Earl N. Phillips School of Business High Point University Fall, 2006 Day Course Syllabus
Course: FIN 333, Financial Management
Professor: Jim Wehrley
Email: [email protected] Webpage: http://www.highpoint.edu/~jwehrley Blackboard: http://blackboard.highpoint.edu Phone: (O) 841-4560 (H) 869-0042 Office: Cooke Hall 103/102 Office Hours: Monday: 1:30 - 2:00 Tuesday: 9:30 - 11:00 Wednesday: 1:30 – 2:00; 6:00 - 6:30 Thursday: 9:30 - 11:00 Friday: 9:30 - 10:30
While these are my official office hours, you are welcome to stop by my office at any time. If I am not immediately available, we can set up an appointment. Of course, you can also e-mail or call me.
General rules or guidelines to help you contact me: 1) During the work week, I try to respond to e-mails or voice mail messages within 1 1/2 hours of receiving them. Of course, I have meetings both on and off campus that will sometimes result in a slower response time. 2) My teaching schedule: M, W: 2:00 - 3:15; W: 6:30-9:30.
Please let me know how I can help!
Catalog Description:
A study of the principles of financing a business enterprise with special references to the modern corporation. Attention is given to the methods of acquiring permanent capital, administration of earnings, expansion, reorganization, and the problem of public control, the impact of taxation on corporate financing, and corporate responsibilities affecting the public interest.
Prerequisites: ACC 203: Introduction to Financial and Managerial Accounting
Texts: Brooks, L. FinGameONLINE 4.0 participant’s manual (Login and Password included)
Financial Management (Paperback) (2000) by Joel G. Siegel, Jae K. Shim, Barron’s, Second Edition. (Highly Recommended or other Financial Management Book)
1 Course Objectives:
Completion of this course will enable the student to describe and explain financial ratio analysis, cash budgets, stock and bond valuation, time value of money, and other key financial techniques used by financial managers in the modern business environment. Students must demonstrate knowledge of the material through practical application in the following ways:
1. Identify and explain the types of business organizations and the basics of corporate taxation;
2. Evaluate the performance of a firm by analyzing its financial statements and interpreting its financial ratios;
3. Demonstrate the ability to develop a statement of cash flows and interpret future financial needs of a company;
4. Demonstrate the ability to develop pro-forma income statements and balance sheets by using the percentage of sales method;
5. Demonstrate the ability to measure the market value and required rates of return for stocks and bonds;
6. Explain and use a hurdle rate (discount rate), NPV, IRR, and payback methods of project evaluation;
7. Identify the capital structure of a company and explain the tax consideration in developing a weighted cost of capital; and
8. In all applications of financial techniques, the student must demonstrate the ability to use manual models, business calculator, and computer spreadsheet design.
Honor Code:
The High Point University Honor Code expects all students to act in a manner so as not to infringe upon the rights and responsibilities of others. It is crucial to the development of a college student that one has the right to learn and prosper in a society free from fraudulence and dishonesty. It is the responsibility of each student to help maintain such a society.
The High Point University Honor Code affirms that:
Every student is honor bound to refrain from conduct which is unbecoming of a University student and that brings discredit to the student and/or High Point University.
2 Every student is honor bound to refrain from cheating. Every student is honor bound to refrain from collusion. Every student is honor bound to refrain from plagiarism. Every student has the right to report an Honor Code violation.
Full details of the High Point University Honor Code are found in the Student Handbook.
Course Teaching Methods:
You will also have to apply, practice, and use the material. If you are not actively working and applying, you probably are not learning. That is, the approach in this class emphasizes doing rather than passive observation.
Why is this course important?:
This course focuses on what a business person should know about finance. School of Business Advisory Board members have commented that finance courses have been some of the most useful and important courses for them in the business world. Members have commented on how vital it is to understand cash flow, P&L (Profit and Loss) statements (aka income statements), and balance sheets.
Just like you, companies need money. Companies that operate intelligently from a financial perspective increase the chance of prospering. Well run companies know how to allocate capital (money), analyze risk, raise money, and budget. Companies that are not well-run financially tend to exhibit stress throughout the organization.
