Office Hours: 9:45 am - 11:15 am Tuesday and Thursday or by appointment

Email: Leonetti@usc.edu or Leonetti@marshall.usc.edu

Course Duration: Tuesday January 8, 2019 to Thursday February 28, 2019

Units 2.0

Course Description

This course is focused on increasing the student’s understanding over how to utilize and effectively analyze the information from financial statements and financial reporting for the purpose of conducting professional financial analysis. An important objective of this course is to provide the student with practical tools and understanding to successful perform financial statement analysis as a professional analyst.

Prerequisites

As stated on USC’s Schedule of classes, this course requires an introductory level knowledge of finance (Foundations of Business Finance BUAD 215 or Business Finance BUAD 306); and knowledge of financial accounting: External Financial Reporting Issues ACCT 370 or Intermediate Accounting for Non-Accounting Majors ACCT 415)

Course Objectives

We will explore how to use financial statement information to evaluate a firm’s past performance, and how to use additional information, such as footnote disclosures, earnings releases, analyst calls, annual report to shareholders and the reporting to the SEC to better understand and analyze financial statement information.

Upon completion of the course, students should have learned the following skills:

1. The skills that will enable you to present financial analysis in a succinct and effective manner

2. The ability to understand and compute the most commonly used ratios and use of them in analysis.

3. Locate where critical data may be found in publicly distributed materials of a Company.

4. Understand Non-GAAP measures and ratios and why these are sometimes preferred over GAAP measures.

5. Have the ability to dissect the Statement of Cash Flows and understand cash metrics

6. Understand the elements of core earnings and be capable to detect one-time items and special items.

7. Demonstrate leadership and team skills.

Course Materials

Textbook Financial Reporting and Analysis. ACCT 416

➢ McGraw-Hill Create

➢ Copyright 2018 McGraw-Hill Education

➢ ISBN # 9781307365122

Additional course materials will be posted onto Blackboard, including:

• Articles of various authors posted on BlackBoard

• Video Material Posted on Blackboard

• Instructor provided materials, including slides of lecture materials

Any material posted on Blackboard is eligible to be included on any examination, even if not discussed in class.

✓ If you have any questions or need assistance with the Blackboard Course Pages, please contact the Marshall HelpDesk at 213-740-3000 or HelpDesk@marshall.usc.edu.

✓ Access to a computer that will enable you to access BlackBoard is important.

✓ Having a financial calculator that does not have wifi or internet capabilities will be useful on exams

TEACHING & LEARNING ACTIVITIES

This course is only a half semester which means we will be moving through material very quickly. This course will focus on providing you with a very practical and “Real Life” experience of how to better understand and use financial reporting to be able to make the best possible analysis. We will use the study of public companies to provide a “ hands on” experience. This course is not focused on technical accounting; rather it is focused on how to use the financial reports prepared by companies, analysist and others. In other words, knowing accounting rules is very helpful, but if you do not have a strong accounting background you can still be very good at financial statement analysis and very successful in this course. However, because of the speed of this course, it is very important that each student completes the assigned reading prior to the class

Grading Standards

I intend to adhere to the USC Leventhal School of Accounting Historically, undergraduate electives at the Leventhal l School have had an average GPA of around a B+ ( 3.3) , but may vary based on class performance.

While, it is my general expectation that the grades for this class will be earned based upon achieving the approximate percentages of the total scaled points listed below, final grades may be adjusted based upon the overall performance of the class so that the overall class average falls between 3.3 – 3.5 grade points:

• Grade of an A to an A- earned for achieving between 100%-92% of the scaled points awarded.

• Grade of a B+ to a B- earned for achieving between 91%-79% of the scaled points awarded

• Grade of a C+ to a C- earned for achieving between 78%- 67% of the scaled points awarded

• Grade of a D+ to a D- earned for achieving between 66%-54% of the scaled points awarded

• Grade of an F for achieving less than 53% of the scaled points awarded.

