GREAT BASINCOLLEGE
COURSE SYLLABUS
FIN 405-All IAV Sections: CASE PROBLEMS IN MANAGERIAL FINANCE
Instructor:Dr. Glen Tenney (
Office:GTA 102 (775-753-2203)
Office Hours:4:00 – 5:20 p.m., Monday through Thursday, or by appointment
E-mail:
Sections:Elko, Winnemucca, Ely, BattleMountain
Semester:Fall 2006
Class Meetings:Mondays and Wednesdays, 5:30 – 6:45 p.m.
Wisdom teaches what is right in matters
of life and conduct. It guides and supports
us better than all other possessions.
Hans Sennholz
EDUCATIONAL BELIEFS
Humanity is uniquely characterized by its ability, responsibility, and even necessity, to make judicious use of reason. Society acts wisely when it fosters the cultivation of reason in its members. Most people do not live by their own stock of reason because it may be rather small. They do well availing themselves of the general bank of reason which may be available on all levels of education. Formal education is a conscious, organized effort to impart in individuals the attitude, qualities and characteristics that will enhance and encourage the use of reason.
CATALOG DESCRIPTION
Analysis of financial problems encountered by various types of business organizations using a case-study approach. Topics include interpreting financial statements, evaluation of financial performance, financial forecasting, growth management, financial instruments and markets, risk analysis, business valuation, and capital budgeting. Prerequisite: FIN 310 (formerly FIN 322).
COURSE OBJECTIVES & EXPECTED STUDENT OUTCOMES
While maximization of shareholder wealth (within the moral constraints of ordinary decency) as measured or indicated in broad terms by equity prices in a competitive capital market is understood to be the overriding goal for financial managers, the course has major objectives in three broad categories, or areas of emphasis, stemming from this goal. The table below connects these three objective areas with 12 specific student outcomes that follow.
Broad Categories / Specific Student Outcomes from list BelowProfitability / 1, 3, 8, 10
Liquidity / 1, 3, 4, 5, 7,
Risk / 1, 2, 5, 6, 9, 10, 11
Upon completion of the course, the student will be able to:
1. Calculate various financial ratios, and use them in determining borrowing capacity.
2.Work with time value of money concepts, and comprehend the relationships pertaining to risk and time.
3.Create and use pro-forma financial statements to determine the financial prospects of a business enterprise.
4.Forecast cash needs for a firm, based upon numerous real-life constraints.
5.Understand the characteristics of competing short-term borrowing sources and short-term investment opportunities.
6.Determine long-term financial needs, and understand the differences between various options among long-term debt and equity alternatives.
7.Evaluate and assess credit policies as they relate to short-term liquidity needs.
8.Utilize NPV and IRR techniques to evaluate competing capital budgeting problems under various scenarios.
9.Incorporate risk into capital budgeting decisions in reasonable ways.
10.Place values on equity securities based upon various financial models.
11.Work with the concept of leverage in both the operational sense and the financial sense, and understand how a firm can optimize fixed costs in order to adjust the risk level inherent in the operations and financing of a firm.
ASSESSMENT OF OUTCOMES
Thestudent outcomes listed above will be measured by students’ specific performance on the case presentations and on periodic exams. In addition, this course is a component of the baccalaureate programs at GBC that assess the competencies and progress of students at the program level upon entrance and graduation.
SCHEDULE OF CASES
MondayAug 28Introduction and Overview of Course
Scheduling of Cases
WednesdayAug 30Case 1: KHF Corporation
MondaySept 4Holiday – No Class Meeting
WednesdaySept 6Case 1A: Triple A Office Mart
MondaySept 11Case 2: Community GeneralHospital
WednesdaySept 13Case 3: Bill Thurmond Pig Farm
MondaySept 18Case 4: Retirement Planning: Robert & Linda Trudeau
WednesdaySept 20Case 4A: Retirement Planning, Inc.
MondaySept 25Case 5: Pearson Corporation
WednesdaySept 27Case 6: Simplified Networking, Incorporated
MondayOct 2Case 6A: High Rock Industries
WednesdayOct 4Case 7A: Performance Cycle, Inc.
MondayOct 9Case 8: Fred Alberts, Rookie
WednesdayOct 11Case 8A: Burkeville Power and Light
MondayOct 16Case 9: Performance boating Products, Inc.
WednesdayOct 18Midterm Exam
MondayOct 23Case 10: Bentley Custom Ceramics
WednesdayOct 25Case 13: Automotive Specialties, Inc.