Even if you do not expect to own a company, understanding how the company functions financially can help you in your job. Some examples: 1) If you are requesting an increase of 50% in a marketing budget as a marketing manager, can you explain the benefit in financial terms? 2) If you would like to order more inventory, can you justify it from a financial perspective? 3) If you would like a company car as part of your benefits package, do you know the cost to the firm?
With all these decisions, the people involved in approving your request are likely to understand the financial impact. If you understand their perspective, you can increase the chance of selling your ideas.
While this is not a personal finance class, understanding the concepts in this class can help you with your personal finances. If you hire a financial advisor, the knowledge gained in this class will help you understand your advisor.
3 Materials:
A "Business Financial Calculator" is needed for the material that starts with the Time- Value-of-Money and runs through Capital Budgeting. It must have these keys: PV FV PMT I% N. A good calculator will start at $20 (Texas Instrument, Hewlett Packard, etc.). I will be using the Texas Instruments BAII Plus.
Outside Reading Material:
Recommendations: The Wall Street Journal, Fortune, Forbes, Business Week and other business periodicals.
Grading Scale (in % format):
92 - 100 A 4.0 90 - <92 A- 3.7 88 - <90 B+ 3.3 82 - <88 B 3.0 80 - <82 B- 2.7 78 - <80 C+ 2.3 72 - <78 C 2.0 70 - <72 C- 1.7 68 - <70 D+ 1.3 62 - <68 D 1.0 60 - <62 D- 0.7 Below 60 F 0.0
Grading: Class Participation (Mandatory) 10% Financial Foundation Quiz 10% Financial Statement Analysis Quiz 10% Time Value of Money Basic Quiz 10% Time Value of Money Advanced Quiz 10% FinGame ONLINE 4.0 Performance (Mandatory) 10% FinGame ONLINE Assignments (Mandatory) 10% FinGame Presentation (Mandatory) 10% Final Exam – Comprehensive 20-60%* TOTAL 100%
* Determined by you (discussed in more detail later in the syllabus)
4 Class Participation (Mandatory) (10%)
Class participation will consist of a variety of activities performed in class including quizzes, assignments, group work, discussions of Wall Street Journal articles, etc. Part of your class participation grade will be a two minute presentation of a finance related current event. If you do not complete this presentation, your class participation grade will automatically be zero. Some of the class participation grade may involve discussions on Blackboard. Each activity is equally weighted.
Financial Foundation Quiz (10%) and Financial Statement Analysis Quiz (10%):
It is difficult to fully understand business and finance without an understanding of general business/accounting concepts. You will either pass (100%) or fail (0%) the Financial Foundation Quiz. To pass this quiz, you must answer all the questions correctly. The quizzes will emphasize understanding a balance sheet, income statement, and how the two are intertwined with each other.
The Financial Statement Analysis Quiz will focus on analyzing financial statements which includes ratio analysis.
There is a strong possibility that these two quizzes will occur during the same class period.
Time Value of Money Basic Quiz (10%) and Time Value of Money Advanced Quiz (10%):
It is very difficult to understand business and finance without an understanding of the basics of time value of money. You will either pass (100%) or fail (0%) the time value of money basic quiz. To pass this quiz, you must answer all questions correctly.
Many finance decisions are embedded in the concept of time value of money. The time value of money advanced quiz will include capital budgeting and valuation of stocks and bonds.
There is a strong possibility that these two quizzes will occur during the same class period.
FinGame ONLINE 4.0 Performance (p. 76) (Mandatory) (10%)
The top performer, in regards to accumulated wealth, will earn 100%. All other performers’ grades will be based as a percentage from the top performer. The instructor has the right to curve grades; however, at no time shall anyone earn greater than 100%.
5 FinGame ONLINE Assignments (Mandatory) (10%)
There will be a variety of assignments related to the simulation. These assignments could be both inside and outside class. Each assignment is equally weighted. I will drop the lowest grade. Each assignment will be equally weighted.
