Financial Management s2

FINANCIAL MANAGEMENT FIN 4431 TRAA Spring Semester 2013

Instructor: Dr. Wilfred J. Bibbins Course Fin 4437 Prerequisites: Fin 4432

Office Hours T/Th 8:00am – 8:25am 9:50am - 11:25am 2:20pm - 5:20pm

Office Location: Bibb-Graves 108B

Office Telephone: 334-670-3509 334-670-3143 Secretary 334-670-3599 FAX

Email: [email protected]

Time of Class: 11:30am to 12:45pm T/TH

Class Location: BG 143

Course Description: Review of financial management tools and techniques to solve current problems in finance using a case analysis approach.

Course Objectives: Upon completion of the course, the student should:

o financial ratios - understand their interrelationships and how they are usefulness in financial analysis; o be knowledgeable of the functions and responsibilities of the financial manager; o understand the time value of money concepts (present and future value); o be knowledgeable of risk and return concepts from the viewpoint of an individual asset and a portfolio; o be able to forecast the additional financing needed to support corporate growth; o understand the process of preparing a cash budget; o knowledgeable of the significance of working capital policy and the approaches to working capital policy management; o significance and criteria for a cash management policy; o significance and criteria for a marketable securities portfolio; o significance and criteria for a inventory management; o have a basic overview of the capital budgeting process; and, o knowledgeable of short term sources of financing for Corporate America; o Understand the process of valuing common stock, preferred stock and debt; o Be able to forecast and evaluate the cash flows generated within a capital budgeting framework; o Be able to estimate and determine the significance of a firm’s cost of capital; o Understand the significance and implications of capital structure and leverage; o Understand the implications of dividend policy; o Understanding the interrelationships between investment, financing, and dividend decisions; o Know the characteristics of common stock and debt financing and how investment bankers facilitate their distribution to investors; o Be familiar with the process of corporate bankruptcy and reorganization; o Be able to determine whether or not a bond should be refunded; o Know the characteristics of different types of leases; and o Be knowledgeable of the factors influencing corporate divestitures and leverage buyouts. 2

Text(s): Cases in Finance - Custom Published.

Other Materials: You are encouraged to read the Wall Street Journal and Business Week regularly (subscriptions are optional). We will discuss articles from these sources throughout the semester. You are encouraged to bring to class any information discovered from reading these publications. Please note that these are not the only sources of information available (e.g., Forbes or the Internet.).

Grading Methods: Exams 20% of final grade Analyst Presentation 40% of final grade Participation/Assignments 20% of final grade Discussant Evaluation 10% of final grade Finance Capstone Examination 10% of final grade

GRADE PERCENTAGE REQUIREMENT A 100 - 89% B 88 - 77% C 76 - 64% D 63 - 50% F 49 - 0%

HOMEWORK (ASSIGNMENT) POLICY: 1. Announced required assignments will count toward your final grade. To be considered on time they must be handed in at the beginning of class. Any point after class begins the assignment is considered late. a. The penalty for a late assignment is 10 points the first day and 2 points each additional day. b. If you are unable to attend class on an assignment due date, the homework must still be handed in during class. You may turn in the assignment early or someone may turn in the assignment for you during class. 2. Homework assignments will be announced during the semester.

TEST POLICY: There will be at least 2 exams during the semester. The material covered on the exams will be taken from the case discussions and additional topics discussed. The exams are given during regular class periods and may consist of problems, essay and/or multiple-choice questions. Make-up exams will be given only for documented (on letterhead), approved absences. See ATTENDANCE POLICY. Make up exams are administered only to students who have received approval from the professor prior to the test date. Make-ups maybe different from exams given in class. A grade of zero will be assigned for an exam missed due to an unexcused absence.

Individual exam may be curved (points added.) However, if you have been absent 2 times since the previous exam you WILL NOT receive the additional points. This is a non-negotiable situation.

Exams will not be returned in class. You may come by the office to review your exam. You have one week from the date the exam results are announced to review and/or questioning the grading the exam.

Test dates will be announced at least one week prior to the exam date.

Mid-term Grade In accordance with University policy, mid-term grades will be reported for each student. Policy 3

Class Procedure and There are NO social promotions! You must earn a passing grade by meeting course objectives. Requirements: Faithful attendance, a pure heart, noble intentions, curly hair, blue eyes, etc. -- without genuine achievement -- will not enable you to pass the course. Examinations, assignments, and quizzes will be the criteria for grades.

The approach used will be group presentation and classroom lecture covering concepts and problem solving technique(s). Class participation is strongly encouraged as I believe participation is essential for this course to be interesting and for students to get the maximum benefit from the course. If you have a question, ask it! It will likely benefit us all.

The student will be expected to attend scheduled class meetings, complete reading and problem assignments prior to class.

COURSE CONTENT:

Please check Blackboard Course Content for a list of cases we will dicuss during the term.

CLASSROOM ADMINISTRATION Students are expected to: 1. Punctually attend all scheduled classes. Students who arrive after class begins will be counted absent. See attendance policy. 2. Be responsible for all instructions and assignments given in class. 3. Read and analyze the cases before class. This leads to a better understanding of the case presentation as well as the opportunity to ask questions about the presenting group’s analysis. 4. Hand in assignments on the assigned due date during class. See homework policy. 5. Not wear hats or sunglasses in the classroom.

Course Outline COURSE OUTLINE: The following constitute the requirements for the course:

I. CASE STUDIES - CLASS PRESENTER: Case studies allow students to see the importance of finance in actual business decisions. For many of you, the cases will help transform finance from a sterile, mechanical, and theoretical subject into an interesting pragmatic one. Case presentations are utilized to help you sharpen your written and oral presentation skills. Executives consistently state that being able to communicate is absolutely critical to success in business. Knowledge of finance is useless unless you can communicate your ideas to others.

