Finance 561

Financial Statement Analysis – spring 2008

 

 

Professor:  Dr. Phil Malone

Office: 337 Holman Hall

Phone: 915-5464

Office Hrs: MW 11:00 - 12:30, or by appointment

Email: pmalone@olemiss.edu     Web Page: http://faculty.bus.olemiss.edu/pmalone

 

 

Class Time: 8:00 - 9:15 Tuesday & Thursday

Class Room: Conner 112

 

Texts:

Understanding Financial Statements, eight edition, Fraser and Ormiston, Pearson Prentice Hall, 2007.

It is suggested that students have one or more reference texts such as:

Intermediate Financial Management, 9th edition, Brigham and Daves, Thomson Southwestern, 2007.

Investments, 6th edition, Bodie, Kane, and Marcus, The McGraw-Hill Companies, 2005.

Selected articles, chapters, and web-page documents will provide background readings.

 

Recommended - a good financial calculator such as:  Sharpe EL 733 or EL 533, HP Financial Series (10B, 12C, etc.), TI BA2 Plus or Casio Financial Series and access to a computer.

 

Catalogue Description:

Theory and advanced principles of finance with emphasis upon the use of modern techniques in making business decisions.  

 

Prerequisites:

The prerequisites for this course are C minimum grades in Finance 331, Accounting (201 and 202), Economics (202, 203 and 230).   It is presumed that students have retained a reasonable amount of useable information from these six courses.  Finance 331 is a critical prerequisite.  Students are expected to understand basic finance principles and concepts.  Students will also need to review their accounting, economics and statistics for specific assignments.  There is overlap between this course and FIN 338, FIN 533 and FIN 431.  Students who have completed these courses will have an advantage over students who have not.

 

Course Objective:

The main objective of this course is to provide an opportunity to apply knowledge of the theories and institutional aspects of finance to find solutions to actual problems faced by the firm.  This course is intended to build upon the material from Finance 331 Emphasis is placed upon evaluation of the balance sheet, profitability, cash flow and risk characters of the firm.

           

Course Format:

This is a lecture/project-based course with the majority of class time devoted to understanding basic financial theory and applying this knowledge to valuing equity investments.  The course will be a combination of class presentations, lectures and discussions within a valuation context.  Typically, there will be an assignment or readings and lectures on background material.  Class discussions/presentations will then focus upon issues and techniques appropriate to evaluation of an investment alternative.  Due to the nature of the course, attendance is extremely important.  Students are expected to attend all class meetings.

 

Grades:

Grades will be determined in the following manner:

            Test #1 (Part I)                                                 350 Points

            Test #2 (Part II)                                               350 Points

            Assignments/ Projects                                      300 Points

            Final Examination                                            350 Points

            Bonus Assignments, Quizzes, etc.                   20 - 75 Points

 

Tests:

Each student must drop one test grade (only two of the three tests will be used in determining final grades).  No makeup tests will be given unless a student misses two tests and has a valid excuse for missing BOTH, in which case a special makeup will be given during finals.  Excuses for any missed test MUST be presented to the instructor IMMEDIATELY (!!!) after the student misses a test.  Valid excuses will primarily be limited to chronic illness and death in the immediate family (weddings are not included ‑ even your own).  Also students should not expect an incomplete to be given in lieu of a low grade.

 

Final Examination:

The final examination for this class is scheduled for 8:00 am Tuesday, May 6.

 

Graduate Credit:

The finance department has requested that this course be renumbered as FIN 461.  If that request is approved graduate credit would no longer be available for FIN 561.  While this course is offered on an interim basis as credit in place of FIN 581 the following additional requirements will be necessary to received graduate credit:

(1)    The second of two presentations made by a graduate student will be solo (undergraduate students present in groups of four,

(2)    Graduate students must submit a detailed written analysis of that presentation,

(3)    Graduate students must a short paper (approximately eight pages) dealing with a specific problem area of valuation analysis (such as good will, deferred taxes, leases, etc.).

 

Grade Assignments:

            A                     900 to 1000

            B                      800 to 899

            C                      700 to 799

            D                     600 to 699

            F                      below 600

 

Assignments:

The quality of classroom discussion depends heavily upon the degree of student preparation.  Students who have not reviewed and read relevant material or prepared supporting figures for their analysis will be unable to participate effectively in class discussion, answer test questions, etc.  Accordingly 20% of the course grade is contingent upon the homework grade.  Assignments are to be written up and handed in for evaluation (spreadsheet printouts and graphics will be required on some assignments).  Everyone is expected to work assignments and submit them on or before the due date (late projects will not be accepted after the due date).

 

Statement of Academic Integrity:

The School of Business Administration upholds honor and academic integrity in all of its teaching, research, and service activities.  All business faculty, staff, and students are charged with the responsibility to behave with personal and professional integrity and to refrain from dishonorable conduct.

 

Cheating:

Any student caught cheating will be assigned an F in the course.  In most cases a statement will also be made to that effect in the student's record.  Cell phones are to be turned off during class periods but this is especially important during examinations and quizzes.

 

Office Policy:

My office is Holman 337.  I will be glad to talk to you about material that you do not understand in this course, your performance in this course, majoring in finance, problems that you may have which might affect your class performance, etc.  I will not, in general, be available to help with your assignments other than to answer specific questions of a clarifying nature.  Feel free to contact me by:

1)      Setting up an appointment to talk to me before or at the end of class or me by telephoning me at 915-5464.

2)      Coming by the office during regular office hours

3)      Scheduled office hours for the spring are 11:00 to 12:30 on Tuesday and Thursday.

4)      Dropping by the office anytime {here you are taking your chances as I may not be in or  I may be busy with something else in which case I will make an appointment to talk with you later}.

           

Other Information:

If you have any condition, such as a physical or learning disability, which will make it difficult for you to carry out the work outlined or which will require academic accommodations, please notify me.