Grading elements

The breakdown of the graded elements for this course is listed below:

Possible Percent

Points of Total Points

Class participation and professionalism 100 10%

Cash Flow Exam 200 20%

Midterm exam 275 27.5%

Team Projects and Assignments 125 12.5%

Final exam 300 30%

Total 1,000 100%

Additional work credit, make up work and extra credit points are generally not available.

The grade of “W” is allowed only if a student withdraws after the official add period and before the end of the drop period during the semester. The grade of incomplete (IN) can be assigned only if there is work not completed because of a documented illness or unforeseen emergency occurring after the drop period of the semester that prevents the student from completing the semester. An “emergency” is defined as a serious documented illness, or an unforeseen situation that is beyond the student’s control, that prevents a student from completing the semester. Prior to the end of the drop period, the student still has the option of dropping the class so incompletes will not be considered. Arrangements for completing an IN must be initiated by the student and agreed to by the instructor prior to the final examination. All work required to replace the IN with a final grade must be completed within one calendar year from the date the IN was assigned. If the student does not complete the work within the year, the IN will automatically be converted to a grade of F.

A more detailed description of the various graded elements of this class is listed below.

Class Participation and Professionalism total points to be earned 100 or 10% of total.

Class participation and professionalism are important in this course and students can earn up to 50 points for participation. Class participation will be graded based on active, constructive, and positive participation. The instructor may randomly call upon any student in order to observe the preparation of the student and/or to spur discussion and broad participation amongst all members of the class. Students who demonstrate active, positive and constructive participation and/or the ability to respond to random questions may earn the maximum points for participation.

Professionalism is worth 50 points and will be graded based upon students’ demeanor during class. It is expected that students will be respectful and courteous to others. Any student who does not exhibit courtesy or respect may lose points for that class. Furthermore, disruptive and/or negative behaviors will result in point reductions. Attendance will be taken each class. If a student cannot attend a class and they must notify me ( via email) AT LEAST 30 MINUTES prior to the start of class, to be eligible to earn points for his/her professionalism. (Taking the time to notify of an absence in advance of class is professional behavior). Not attending class without notifying the professor of the absence is in the same category of behavior of not attending work without notifying a manager. If an emergency situation or illness arises, take care of yourself and/or your loved one and notify the instructor as soon as practicable.

Students who enroll after the course has started and did not participate in classes prior to enrollment may be given make up work and/or have the opportunity to earn points that they did not earn by not attending those classes prior to their enrollment. However, the students affected must approach me within one week after enrolling in the course to be eligible for make- up points. Requests for make-up work after the initial one week period will not be considered.

Cash Flow Examination 200 points or 20% of the total.

The Cash Flow Examination is an examination focused on the preparation and analysis on the Statement of Cash Flows, cash flow from operations, free cash flows and cash metrics. The exam may include multiple choice, problem solving, and logic questions. This exam will be held on Thursday February 21, 2019 in our regular classroom. This exam is to be completed individually. There are no scheduled make-up exams or alternative dates of locations to take this exam. Collaboration with anyone else on the Cash Flow Examination is strictly prohibited.

Students may bring their textbook as well as paper versions of notes, lecture and other class materials during the exam. Students are advised to print any materials they wish to refer to during the exam. Laptop computers are not permitted to be turned on during the exam. Additionally, any electronic device with internet, WIFI or Blue tooth capability (E- Devices”)is not permitted to be used during any examination. All E-Devices must be unavailable to students and must be turned to the OFF mode. Calculators that do not have with internet capabilities, WIFI or Blue tooth capability may be permitted, if specifically stated by the professor on the date of the exam.

The exam may include the preparation of a statement of cash flow, the calculation of free cash flow, cash flow ratios and other cash analysis problems. There are no scheduled make-up exams for this exam. If you have a known schedule conflict for this exam, please discuss it with me immediately. Additionally, if an illness or unforeseen emergency arises, you must contact me as soon as possible so that we can discuss.

