UNIVERSITY OF BRIDGEPORT
School of Business
FIN 650Cases in Finance (Stamford – Riverbend)
Instructor:Dr. James S. Sagner
Office Hours:Thursday, 3 – 6 p.m.
Office Location:Room: Mandeville 315
Contact Information: e-mail –
telephone – 203-576-4376
Semester:Fall 2013
Day/Time:Saturdays, Aug. 31; Sept. 7, 21, 28 (no class Sept. 14); Oct. 5, 12; 9 a.m. – 4 p.m.
COURSE DESCRIPTION
The focus of this course is the application of managerial finance principles (from FIN600: Financial Management) to the financial decisions made by business. The purpose is to develop student analytical ability through the discussion and analysis of finance cases. Topics covered include financial concepts and planning; valuation, rates of return and leverage; cost of capital; dividend policy; sources and uses of investment and working capital; and international finance.
PREREQUISITES
It is absolutely essential that you complete ACCT 600 and FIN 600 before attempting this course.
COURSE STUDENT LEARNING OBJECTIVES
Upon completion of this course, students will be able to:
1.Enhance competency in the evaluation of financial problems and cases through ratio analysis and common-size financial statement analysis.
2.Consider alternative views of capital budgeting concepts.
3.Evaluate concepts used in calculating a company’s cost of capital.
4.Understand cash budgeting and other topics in the management of working capital.
5.Appreciate significant issues in international finance for multinational companies.
- Develop skills in analyzing and developing solutions for comprehensive financial cases.
COURSE OUTCOMES
The following outcomes are expected of students in this course:
1.Review the material covered in FIN 600 and self determine the need to review topics in detail, including questions and problems from the end of each assigned chapter.
2.Actively participate in class discussions and activities as well as demonstrate skill in the application of financial calculator and spreadsheet tool applications.
3.Complete a mid-term test and a final test that involve the written analysis of finance cases. .
COURSE MATERIALS
- Any text used in FIN 600 (or its equivalent). Your instructor teaches from Stephen A. Ross, Randolph W. Westerfield and Bradford D. Jordan, Essentials of Corporate Finance, McGraw-Hill Irwin, 7th edition, 2011 (ISBN-13 9780073382463), but you may use any similar text that is available to you.
- A calculator, preferably a financial calculator.
- Cases that are posted in Canvas (successor on-line resource to Blackboard).
OUTCOME MEASURES
Note: Percentages are the relevant components of the final grade for each student.
1.Case assignments (50%) – There are 3 written and 13 oral cases to be prepared for this course from that are provided to you in Blackboard. The written cases are due in sessions 2 (worth 12½%), 4 (worth 12½%) and 6 (worth 25%). The session 6 case is assigned as a major effort by each student to prepare an in-depth analysis of the case assigned for that session. Any recent finance text that you used in FIN 600 should be used to support your analysis of the cases. The session 2 and 4 written cases are to be typed, single-spaced and single-sided. For those 2 cases, limit your case analysis to 3 typed pages including exhibits. For the session 6 case, prepare a complete analysis of up to 8 pages using Word, Excel and PowerPoint (if appropriate) as if you were presenting your results to a committee of senior managers. Written case analyses will be evaluated on the basis of:
a.Analysis and Content – Use of financial concepts, facts, diagnosis and the application of the tools presented in the course.
b.Closure – Effective summarization and conclusion supported by the content presented in your analysis.
c.Writing skills – Proper grammar and correct spelling are essential in business. Make certain that you turn in professional quality work!
The cases in this course are all reasonably short, with questions that the learner is expected to consider. While it is important to answer these questions, or those questions deemed important by the instructor, there may be other issues that should also be reviewed. For example, the first case -- Helping Hand -- addresses issues related to liquidity, whereas the case can easily be expanded to discuss any financial statement topic.
Class discussion and case assignments in the first half of the course are oriented to the essential topics in finance as covered in FIN 400/600, including basic financial concepts, ratio analysis, capital budgeting techniques and cost of capital. The second half of the course deals with other topics of importance, including ethical issues, international finance and the analysis of comprehensive financial cases.
Written case assignments are due to the instructor at the beginning of the class and before the discussion of the case. It is not acceptable to turn in your written work at the end of class after writing down or summarizing the gist of the class discussion. If you wish to make notes on your case solution, make a 2nd copy for yourself.
2.Class participation and attendance (5%) – Students are expected to participate in class discussion of the cases to demonstrate their understanding and synthesis of financial concepts. Thoughtful comments are required as a component of the course grade. In other words, you cannot come to class, listen, and receive a passing grade for the participation component. You must be prepared to offer ideas, commentary and criticism of the case protagonists, the instructor and your fellow students.
