University of Southern California



Faculty: James (Jim) Leonetti

Office location: ACC 214 (2nd Floor Leventhal Building)

Office Hours: 9:00 am - 4;00 pm Tuesday by appointment

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

Course Duration: Monday January 13, 2020 to Wednesday March 4, 2020

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 successful completion of the course, students will be able to:

1. Present financial analysis in a succinct and effective manner

2. 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. Explain Non-GAAP income measures and why these are sometimes preferred over GAAP measures.

5. Analyze the Statement of Cash Flows and understand cash metrics

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

7. Demonstrate 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%-80% of the scaled points awarded

• Grade of a C+ to a C- earned for achieving between 79%- 65% of the scaled points awarded

• Grade of a D+ to a D- earned for achieving between 64%-50% of the scaled points awarded

• Grade of an F for achieving less than 50% 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

Professionalism 50 5%

Cash Flow Exam 225 22.5%

Midterm exam 250 25%

Team Assignments 125 12.5%

Final exam 350 350%

Total 1,000 100%

Make- up work is generally not available, unless an illness or an emergency situation arises. Extra Credit Points or additional points are not offered in this course.

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.

Professionalism total points to be earned 50 or 5% of total.

Professionalism is important in this course. 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 to others in class 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 the student 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 ones first and later notify the instructor as soon as practicable.

Team 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 no more than 5 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 7 written presentations. Teams may be called upon through-out the semester to present their work to the entire class.

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. Assignment #1 is worth 5 points and Assignments 2-7 are worth 20 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 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, may not be accepted.

Examinations.

There are three examinations that will be held during this course. The following requirements will be in effect for each of the examinations:

• Students are permitted to bring one page of notes to the exam. Notes may be written on both sides of the page.

• 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.

• Students will be provided with Leventhal calculators for use on the exam.

• Examinations are required to be performed individually. Students may not use the work of others and must take care not to allow other students to see their work.

• There are no scheduled make-up exams or alternative dates to take this exam

Cash Flow Examination 225 points or 22.5% 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 Monday, February 19, 2020 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.

The Cash Flow examination will be returned to students on February 24, 2020 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 26, 2020. All exams will be final after such time.

The exam may include the preparation of a statement of cash flow, the calculation of free cash flow metrics, cash flow ratios and analysis of the statement of cash flows. 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.

Mid-term Examination 250 points or 25% of the total.

The Midterm exam will be held on February 3, 2020 in our regular classroom. This exam is to be completed individually. Collaboration with anyone else is strictly prohibited. The Midterm examination will be returned to students on February 05, 2020 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 10, 2020. All exams will be final after such time.

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.

Final Examination 350 points or 35% 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 March 4, 2020. 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.

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 are 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.

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 |Thursday – January 23, 2020 |

|Last day to drop without a W or change P/NP to Letter Grade |Thursday – February 6, 2020 |

|Last day to drop with "W" |Wednesday – February 26,2020 |

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

Students are expected to make themselves aware of and abide by the University community’s standards of behavior as articulated in the Student Conduct Code. 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

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

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.

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.

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

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. 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.

The Office of Disability Services and Programs - (213) 740-0776

dsp.usc.edu

Support and accommodations for students with disabilities. Services include assistance in providing readers/notetakers/interpreters, special accommodations for test taking needs, assistance with architectural barriers, assistive technology, and support for individual needs.

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: dsp.usc.edu.

Support Systems

Counseling and Mental Health - (213) 740-9355 – 24/7 on call

studenthealth.usc.edu/counseling

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

Reporting Incidents of Bias or Harassment - (213) 740-5086 or (213) 821-8298

usc-advocate.care_report

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

equity.usc.edu, titleix.usc.edu

Information about how to get help or help a survivor of harassment or discrimination, rights of protected classes, reporting options, and additional resources for students, faculty, staff, visitors, and applicants. The university prohibits discrimination or harassment based on the following protected characteristics: race, color, national origin, ancestry, religion, sex, gender, gender identity, gender expression, sexual orientation, age, physical disability, medical condition, mental disability, marital status, pregnancy, veteran status, genetic information, and any other characteristic which may be specified in applicable laws and governmental regulations.