The scoring on the cash flow exam may be curved so that the average points earned by the entire class are not less than 3.3 grading point equivalent on any one exam.

The Cash Flow examination will be returned to students on February 26, 2019 and the test answers will be made available to students who took the exam. If a student believes that a question was incorrectly graded, the student must notify me on or before February 28, 2019. All exams will be final after such time.

Mid-term Examination 275 points or 27.5% of the total.

The Midterm exam will be held on February 5, 2019 in our regular classroom. This exam is to be completed individually. Collaboration with anyone else is strictly prohibited.

Students may bring their textbook as well as paper versions of notes, lecture and other class materials during the exam. Students are advised to print any materials they wish to refer to during the exam. Laptop computers are not permitted to be turned on during the exam. Additionally, any electronic device with internet, WIFI or Blue tooth capability (E- Devices”) is not permitted to be used during any examination. All E-Devices must be unavailable to students and must be turned to the OFF mode. Calculators that do not have with internet, WIFI or Blue tooth capability may permitted, if specifically stated by the professor on the date of the exam.

The exam may include multiple choice, problem solving, and logic questions. The exam may include materials covered in class lectures, assigned in required readings, and also from discussions presented during the weekly team case assignments. There are no scheduled make-up exams for the midterm. If you have a known schedule conflict for this exam, please discuss it with me immediately. Additionally, if an illness or unforeseen emergency arises, you must contact me as soon as possible so that we can discuss.

The scoring on the Midterm exam may be curved so that the average points earned by the entire class are not less than 3.3 grading point equivalent on any one exam.

The Midterm examination will be returned to students on February 7, 2019 and the test answers will be made available to students who took the exam on its scheduled date. If a student believes that a question was incorrectly graded, the student must notify me on or before February 12, 2019. All exams will be final after such time.

Team Projects and Assignments 125 points or 12.5% of the total

On the first day of class, teams will be formed and each team will select a publicly traded company from a list that will be provided to them. This company will be that team’s Selected Company for the entire semester. Teams will generally consist of 5-6 members. Students will form their own teams. Everyone will be assigned to a team and if a student is having difficulty in finding a team, then I will ensure that they are joined to a team.

Each team will perform various Team Projects and Assignments through-out the semester using information on their Selected Company. The due date for each of the Team Projects and Assignments is listed in the course calendar and the instruction for each Team Project and Assignment is detailed on Exhibit B . The team assignments consist of 5 written presentations and Teams should be prepared to present assignment #5 in class on February 19.

An important learning objective is for students to work successfully in a team environment. In the event that interpersonal challenges among team members arise, it is the hope that the individuals involved within their respective teams will be able to resolve their differences amongst themselves. In the unfortunate situation where, a student desires to separate from their team or if a team desires to remove a team member, they will need to follow the procedure for doing so outlined in Exhibit A.

The team written assignments are to be performed collectively by members of the team, as each team determines in their discretion. It is expected that each team member will fully participate in the team activities and assignments. All team members will receive the identical number of points for all team assignments. There are 125 points available for all Team written projects. Project #1 is worth 5 points and projects 2-5 are worth 30 points each. It is important to put the names of each Team Member and the number of the Team on each Team Assignment. Failure to clearly denote the team number and the names of each team member on each Team Assignment will result in a loss of points for that particular assignment.

Team written presentations will be graded on professionalism, neatness, thoughtfulness, consistency and completeness with instructions, and effectiveness of underlying rationale. The Team Written Presentations are due prior to the beginning of class and a hard copy should be turned in to me. Team Written Presentations are to be prepared in advance, outside of class time. Presentations that are turned in after the start of the class when they are due, will not be accepted and no points will be earned by the team or any members of the team for that assignment.

Each team may be asked to either make a brief oral presentation to the class and/or to actively participate in the questioning/ evaluation/ presentation of another team’s presentation for presentation #5. Oral presentations must never exceed the time allotted(which will be provided at the beginning of class). Points will be deducted for exceeding the time allotted or the presentation may be cut short by the professor. Oral presentations should include visual materials to assist the audience in following the oral presentation.

