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Syllabus
(download PDF version) 1.
Overview This
course examines the role of financial statement analysis in the evaluation of
a firm and the prediction of its future condition. The course is designed
to provide: ·
a framework and
the skills to analyze and interpret financial statements ·
exposure to
public sources of financial information used in capital markets ·
an appreciation
for the usefulness and limitations of financial statement analysis in
specific decision contexts. The
course is targeted to a wide range of students, including those preparing for
careers in general management as well as in investment banking, financial analysis
and consulting. The topics covered
(see Item 8 below) are intended to complement those discussed in ACCOUNTG 442
(Valuation). The material is designed
for students with little or no background in security analysis. I assume a solid understanding of financial
accounting and finance. I also expect that you are comfortable with working
with Excel spreadsheets and with collecting data from various databases, both
from on-line and/or in the library. 2.
Course materials ·
Required course
packet: contains teaching notes, assignments, and readings. ·
Required
textbook: Financial
Reporting and Statement Analysis – A Strategic Perspective, 6th edition, by
Stickney, Brown, and Wahlen, Thomson/South-Western. ISBN: 0-324-30295-9. The
book is available from ·
Course
website. There is a password protected
website for the course. The website address is: http://faculty.fuqua.duke.edu/~qc2/accountg441/
. I will post relevant course
materials (such as spreadsheets to the cases) to the website. 3.
Course grade Fuqua
has established a recommended grade distribution for elective courses (no
more than 30% SPs, 45% HP, and at least 25% P, LP and F). Your grade in this course will be based on:
*You have the option to write up both Royal Caribbean
and Bishay and use the higher score of the two for this part of the grade. 4.
Case preparation, discussion, and class
participation This
course relies heavily on cases, which are very important pedagogical tools
for this course. A significant amount
of learning takes place from analyzing companies’ financial statements. These cases would require substantial
preparation on your part. We will have
at least one case discussion for almost all classes. I expect all students to arrive in class
ready to open the case and provide meaningful contributions to the class
discussions. Many
cases will represent your first exposure to a particular issue or problem. In
those instances, you are expected to read ahead and work through the case
questions to the best of your ability.
The intent of structuring and timing the cases in this fashion is to
stimulate, rather than solidify, your thinking and the class
discussions. As
you will see throughout the course, many case questions are qualitative in
nature and the answers to these questions depend on your assessment of the
company’s situation. As such, there is
no “official” answer to these questions, and no “official” solutions will be
available or posted. With the exceptions of a few pro-forma exercises, I will
not post my “solution” in spreadsheet forms.
Please pay attention to class discussions and to learn to come to your
own conclusion based on these discussions.
All
case deliverables are due at the beginning of the class and are to be
completed in teams. (See item 6 on Teamwork and evaluation for details.) I
will not accept late assignments. Each team needs to submit only one copy of
the case write-up. Each case write-up
should be no more than 3-4 pages, with at least 10 points font size, properly
margined and spaced. Supporting
spreadsheets do not count for case pages but should not exceed 5 pages in
total. Supporting spreadsheets should be prepared just as carefully and as
easily readable as your main write-up. A core dump printing of all your
spreadsheets will not be read and will not earn you any grade. You
should be prepared to discuss each case in the designated class session. This includes cases that have write-ups and
those that do not. It is important
that you work through all cases before coming to class. A significant part of your course
participation grades will depend on your participation in case discussions
(especially those that do not have write-ups). Other determinants of your course
participation grades include your record of class attendance. 5.
Practice problems, exams and group final project There
will be a take-home midterm and an in-class midterm exam. The midterm take-home is an individual case
analysis. It will be made available to you after Session 7. It is due at the beginning of the Session
8. The
in-class exam is comprehensive and covers all materials we will have
discussed up to the exam date. It will take place at the scheduled class
time. Both
the take-home and in-class exams are open
book and open note. They are to be
completed individually, and should reflect original individual work. For the take-home
midterm, you cannot discuss the exam with anyone before the exam’s due date.
Doing so is considered a violation of the Fuqua Honor Code. For the in-class exam, you are allowed to
bring calculators and laptops provided that you disable your laptop’s ability
to access the internet. For
each topic, I have selected some representative problems from the textbook
(listed on page 4 under item 8). I highly recommend that you use them as
practice problems. I also include some
sample exam questions in the course packet for you to prepare for the
in-class exam. The
final team project should be done by the same team for the case
deliverables. In the project, you will
analyze the financial performance of a company of your choosing. Detailed
instruction on the project is given at the end of this syllabus. 6.
Teamwork and evaluation Please
choose your own team members. The
minimal number of members in each team allowed is 4 and the maximum is
6. Team members can be from different
sections. Team assignments are due at the first session of any member. At
the end of the term, you will be asked to assess confidentially the
contribution of the individuals in your team.
As such, team membership must be maintained throughout the course.
Your team grade (including both the grades for case deliverables and the
grade for the final project) will be adjusted by your team evaluation. For
example, if your team has a perfect score (say, 100 points) on all team
assignments, but all your team members believe you contributed only 50% of
what other team members have contributed, then your score for the team cases
will only be 50 points. 7. Honor Code The Honor Code of the
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