Reporting Incidents of Bias Assessment Response and Support -(213) 740-5086 or (213) 821-8298

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

USC 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 – (213) 740-2101



Information on events, programs and training, the Provost’s Diversity and Inclusion Council, Diversity Liaisons for each academic school, chronology, participation, and various resources for students.

The Office of Disability Services and Programs - (213) 740-0776

dsp.usc.edu

USC Emergency - UPC: (213) 740-4321, HSC: (323) 442-1000 – 24/7 on call

dps.usc.edu, emergency.usc.edu

Emergency assistance and avenue to report a crime. Latest updates regarding safety, including ways in which instruction will be continued if an officially declared emergency makes travel to campus infeasible.

USC Department of Public Safety - UPC: (213) 740-6000, HSC: (323) 442-120 – 24/7 on call

dps.usc.edu

Non-emergency assistance or information.

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 due

|01/13 |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) | | |

| | |BakerCorp 10K |BakerCorp 2013 10K (BB) | | |

| | |Review of Financial Statements | | | |

|01/15 |2 |Review Balance Sheet, and Statement of Shareholder|Pages 2-19 Textbook |None |None |

| | |Equity, Net Operating Assets and Operating | | | |

| | |Liabilities. | | | |

| | |Sushi Exercise | | | |

|01/20 | |Martin Luther King Day- USC Holiday |None |None |None |

|01/22 |3 |Common Size & Index Analysis |Pages 69-113 Textbook |Question 2-2 |Team Assignment #2 |

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

| | |of Operating Leverage, | |Exercise 2-5 | |

|01/27 |4 |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 |Team Assignment # 3 |

| | |Profitability Metrics | |See (BB) | |

| |5 |Earnings Management |Pages 42-53 Textbook |Question 2-50 | |

| | |Stock Based compensation |Pages 134-157 Textbook |Question 2-54 Question 6-7| |

|01/29 | | | |Question 6-9 | |

| | | | |See (BB) | |

|02/03 |6 |Mid-Term Examination |None |None |None |

|02/05 |7 |Review Mid-term Exam |Pages 479-499 Textbook |None |None |

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

|02/10 |8 |Cash Flow Analysis |Pages 479-499 Textbook |None |Team Assignment # 4 |

| | |Free Cash Flow |What is Free Cash Flow | | |

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

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

|02/12 |9 |Statement of Cash flows |Pages 479-499 Textbook |See (BB) for homework | |

| | | |What is Free Cash Flow |Problem 7-3(a) | |

| | | |And How do I Calculate it? |Problem 7-4 | |

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

|02/17 | |President’s Day USC Holiday |None |None |None |

|02/19 |10 |Cash Flow Examination |None |None |Team Assignment # 5 |

|02/24 |11 |Review Cash Flow Exam |Pages 261- 275 Textbook |Question 3-2, 3-6 | |

| | |Liquidity Analysis |Pages 309-328 Textbook |Question 3-9, 3-10 | |

| | | | |See (BB) for homework | |

|02/26 |12 |Solvency Analysis |Pages 329-351 Textbook |Question 10-9 |Team Assignment # 6 |

| | | |Pages 383-394 Textbook |Question 10-14 | |

| | | | |Question 10-16 | |

| | | | |See (BB) | |

|03/02 |14 |Long Term Assets |Pages 243-262 Textbook |Question 4-14 |None |

| | |Intangible Assets | |Question 4-15 | |

| | |Secrets of Fixed Asset Analysis | |See (BB) | |

|03/04 |15 |Final Examination |None |None |Team Assignment #7 |

| | | | | |See Exhibit B |

EXHIBIT A- Process for Team Separation

An important learning objective of this course is for students to develop 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

|01/13 |Team Assignment # 1 |Each team will select a company for which they will perform analysis during the course of this semester The only advance |

| | |preparation for Assignment # 1 is 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, General Electric, Mobile Mini, Ford, US Steel, Verizon, Mattel, ATT, and Williams Scotsman |

|01/22 |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 summary of their company indicating its primary products and lines of business that the company engages, the markets |

| | |that it conducts business, its primary competitors and the location of the corporate headquarters. |

| | |The team should list 5 risk factors that the company disclosed that were interesting. Please indicate why each Risk factor |

| | |was selected by the team and why the team found it to be interesting. |

| | |List 5 risk factors that the team found uninteresting or not particularly helpful to analyzing the company. |

| | |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 work only. |

| | |The latest consensus EPS by the company’s outside 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 the reasons why the team found |

| | |the quote interesting. |

| | |The team should assume that readers of their analysis know absolutely nothing about their company. |

|01/27 |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 Adjusted EBIT show detail computations |