Final Examination 300 points or 30% of the total

The Final Examination is comprehensive and cumulative. The exam may include multiple choice, problem solving, and logic questions. This exam will be held on February 28, 2019. beginning at our regular class time and in our regular classroom. This exam is to be completed individually. Collaboration with anyone else is strictly prohibited.

There are no scheduled make-up exams for this exam. If you have a known schedule conflict for this exam, please discuss it with me immediately. Additionally, if an illness or unforeseen emergency arises, you must contact me as soon as possible so that we can discuss.

Students may bring their textbook as well as paper versions of notes, lecture and other class materials during the exam. Students are advised to print any materials they wish to refer to during the exam. Laptop computers are not permitted to be turned on during the exam. Additionally, any electronic device with internet, WIFI or Blue tooth capability (E- Devices”) is not permitted to be used during any examination. All E-Devices must be unavailable to students and must be turned to the OFF mode. Calculators that do not have with internet, WIFI or Blue tooth capability may permitted, if specifically allowed by the professor on the date of the exam.

The scoring on the Final exam may be curved so that the average points earned by the entire class are not less than 3.3 grading point equivalent on any one exam.

All final exam results are final after the score is posted.

Individual homework assignments (will not be graded and are not part of total points earned).

There will be a number of individual homework assignments throughout the semester that are suggested that each student complete. These assignments are voluntary and will not be graded. However, the answers for the homework will be posted on Blackboard. The purpose of these assignments is to help the students to focus on key concepts and to self –test their individual learning of these concepts. I will make myself available to help any student who desires help with homework assignments.

The homework assignments are listed in the course calendar, which is part of this syllabus. The homework will be found by reference to questions, exercises and problems at the end of each chapter in the text book, Or, in some cases, it will be Professor provided problems on Blackboard (BB).

MARSHALL GUIDELINES

Learning Goals

In this class, emphasis will be placed on the USC Marshall School of Business learning goals as follows:

|Goal |Description |Course Emphasis |

|1 |Our graduates will have an understanding of the key business areas and their interplay to effectively |High/ Medium |

| |manage different types of modern enterprise. | |

|2 |Our graduates will have a global mindset demonstrating an understanding of the interplay of local, |Medium / Low |

| |regional, and international markets, and economic, social and cultural issues. | |

|3 |Our graduates will demonstrate critical thinking skills, decision-making, and problem-solving abilities |High |

| |to strategically navigate complex demands of business environments. | |

|4 |Our graduates will demonstrate leadership skills aspiring to be informed, sensible, future-oriented |Low |

| |leaders and innovators. | |

|5 |Our graduates will demonstrate ethical reasoning skills, understand social, civic, and professional |Low |

| |responsibilities and aspire to add value to society. | |

|6 |Our graduates will be effective communicators in speaking and writing to facilitate information flow in |Medium/ Low |

| |organizational, social, and intercultural contexts. | |

Add / Drop Process

Most Marshall classes are open enrollment (R-clearance) through the Add deadline. If there is an open seat, students can add the class using Web Registration. If the class is full, students will need to continue checking the Schedule of Classes (classes.usc.edu) to see if a space becomes available.

Dates to Remember:

|Last day to add classes or drop and receive a refund |Friday – January 25th |

|Last day to drop without a W or change P/NP to Letter Grade |Monday – February 25th |

|Last day to drop with "W" |Tuesday – April 5th |

Retention of Graded Coursework

Graded work that has not been returned to you will be retained for one year after the end of the semester. Any other materials not picked up by the end of the semester will be discarded after final grades have been submitted.