MondayOct 30Case 14: Gilad Publishing Company
WednesdayNov 1Case 17: Puredell Distribution, Inc.
MondayNov 6Case 17A: Babe-N-Toyland
WednesdayNov 8Case 18: NCI Corporation
MondayNov 13Case 18A: Bison Tool Corporation
WednesdayNov 15Case 18B: Ohio Rubber Works
MondayNov 20Case 19: McGhee Corporation
WednesdayNov 22Case 21: Roth Financial Advisors
MondayNov 27Case 22: Sound Advice
WednesdayNov 29Case 23: Risky Business
MondayDec 4Case 24: Custom Lumber, Inc.
WednesdayDec 6Case 25: Jonesville Candy Company
MondayDec 11Case 25A: Pop’s Recycling Company
WednesdayDec 13Final Exam
METHODS OF INSTRUCTION
Each regular class meeting will consist primarily of students making individual presentations of financial cases to the class. In making these presentations, students will be provided with guidelines as to how to proceed. While each assigned case will be different in detail, the objective of every class meeting is to review, reinforce, and apply the financial principles that are brought to bear in the specific case under consideration. These principles, with few exceptions, are principles that have been learned in prior courses.
After each presentation is made, all students will be given a few minutes to evaluate the presentation by completing a form that addresses several areas of competency that the presenter should exemplify. This student evaluation will constitute half of the grade (50 points) for the presentation. The professor will also evaluate each presentation—his evaluation also constituting half (50 points) of the grade. Students not presenting a case on a given day should be prepared to challenge any or all of the concepts, calculations, or conclusions made by the presenter of each case.
The cases covered are designed to provide students with something close to real-life situations. Thus students are encouraged to develop sound arguments in the situations provided even in the face of information that is sometimes incomplete. Good analysis using the proper tools of financial management is generally considered to be more important than assertiveness in expressing one’s unsupported opinion. Students are, of course, encouraged to temper their financial considerations, in each case—to the extent deemed desirable—with non-financial management, marketing, accounting, or ethical theory and practice as well. The class time allotted to each case will be approximately 1 hour.
EVALUATION & GRADES
Passing grades for the course will range from A to D, and will be determined based on the student's performance on the case presentations, on the exams, and on overall class participation. The relative importance of each of these items is demonstrated below with the use of a point scale.
5 Case Presentations @ 100 points each 500
2 Exams @ 100 points each 200
28 Attendance and Participation grades @ 3.57 points each 100 -----
Total points possible 800 ===
For the attendance/participation portion of the grade, students who are not able to attend a class meeting are required to turn in a written report on the case that is scheduled to be covered on that day. This written report will be due on the following class meeting. If no written report on the case is turned in, then the student will get zero attendance/participation points for that day.
MATERIALS
Textbooks:
Cases in Financial Management, by Robert Stretcher and Timothy Michael, published by Prentice Hall. ISBN: 0-13-148343-9
Analysis for Financial Management, seventh edition, by Robert Higgins, published by Irwin McGraw-Hill. (Any good financial analysis or reference book will substitute nicely for this book.)
Students should also have access to a good financial calculator and an electronic spreadsheet program.
SUPPLEMENTARY READING
Although there is no outside reading required for this course, the student will find The Wall Street Journal a very readable daily publication with general applicability to this course.
Note: The instructor reserves the right to change certain aspects of the course syllabus, such as the schedule, grading procedures, or materials. However, no changes will be made without informing class members in a timely and clear manner. It is not anticipated that there will be major changes in the content of this syllabus.
Guidelines for In-class Presentations
While each of the presentations will be different with respect to content, consideration should be given to the following points in preparing the presentations. A typed report containing the important aspects of the presentation should also be prepared and handed in at the time the presentation is made to the class. (This written report should be of presentation quality rather than a simple printout of PowerPoint slides.)
Preliminary Matters:
- Explanation of the descriptive information for the company.
- Discussion of the general characteristics of the industry.
- Review of pertinent accounting, economic, or financial principles that pertain to the case.
Detailed Company Analysis:
- Hand out and discuss the quantitative materials. These materials should be prepared and copied prior to the class meeting.
- Explain how the various calculations and analyses were made – including the theory behind the calculations.
- Answer the questions from the textbook for the case.
- Explain how the various calculations and analyses were made – including the theory behind the calculations.
- Pose, and attempt to answer, any further questions that are not asked by the authors of the case.
Conclusions & Review:
- What can we learn from this case?
- What are the major principles involved?
Questions:
- Ask for questions that the rest of the class might have about your procedures or conclusions.
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