3.Mid-term and final tests (22½% each = 45%) – Two tests will be given in class; see the Course Schedule for the topics to be addressed. Tests will involve financial cases. The tests will be open book, and calculators and/or laptop computers may be used. However, you may not access the Internet or any communications device. The tests are cumulative, because the nature of finance (and most business subjects) requires comprehensive knowledge of the field of study.
Criteria in grading the cases will include:
- Ability to identify and state the major case problem(s).
- Reasonableness of assumptions, which should be clearly stated.
- Ability to gather data from available sources.
- Ability to integrate financial principles and concepts with case information.
- Ability to clearly state conclusions and deductions.
- Proper weighing of all considerations and demonstration of relevant factors.
COURSE SCHEDULE
Week No./ Date / Activities / Assignments*(written case assignments are in BOLD)
1/Aug. 31 / Key FIN 650 topics and the role of financial cases will be discussed and completed in class. Specific outcomes include appreciation of alternative views of standard managerial finance concepts; discussion of the role of financial markets and governing regulation; and understanding of the diagnostic process in analyzing financial cases. We use the assigned cases to establish the purpose of the finance case. / Helping Hand
Holly Fashions
Bridgeport Clothing
2/Sep. 7 / Ratios can be used to evaluate any business.
Though the student must be familiar with the calculation and meaning of each individual ratio, the primary emphasis is on the inter-relationship between the ratios. / Miller Building Supplies
Ft. Greenwold
Taylor Brands
3/Sep. 21 / There are various methods for ranking capital budgeting proposals. The basic selection methods are established, including payback, net present value and internal rate of return. At the discretion of the instructor, specific issues are addressed such as additional working capital requirements. / Topeka Adhesives I/II
Letter Perfect
Cash budget problem
MID-TERM EXAM^
4/Sep. 28 / Financial forecasting is essential for the strategic growth of any business. The pro forma income statement and balance sheet for most businesses are based on accrual accounting, while the cash budget is a cash accounting document that shows whether adequate cash will be on hand to meet financial obligations as they come due. For the cash budget, we categorize collections into cash receipts and expenses into cash disbursements, and calculate the cash excess or shortfall, resulting in borrowing, repayment of loan or investment decisions. / Review Mid-Term Exam
Deerpark
Taylor Brands
BOE of Colombia
5/Oct. 5 / The investors' required rate of return translates into the cost of financing for the firm. There should be a dual emphasis on properly determining the after-tax cost for each type of financing and on determining the appropriate weights to be assigned to the various sources of financing. / Jumbo Corporation
General Motors
Everlast**
6/Oct. 12 / Financial managers must act with honesty and integrity as well as avoiding conflicts of interest in personal and professional relationships, and providing accurate, complete, objective, relevant, timely and understandable information. They must comply with all applicable rules and regulations of federal, state, provincial and local governments and other appropriate private and public regulatory agencies. / BARELY EDIBLE** ^
Meredith Corporation**
FINAL EXAM^
*All cases are in Canvas
**You should read “A Note on Solving Comprehensive Cases”
^Major course assignment
GRADING SCALE FOR THE COURSE
Letter / Quality Points / PercentageEquivalency / Letter / Quality Points / Percentage
Equivalency
A / 4.00 / 94+ / C / 2.00 / 74-76
A- / 3.67 / 90-93 / C- / 1.67 / 70-73
B+ / 3.33 / 87-89 / D+ / 1.33 / 67-69
B / 3.00 / 84-86 / D / 1.00 / 64-66
B- / 2.67 / 80-83 / D- / 0.67 / 60-63
C+ / 2.33 / 77-79 / F / 0.00 / < 60
OTHER REQUIREMENTS
Attendance:Students are expected to attend every class. More than 2 absences and/or substantially late arrivals will result in an automatic failure of the course.
Class Participation:The classroom is a forum for discussion where you will have the opportunity to exchange and explore ideas with the instructor and other students. Note that 10% of your grade is reserved for participation and attendance.
Classroom Policies:Cheating and Plagiarism. All forms of cheating and plagiarism are unacceptable and strictly forbidden at the University of Bridgeport. It should be understood that each student is responsible for his or her own work. If a student is caught cheating or claiming work that he or she did not do, said student will receive a grade of F for the course and be subject to further punitive measures that could result in suspension or expulsion. All sources of information used in producing coursework must be properly documented, as will be explained during the first class meeting.
Cell Phones and Pagers. Cell phones, pagers and other electronic devices are not allowed to be on in class as they are disruptive and annoying. You must turn off these devices or put them on a silent, pulsating mode. If you need to leave class to take a call, you must be as unobtrusive as possible.
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