Statement of Academic Conduct

USC seeks to maintain an optimal learning environment. Students are expected to submit original work. They have an obligation both to protect their own work from misuse and to avoid using another’s work as their own. All students are expected to understand and abide by the principles of academic honesty outlined in the University Student Conduct Code (see University Governance, Section 11.00) of SCampus (usc.edu/scampus or ). The recommended sanctions for academic integrity violations can be found in Appendix A of the Student Conduct Code

Students enrolled in any class offered by the Leventhal School of Accounting are expected to uphold and adhere to the standards of academic integrity established by the Leventhal School of Accounting Student Honor Code.  Students are responsible for obtaining, reading, and understanding the Honor Code System handbook.  Students who are found to have violated the Code will be subject to disciplinary action as described in the handbook.  For more specific information, please refer to the Student Honor Code System handbook, available in class or from the receptionist in ACC 101

Academic Conduct

Plagiarism – presenting someone else’s ideas as your own, either verbatim or recast in your own words – is a serious academic offense with serious consequences. Please familiarize yourself with the discussion of plagiarism in SCampus in Part B, Section 11, “Behavior Violating University Standards” . Other forms of academic dishonesty are equally unacceptable. See additional information in SCampus and university policies on scientific misconduct,

Classroom Etiquette

It is expected that everyone will practice courtesy, professionalism and respect to one another while in the classroom. Failure to treat everyone in class with courtesy, professionalism and respect may result in a loss of professionalism points at the sole discretion of the professor.

The use of any personal communication device such as, CELL PHONES, TEXTING DEVICES, I-pods, etc. is considered to be unprofessional. Those devices are not permitted to be used at any time during class, and those devices must be in the off position, with the screen face down at all times when a student is in class. Violation of this requirement may result in a loss of professionalism points.

Advance Preparation Expectations

Students are expected to complete the individual advance required reading before the start time of each scheduled class meeting. Some of the reading assignments are not in the text book and the advance reading materials will be available in Blackboard. A schedule of the advance reading and homework assignments is included in course calendar.

Discrimination, sexual assault, and harassment

Discrimination, sexual assault, and harassment are not tolerated by the university.  You are encouraged to report any incidents to the Office of Equity and Diversity  or to the Department of Public Safety, . 

This is important for the safety of the whole USC community.  Another member of the university community – such as a friend, classmate, advisor, or faculty member – can help initiate the report or can initiate the report on behalf of another person.  The Center for Women and Men  provides 24/7 confidential support, and the sexual assault resource center webpage  describes reporting options and other resources.

Technology Policy

Laptop and Internet usage is not permitted during academic or professional sessions unless otherwise stated by the respective professor and/or staff. Use of other personal communication devices, such as cell phones, is considered unprofessional and is not permitted during academic or professional sessions. ANY e-devices (cell phones, iPads, other texting devices, laptops, I-pods) must be completely turned off during class time. Upon request, you must comply and put your device on the table in off mode and FACE DOWN. You might also be asked to deposit your devices in a designated area in the classroom.

Video recording of faculty lectures is not permitted due to copyright infringement regulations. Audio recording is only permitted if approved in writing in advance by the professor for each specific class session to be recorded. Use of any recorded or distributed material is reserved exclusively for the USC students registered in this class.

Use of Electronic Devices during Class

During class lectures, students may be permitted to use electronic devices such as laptop computers, tablets and other internet connected devices for the purpose of note taking, for research, reviewing materials that are on Blackboard, and to gain access to materials that are relevant to the lecture. Students may also use electronic devices while they are making presentations to the class and during Team activities that occur during class time.

Any electronic device that is being used must be operating in the silent mode. If the use of an electronic device is disturbing to any other student, then the use of any and or all electronic devices may be prohibited temporarily or for the duration of the class at the sole discretion of the professor.

Furthermore, during certain class sessions, all electronic devices are required to be turned to the OFF Position. These class sessions include:

• During any class session that a guest speaker is in attendance.

• During any class session where other members of the class are making a presentation (The presenters may use electronic devices during their presentations, but those in the audience may not.)

• During any examination or test taking time.