FinGame Presentation (Mandatory) (10%)
At the end of the simulation, each company team will present their results.
Final Exam – Comprehensive (20% - 60%):
This exam will consist of all topics discussed in class. You will be able to replace or substitute a prior grade; however, mandatory work cannot be replaced. Within the 20- 60% range, you determine the percentage of the final exam that will be applied to your final grade. You must make your decision before the final exam.
IMPORTANT: You DO NOT get to use the highest grade. Example: if you replace the Time Value of Money Advanced Quiz grade of 75% and you earn only 70% on the final exam, the 70% would be used in calculating your final grade. The final exam would count 30% (20% base plus 10% replacement of quiz) toward your final grade.
Attendance:
You are allowed two unexcused absences. An excused absence will be based on my judgment. My judgment will be based on whether a “typical” employer would view your reason for the absence to be acceptable. Generally, for an absence to be excused, I must be contacted (e.g., e-mail, voice mail) before the class period you miss. Clearly, in rare situations (e.g., automobile accident), an excused absence may be allowed when I am notified after the class period you miss.
Important Notes:
1. Work is due at the beginning of the class unless otherwise stated. Missing a class (excused or unexcused) is not a valid excuse for late work.
2. All work must be typed or word processed. All text must be double-spaced.
3. All work is expected to include correct grammar, punctuation, and spelling.
4. Late work will not be accepted for any reason. If you miss a quiz, you will have to replace it with the comprehensive exam grade.
6 Academic Services Center
Students with diagnosed disabilities should contact Ms. Ingersoll, Assistant Director & Coordinator of Disability Services: 841-9037 or [email protected]. Students who need classroom accommodations due to a diagnosed disability should contact Ms. Irene Ingersoll. Accommodation arrangements should be made at the beginning of the semester. Accommodations are not retroactive.
Tentative Schedule
Week 1, Aug 21 Chapter 1: Introduction Chapter 2: Understanding Financial Statements Chapter 1: Introduction (FG)
Week 2, Aug 28 Chapter 6: Understanding the Concept of Time Value of Money Chapter 2: Web Access and Use (FG)
Week 3, Sep. 4 Chapter 8: Valuing Stocks and Bonds Chapter 10: How to Make Capital Budgeting Decisions Chapter 3: Establishing a Management Plan (FG)
Week 4, Sep. 11 Chapter 3: Analyzing Financial Statements Chapter 5: Analyzing and Improving Management Performance Chapter 12: Using Working Capital Management Effectively Chapter 4: The Company Environment and Rules (FG)
Week 5, Sep. 18 Chapter 11: Leverage and Capital Structure Chapter 4: The Company Environment and Rules (cont’d) (FG)
Week 6, Sep. 25 Chapter 13: Short-Term and Intermediate-Term Financing Chapter 14: Long-Term Debt Financing Chapter 16: Dividend Policy
Week 7, Oct. 2 Prepare to make FinGame Decisions
Week 8, Oct. 9 FinGame Quarter 2 Due
OCTOBER 16 FALL BREAK
Week 9, Oct. 23 FinGame Quarter 3 Due
Week 10, Oct. 30 Computer Lab: Analyzing a Company FinGame Quarter 4 Due
Week 11, Nov. 6 Chapter 4: Financial Forecasting and Budgeting FinGame Quarter 5 Due
7 Week 12, Nov. 13 Chapter 5: The Game and the Real World (FG) FinGame Quarter 6 Due
Week 13, Nov. 20 TBA – Thanksgiving Break FinGame Quarter 7 Due
Week 14, Nov. 27 TBA FinGame Quarter 8 Due Chapter 19: International Finance
Week 15, Dec. 4 Review/FinGame Presentations
Final Exam Period Final Exam – Comprehensive AND Final Quiz Tuesday, December 12, 2006 @ 1:30 p.m. Wed., December 13, 2006 @ 6:30 p.m. Friday, December 15, 2006 @ 1:30 p.m.
I'm glad you registered for FIN333. I hope you enjoy the course!!!! Always remember, Finance is Fun!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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