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

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

| | |Compute the CAGR of Assets for three years. |

| | |Evaluate any non-GAAP metrics used in a recent press release. Provide the team’s opinion on the use of the Non-GAAP metrics |

| | |and on any comments made by company executives about those metrics. Assume the reader of your opinion does not have any access|

| | |to the financial statements of the company. |

| |TEAM ASSIGNMENT |EXHIBIT B- TEAM ASSIGNMENTS |

| | |Team Assignment Description |

|Date | | |

|02/10 |Team Assignment #4 |See the Case of LCT LLC posted in Blackboard, under Content, in the sub-folder Team Assignments. Each team should complete |

| | |the case assignment that is detailed within the folder. |

|02/19 |Team Assignment #5 |Each team will prepare a written analysis of the statement of cash flows of their company to be turned in at the beginning of|

| | |class that includes the following: |

| | |Three year summary of Statement of Cash Flows |

| | |Free Cash Flow, Unlevered Free Cash Flow, & Levered Free Cash Flow |

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

| | |Conclude if the company is investing sufficiently to maintain its capital investments. Support this conclusion with analysis. |

| | |Summarize what the management of the Company states about cash flow |

| | |How much cash has management returned to common shareholders over the each of the past three years. |

| | |Provide the team’s opinion on the company’s cash sources and uses. Include in this opinion, your views on how transparent or|

| | |communicative the company has been in its public disclosures ( MD&A) and the press releases. Your opinion should be written as|

| | |a letter of recommendations to a new CFO who has no knowledge of the Company or its financial statements. |

|02/26 | |Each team will prepare an analysis of the liquidity position of their company. stating the team’s Opinion of Liquidity, |

| | |supported , at a minimum by analysis that includes all of the following elements. |

| | |An analysis of all current assets on a current Balance Sheet. At a minimum each team should analyze the following: |

| | |Comparison with the prior reported Balance Sheet |

| |Team Assignment # 6 |Comparative DSO of Accounts Receivable |

| | |Comparative Days Sales of Ending inventory |

| | |Analysis of Current liabilities on a current balance sheet. At a minimum each team should analyze the following: |

| | |DPO of Accounts Payable |

| | |Computation of accrued liabilities. (look in the notes) |

| | |Amount of the current portion of long term debt. |

| | |Compute the following liquidity Ratios |

| | |Quick ratio |

| | |Current ratio |

| | |Cash to current asset ratio ( show computation) |

| | |Cash to current liability ratio ( show computation) |

| | |Review any disclosure of liquidity made in a recent MD&A or in recent press releases. Provide the Team’s opinion of the |

| | |liquidity and solvency of the company. Refer to the metrics computed above and other analysis to justify your opinion. Assume|

| | |the reader of your opinion does not have access to any financial statements or information of the company. |

|Date |TEAM ASSIGNMENT |EXHIBIT B- TEAM ASSIGNMENTS |

| | |Team Assignment Description |

|03/04 |Team Assignment |Each team will prepare an analysis of the Solvency of their company. Assume the reader has no knowledge of your company or its|

| |#7 |financial statements. Each team will voice a clear opinion of the Company’s Solvency, supported , at a minimum, by analysis |

| | |and rationale that includes all of the following elements. |

| | |Detail of all borrowings of the company, indicating the outstanding balance, interest rate, maturity dates, collateral pledged|

| | |and other key terms. |

| | |5 Capital Ratios |

| | |5 Leverage Ratio |

| | |3 Coverages ratios, including earnings to fixed charges |

| | |Comparison of the company’s ratios to two competitors or to industry averages. |

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