The use of any personal communication device such as, CELL PHONES, TEXTING DEVICES, I-

pods, etc. are not permitted to be used at any time during class, such devices must be in the off position, with the screen face down.

Recordings

No student may record any lecture, class discussion or meeting with the professor without the professor’s prior express written permission. The word “record” or the act of recording includes, but is not limited to, any and all means by which sound or visual images can be stored, duplicated or retransmitted whether by an electro-mechanical, analog, digital, wire, electronic or other device or any other means of signal encoding. The professor reserves all rights, including copyright, to lectures, course syllabi and related materials, including summaries, PowerPoints, prior exams, answer keys, and all supplementary course materials available to the students enrolled in this class whether posted on Blackboard or otherwise. They may not be reproduced, distributed, copied, or disseminated in any media or in any form, including but not limited to all course note-sharing websites. Exceptions are made for students who have made prior arrangements with DSP and the professor.

STUDENTS SHOULD BE AWARE THAT THE PROFESSOR RESERVES THE RIGHT TO RECORD ANY AND ALL CLASS SESSIONS.

The professor reserves the right to post any class recordings on to BlackBoard. The use of any recorded or distributed material is reserved exclusively for the USC students registered in this class

Students with Disabilities

USC is committed to making reasonable accommodations to assist individuals with disabilities in reaching their academic potential. If you have a disability which may impact your performance, attendance, or grades in this course and require accommodations, you must first register with the Office of Disability Services and Programs (usc.edu/disability). DSP provides certification for students with disabilities and helps arrange the relevant accommodations.  Any student requesting academic accommodations based on a disability is required to register with Disability Services and Programs (DSP) each semester. A letter of verification for approved accommodations can be obtained from DSP. Please be sure the letter is delivered to me as early in the semester as possible.

I would appreciate it if you would kindly provide me with your letter of verification at least 7 days prior to its first use. DSP is located in GFS (Grace Ford Salvatori Hall) 120 and is open 8:30 a.m.–5:00 p.m., Monday through Friday. The phone number for DSP is (213) 740-0776. Email: ability@usc.edu.

Support Systems

Student Counseling Services (SCS) - (213) 740-7711 – 24/7 on call

Free and confidential mental health treatment for students, including short-term psychotherapy, group counseling, stress fitness workshops, and crisis intervention.

National Suicide Prevention Lifeline - 1-800-273-8255

Provides free and confidential emotional support to people in suicidal crisis or emotional distress 24 hours a day, 7 days a week.

Relationship & Sexual Violence Prevention Services (RSVP) - (213) 740-4900 - 24/7 on call

Free and confidential therapy services, workshops, and training for situations related to gender-based harm.

Sexual Assault Resource Center

For more information about how to get help or help a survivor, rights, reporting options, and additional resources, visit the website:

Office of Equity and Diversity (OED)/Title IX compliance – (213) 740-5086

Works with faculty, staff, visitors, applicants, and students around issues of protected class.

Bias Assessment Response and Support

Incidents of bias, hate crimes and microaggressions need to be reported allowing for appropriate investigation and response.

Student Support & Advocacy – (213) 821-4710

Assists students and families in resolving complex issues adversely affecting their success as a student EX: personal, financial, and academic.

Diversity at USC –

Tabs for Events, Programs and Training, Task Force (including representatives for each school), Chronology, Participate, Resources for Students

Emergency Preparation

In case of an emergency if travel to campus is not feasible, the USC Emergency Information web site () will provide relevant information, such as the electronic means the instructors might use to conduct their lectures through a combination of USC’s Blackboard learning management system (blackboard.usc.edu), teleconferencing, and other technologies.

