Engineering Management 452

Advanced Financial Management

August 26 – Dec. 11, 2003

Tuesdays. & Thursdays 11:00am - 12:15 pm

Engineering Management 103

Goals:

Understand the financial functions of enterprises so that the students can:

  • Understand, appreciate, and use financial models, tools, terminology and processes, including financial statements, the time value of money and capital budgeting;
  • Understand the various financial options available to firms;
  • Gain new strategic and financial perspectives;
  • Utilize financial information for analysis, planning and decision making;
  • Improve business communication skills.

Understand the financial structure of the U.S. society so that the students can:

  • Make informed personal and business financial decisions, such as lease vs. loan decisions and investment;
  • Understand and appreciate the current industrial environment with regards to financial practices and competitive pressures.

Instructor

Hal Nystrom,Associate Professor of Engineering Management

202 Engineering Management Dept.

(573) 341-4624

office hours: Mondays 2 – 2:30 pm, Thursdays 12:30 - 1:00 pm

and by appointment.

Resources

Financial Management, Theory and Practice, Brigham & Ehrhardt,

Tenth Edition, 2001.

Blackboarde-learning software platform at (

Financial calculatorcapable of calculating NPV and IRR required.

Grading

Group Project35%
Exams - two closed book exams20%

Final exam 20%

Current events presentation10%

Quizzes (on-line) 5%

Homework and class participation10%

Total 100%

Group Project

Each team will select, research and present (status report and final presentation) a project that could include one of the following (as examples):

  • a financial in-depth analysis of a firm and its relative performance in its industry with a specific analysis objective, such as recommend a stock to purchase;
  • a financial analysis of a real car purchase vs. lease option;
  • application of valuation models for actual bonds or stocks; or
  • other applications of the financial material covered in class.

Current Event Presentation

Student teams will make a class presentation and written report primarily based on a current event with some additional research in which:

  • major financial or economic issues are highlighted,
  • the application of issues covered in class is explained, and
  • the report is informative and interesting.

Exams

The exams are designed to encourage the students to give proper attention to the concepts presented in the text and lectures, integrate the various topics covered in class, and allow individual students to display their mastery of these topics. The two fifty minute tests will be closed book but you will be able to take with you one page of notes into the first exam, two pages into the second exam, and three pages into the final ninety minute exam. They will include multiple-choice questions, similar to those in the quizzes, some problems and a discussion question.

Homework

Some of these skills are only developed through practice. Homework assignments will provide the opportunity for the practice, an indication of what would be covered in exams, and material for in-class discussions. Most will not be collected or graded, but a few will be submitted, but not graded. Their purpose is for you to learn from them and you can learn even if you get the wrong answer. They are also intended to enhance class discussions.

Quizzes (readiness tests)

Short true-false or multiple-choice questions will be answered in class quizzes. These questions will cover the major issues presented in the text, or other material assigned. These tests will be taken and graded on-line. The intent is to motivate you to prepare for class and to give you practice with one type of question that will be in the tests. Approximately 10% of the lowest scores will be dropped.

Extra Credit – Toastmasters

To improve your public speaking skills, you can earn extra credit from membership and active participation in Toastmasters or similar current experience (1% per speech with 3% maximum credit).

Useful web sites

(This is a great tutorial document on "Guide to Financials". This is great for you if you do not have accounting experience.)

(This focuses on the balance sheet, it is less thorough, but might be more readable.)

(EDGAR is SEC’s free source to financial reports of all publicly traded corporations and it's good.)
(ValuelineUniversity, nice basic lessons)

(Don't worry about the debits and credits)

(This one is a bit above our level, but parts of it are useful.)

(Includes many useful financial resources including EDGAR Corporate SEC filings.)

Class Schedule

Class / Date / Topics covered / Chapters / Homework
1 / 8/26 / Introduction to the class
2 / 8/28 / Overview of Financial Management / Ch. 1 / e-mail/ personal B/S
3 / 9/2 / Financial Statements / Ch. 2 / Microdrive
4 / 9/4 / Applied Accounting / Rolla Consulting / pick stock
5 / 9/9 / Financial Reports / Mini2 (e-j, l & n)
6 / 9/11 / Financial Analysis / Ch. 3
7 / 9/16 / Review for test 1 / Mini3 (b-g, l & m)
8 / 9/18 / Test 1
9 / 9/23 / Financial Planning / Ch. 4 / Pick a team
10 / 9/25 / Markets, Institutions, interest rates, taxes / Ch. 5 / Mini4 (a-d, f & g)
11 / 9/30 / Risk and Return / Ch. 6 / Yield curve
12 / 10/2 / Time Value of Money / Ch. 8 / 6ST 1,2
13 / 10/7 / Bond valuation / Ch 9 / 8ST 1-3/ Nissan
14 / 10/9 / Stock Valuation / Ch 10 / 9ST 1(a-e)
15 / 10/14 / Cost of Capital / Ch. 11 / Mini10 (c-g & j)
16 / 10/16 / Team project preparation
17 / 10/21 / Review / 11ST 1
18 / 10/23 / Test 2
19 / 10/28 / Capital Budget / Ch. 13
20 / 10/30 / Team Project Status Reports
21 / 11/4 / Cash flow / Ch. 14 / 13 ST 1
22 / 11/6 / Capital Structure / Ch. 16 / 14ST 1, 2
23 / 11/11 / Guest speaker
24 / 11/13 / IPOs / Ch. 19 / Special / 16 ST 1
25 / 11/18 / Current Asset Management / Ch. 22 / Mini 19 (a-l)
26 / 11/20 / Short Term Financing / Ch. 23 / 22 ST 1-2
27 / 11/25 / Team project preparation / 23ST 1 / 23-2
28 / 11/27 / Thanksgiving, no classes
29 / 12/2 / Final Project Presentations
30 / 12/4 / Final Project Presentations
31 / 12/9 / Class Overview / Written reports due
32 / 12/11 / Exam preparation
12/19 / Final Exam (8 a.m.- 10 a.m.)

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