The presenting analyst(s) MUST submit a copy of the analysis one class before the presentation. There will be NO EXCUSES for turning-in this assignment late!! 4

MANAGEMENT: Almost all decision-making in business is done in a group environment, and people who cannot work effectively within a group are doomed to failure. Thus, group work teams will be organized to analyze the cases.

Each team is required to turn-in a hand-written outline format analysis of each case. You can have any reasonable number of exhibit pages. Grades will be assigned on the basis of both form and substance. Reports will be read and analyzed in the same manner that managers in the work force study and evaluate similar papers.

Excel has become extremely important in all aspects of finance, especially in financial management. I will provide Excel templates to assist in doing some of the financial computations. The analysis could, of course, be done with a hand calculator, but the spreadsheet (templates) models are far more efficient. All of the cases to be assigned are on Excel and are partially completed.

II. CASE STUDIES - CLASS DISCUSSANTS: As the management team of the company, you will be required to evaluate the analysis of the presenter. For purposes of the analysis, you are to assume that your group will analyze the facts, substance and correctness of the presenter. You may ask the presenter any question(s) regarding the subject matter of the case.

The discussant group(s) has the opportunity to earn points from the presenter. This is achieved by identifying and correcting erroneous material in the presentation. The instructor will determine the transfer of points.

As you prepare to develop the case analysis, please review the following suggestions: - Everyone should read the case thoroughly before the first group meeting. In the group meeting, a plan should be worked out for analyzing the case. - The work can be divided up, but is important for everyone to realize that the grade given on the case is a TEAM grade. If someone does a poor job for whatever reason on any part of the case, then the group's grade will be pulled down. - The group should discuss each question before finalizing the substance of the answer and everyone should read a draft of the case before it is finalized. - Reports should be prepared in an outline format - hand written.

III. CLASS PARTICIPATION Class participation is vitally important. You are expected to attend each meeting and to participate in the discussion. As the analyst makes the presentation, the remainder of the class is assumed to be the top management of the firm (previous section). As such, you will be expected to ask probing questions about the presentation. A portion of your grade will be determined by your participation. YOU MUST ATTEND AND PARTICIPATE IN CLASS!

General Supports: The computer labs in Bibb-Graves are available for student use.

Daily Assignment Assignments will be announced in class on Friday for the following week.

Dates to Remember: First day of class: January 9 Last day to drop without Financial Penalty January 17 Martin Luther King , Jr. Holiday January 21 Spring Break March 11-17 Last day to Drop – No Drops after this date March 28 Classes end April 30 Dead Day May 1

Final Examination Tuesday May 7 (2:00pm – 4:00pm . 5

Additional Services: AMERICANS WITH DISABILITIES ACT: Any student whose disabilities fall within ADA must inform the instructor at the beginning of the term of any special needs or equipment necessary to accomplish the requirements for this course. Students who have or may be dealing with a disability or learning difficulty should speak with the instructor, contact the Office of Adaptive Needs Program (Wright 226), or call 670-3220/3221. Various accommodations are available through the Adaptive Needs Program. The faculty in the School of Business makes every effort to accommodate unique and special needs of students with respect to speech, hearing, vision, seating, or other possible disabling conditions. Please notify the instructor as soon as possible of requested accommodations or ways to help.

Attendance Policy: 1. Class Roll: Class roll will be taken at the beginning of the class session. Students who arrive after their name is called will be marked absent. 2. Attendance is mandatory. If a student misses a class it is his/her responsibility to obtain all information and materials presented (including materials covered, handouts, skills learned, and homework assignments) during his/her absence. I do not repeat lectures nor perform the tutoring function for students who are absent. Each absence will make the successful completion of this course more difficult since finance courses are cumulative in nature and days missed from class are lost knowledge. Exams will include not only the material from the assigned chapters in the text, but also from any other materials covered in class lectures. 3. Excused absences: Excused absences have the following characteristics: a. Professor was informed prior to the absence. b. Excused absence are as follows: 1. Participation in a documented official university function that does not permit the student’s class attendance (e.g., participation in athletic events, field trips, etc.) 2. Severe illness: A hospital stay, or a doctor's excuse saying that it is impossible for student to attend class(es). Please note, this does not include scheduled medical appointments nor driving someone else to doctor.

3. Death of immediate family member (grandparent, parent, sibling, or child) 4. Appearance in court c. Personal situations that are approved by the professor in advance of the time the student will to be absent. d. Written documentation (on letterhead) must be provided for all excuse absences.

Incomplete Work Any incomplete work at the end of the term will not be accepted unless the student can provide Policy: acceptable and clear documentation prior to grades being submitted to the Registrar.

Cheating Policy: If you are caught cheating, you will receive a course grade of "F

Plagiarism is the act of stealing and passing off (the ideas or words of another) as one’s own or to commit literary theft: present as new and original an idea or product derived from an existing source (Webster’s New Collegiate Dictionary). Plagiarism will cause a student to get a course grade of “F”. According to the TSU ORACLE: Student Handbook, 1998-99, pp. 52, one definition of misconduct is: “Dishonesty, such as cheating, plagiarism...”. The ORACLE states on pp. 56 under the Academic Code sub-heading that: “A student is subject to disciplinary action: #3. Where the work affects or might affect a student’s grade, credit, or status in the university, a student represents to be his or her own any work which is not the product of his or her own study and efforts”. The penalty for such misconduct may be (pp. 56) “A student’s grade in the course or on the examination affected by the misconduct may be reduced to any extent, including a reduction to failure.” A student may be suspended from the university for a specific or an indefinite period. p. 56-57.