Emergency Phone Numbers

Emergency Info Line 213-740-9233

USC Emergencies 213-740-4321

USC Public Safety—Non Emergencies: 213-740-6000

Information Tune to KUSC Radio at 91.5 (FM)

USC Info Line 213-740-2311

Police/Fire Emergencies 911

Course Calendar

Voluntary Team

Date Class # Topics to be Covered Advance Reading Homework Assignments

|01/08 |1 |Introduce Instructor, review syllabus |Syllabus |None |Team Assignment #1 |

| | |Form Teams and 1st Team exercise. |Team Assignment #1 materials | |See Exhibit B |

| | |Introduction to Reporting and Analysis |Blackboard (BB) | | |

|01/10 |2 |SEC reporting Financial Reports, etc. |Pages 2-19 Textbook |None |None |

| | |BakerCorp 10K , Sushi Exercise |BakerCorp 2013 10K (BB) | | |

|01/15 |3 |Common Size & Index Analysis |Pages 69-113 Textbook |Question 2-2 |Team Assignment #2 |

| | |Trend Analysis , % change analysis, CAGR | |Question 2-3 |See Exhibit B |

| | | | |Exercise 2-5 | |

|01/17 |4 |Review Profitability Metrics and Ratios |Pages 134-157 Textbook |Exercise 1-9 | |

| | |Net Operating Income and Other Non-GAAP Key |Pages 212-239 Textbook |Exercise 1-11 |None |

| | |Profitability Metrics | |See (BB) for a homework | |

| | | | |problem | |

| |5 |Earnings Management |Pages 42-53 Textbook |See (BB) for homework |None |

|01/22 | | |Pages 134-157 Textbook |problems | |

|01/24 |6 |Liquidity Analysis |Pages 261- 275 Textbook |Question 2-50 |Team Assignment #3 |

| | | |Pages 309-328 Textbook |Question 2-54 Question 6-7 |See Exhibit B |

| | | | |Question 6-9 | |

| |7 |Solvency Analysis |Pages 329-351 Textbook |Question 10-9 |None |

|01/29 | | |Pages 383-394 Textbook |Question 10-14 | |

| | | | |Question 10-16 | |

|01/31 |8 |Long Term Assets |Pages 277-296 Textbook |Question 3-6 |Team Assignment #4 |

| | |Depreciation | |Question 3-7 |See Exhibit B |

| | |Secrets of Fixed Asset Analysis | |Question 3-9 | |

|02/05 |9 |Mid-Term Examination |NONE |See BB for homework problem|NONE |

|02/07 |10 |Review Mid-term Exam |Pages 479-499 Textbook |NONE |None |

| | |Introduction to Statement of Cash flow | | | |

|02/12 |11 |Statement of Cash flows |Pages 479-499 Textbook | | |

| | | |What is Free Cash Flow |NONE |NONE |

| | | |And How do I Calculate it? | | |

| | | |Dr. Pamela Drake (BB) | | |

|02/14 |12 |Cash Flow Analysis |Pages 479-499 Textbook Review |Problem 7-3(a) |NONE |

| | |Free Cash Flow |Problem 7-4 |Exercise 7-3 | |

|02/19 |13 |Team Presentations on Cash Flow |None |None |Team Assignment #5 |

| | |And review for cash flow exam | | |See Exhibit B |

|02/21 |14 |Cash Flow Examination |None |NONE |NONE |

|02/26 |15 |Review Cash Flow Examination |NONE |NONE |NONE |

| | |Final Exam Review and preparation | | | |

|02/28 |16 |Final Exam |NONE |NONE |NONE |

EXHIBIT A- Process for Team Separation

An important learning objective of this course is for students to develop leadership and team skills. While many, if not all, organizations have some level of dysfunction, in most cases, working through the dysfunction to a successful conclusion is the best course of action. It is a very serious matter if there is dysfunction in a team to point when separation is contemplated. However, in the uncommon situation when separation is unavoidable, the processes below shall govern.

A member of a team wishes to separate from the team. If a member of a team wishes to separate from his/her team, then the person desiring to separate must first meet with me and discuss the issues and their rationale for desiring separation. Depending on the circumstances, I may attempt to arrange a mediation conference to resolve the issues. If I concur that reconciliation cannot be made, the separation shall occur ; however, depending on the circumstances, I may penalize any and all parties grading points. The individual who is separating may request to be assigned to another team( team to be determined by me) or shall have the right to form a single member team and in such case, shall be responsible for all of the team course work the same as any other team.

A team wishes to remove a member from team. If a team wishes to separate itself from a particular member, then those members should meet with me collectively as a group and discuss the issues and rationale for separation. Depending upon the circumstances, I may attempt to arrange a mediation conference to resolve the issues. If I concur that reconciliation cannot be made, then the separation shall occur; however, depending on the circumstances, I may penalize any and all parties grading points. The individual who is being asked to leave the team shall have the right to be assigned to another team or to work as a single member team. If the individual chooses to work as a single member team, then they are responsible for all of the team course work the same as any other team.

EXHIBIT B- TEAM ASSIGNMENTS

Date Assignment Number Team Assignment Description

|01/08 |Team Assignment # 1 |Each team will select a company that they will perform other analysis on during the course of |

| | |this semester The only advance preparation is that. Each student should review the list of the |

| | |following public companies and prioritize the companies they would most like to analyze. More |

| | |details will be provided during class. The companies available for selection are as follows: |

| | |American Airlines, Boeing Company, General Electric, Northrup Grumman, IBM, Ford, US Steel, |

| | |Verizon, Intel, Proctor & Gamble, General Mills, Honeywell, Hewlett Packard, Raytheon, Walt |

| | |Disney, 3M and Cisco. |

|01/15 |Team Assignment # 2 |Each team will prepare a written presentation to be turned in at the beginning of class that |

| | |includes all of the following elements. |

| | |Brief Introduction of their company indicating its primary lines of business that the company |

| | |engages, the location of the corporate headquarters and 5 risk factors that the company |

| | |disclosed that were interesting. |

| | |The names, tenure and, compensation of the CEO and CFO. |

| | |The name of the public accounting firm that conducts its audit and the fees paid for the audit. |

| | |The latest consensus EPS by the company’s analysts. |

| | |Any non-GAAP information disclosed in the press release or SEC reports and the company’s reasons|

| | |why they think it is important. |

| | |A quote from either the CEO or the CFO in the latest press release, that was interesting and why|

| | |the team found the quote interesting. |

|01/24 |Team Assignment # 3 |Each team will prepare a written presentation to be turned in at the beginning of class that |

| | |includes all of the following elements for three year period: |

| | |Computation of EBT, EBIT, EBITDA, and effective tax rate showing detailed computations. |

| | |A Common size and index income statement for the past three years. |

| | |Computation of NOPAT show detail computations |

| | |Detail of composition of CORE Earnings with a reconciliation to net income. |

| | |Computation of RONA and detail of Net Operating Assets. |

| | |Compute CAGR of Revenue for three years, show computations |

|01/31 | |Each team will prepare a written presentation to be turned in at the beginning of class that |

| | |includes all of the following elements. |

| | |A liquidity and a Solvency analysis of the company for the last two Years from its latest 10-K |

| | |Report |

| |Team Assignment # 4 |Computation of at least 3 Leverage Ratios, 3 Coverage Ratios and 3 Capital Ratios for the past |

| | |two years. |

| | |Computation of Current Ratio, working capital, Acid Test and Accounts Receivable Turnover, and |

| | |DSO |

| | |Computation of earnings to Fixed Charges using EBIT as the earnings. |

| | |Team’s opinion of the liquidity and solvency of the company. |

|02/19 | |Each team will prepare a written presentation to be turned in at the beginning of class that |

| | |includes the computation of: |

| |Team Assignment #5 |Free Cash Flow, Unlevered Free Cash Flow, & Levered Free Cash Flow |

| | |CAGR of CFO over the past three years |

| | |Team Conclusion of the Cash Flow of the Company |

| | |Team should be prepared to present their work to class of February 19. |

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