Finc620 Finanical Management (Graduate level) Research paper

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Sneden Graduate School

Financial Management Syllabus Part II

FINC620 Financial Management Credit Hours: 3

Pre-requisites: FINC510

Type of Course: Core

Instructor’s contact information:

Financial Management

Course Description

This course focuses on the application of financial theory and concepts for management decision making with emphasis on the practical aspects of finance. Students learn how to analyze a company’s financial information and practice financial planning. Students evaluate the capital investment process, the corporate restructuring process, as well as bankruptcy analysis. In addition, students explore the financial decision-making process relating to working capital management and international finance. Prerequisite: FINC 510

Learning Outcomes

Upon successful completion of this course, the student will be able to:

1. Evaluate corporate restructuring, expansion through mergers and acquisitions, distress restructuring, and bankruptcy prediction models in relation to financial planning.

2. Analyze the financial flows of a company and forecast the consequences of various decisions and alternatives.

3. Examine the process of managing working capital by exploring the relationships between short term assets and liabilities, as well as the cash and operating cycles.

4. Evaluate a company for the purpose of investment, acquisition, or as a management performance measure using techniques such as ratio analysis.

5. Assess the capital investment process, including cost of capital calculation, project cash flow estimation, and decision rules.

6. Apply the concepts of international finance and the effect of exchange rate risk on global financial management.

Required Textbooks and Additional Materials:

9781260049435

Connect Access Card for Finance: Applications and Theory

Cornett

4th Edition / McGraw Hill

Required

Connect - Use of LearnSmart/

What is LearnSmart?

LearnSmart Advantage is the new series of adaptive learning products fueled by LearnSmart – the most widely used adaptive learning resource that is designed to maximize productivity and efficiency in learning. This suite spans the entire learning process – from course prep to concept mastery –  and it creates high impact study sessions that focus students on the concepts that they need to learn.  The LearnSmart Advantage suite does this by ensuring that each student is deliberately practicing the concepts that they need to learn or are struggling with, and identifying and bringing back the content that the student is most likely to forget. 

Textbook and Technology Policy

It is the responsibility of students to be prepared for class which means they should have all required course materials and texts at the start of class as well as reliable access to required technology tools and the internet for the duration of the course.

In extreme situations, where there is delay in the shipping or procurement of materials, faculty will make reasonable accommodations during the first week of class only. (See course syllabus for details.) All students must have textbooks by Week 1 Day 7. No exceptions and no accommodations will be made by faculty after this date. The only exception to this policy is the backorder of texts from the University supplier MBS as notified directly from MBS to Davenport University.

Due to copyright laws sections of the text, other than materials authorized by the publisher such as power points, problem solutions, etc, cannot be scanned and posted to the classroom or emailed by either the faculty or students.

Similarly, DU does not accept individual technology issues or internet access as a reason for late work in online classes. Be sure to have a back-up plan in case of unexpected glitches, viruses or inaccessibility. Libraries, college campuses, Kinkos, friends and family are frequently used alternatives. Additionally, work must be submitted on time and as directed in the course instructions using Microsoft Office software version 2000 or higher. Work submitted in other formats such as Word Perfect or Open Office will not be accepted.

Alternative Delivery Statement

Alternative delivery formats require considerably more student time outside of class and maintain the same level of assignments and academic rigor as the traditional classroom format.

MBA Policy Assignment Extensions

· It is the responsibility of students to complete all course assignments on time in accordance with the Course Calendar and Late Assignment Policies outlined in a faculty’s syllabus.

· In extreme situations where there is a scheduled professional or educational conflict that inhibits the student’s ability to complete an assignment by the deadline, only written contact with the faculty one (1) week prior to the assignment deadline will be considered appropriate for deadline extension. Faculty must confirm in writing their receipt of the request for extension.

No extension will be granted for Discussion Board participation or for the final assignment/exam.

MBA Final Assessment Policy

The Master of Business Administration classes (ACCT, BUSN, FINC, HCMG, HRMG, MGMT, MKTG and MAPH) require a grade of C or better on the final assessment in the class in order to earn a passing grade in the course. This requirement must be met by all students completing these courses regardless of degree or program (excluding the Executive MBA students).

Instructor’s Policies

Late Policy 

Assignments submitted after the due date will not receive full credit.  No credit will be given for Forum Peer Responses posted after the due date.  No credit will be given for exams or quizzes after the due date.

Late points for assignments will be deducted as follows:

Late points will be deducted as follows:

One day: minus 10%

Two days: minus 15%

Three days: minus 25%

Four Days: No credit

The brevity and accelerated nature of our online learning environment does not allow for ‘extra credit’ assignments. Please do not ask for what I cannot accommodate. If you are having an issue turning an assignment in on time, please communicate with me so we can work through your issues together.

Reservation Statement

The instructor reserves the right to make adjustments to this syllabus as needed.

Methodologies

The methodologies used throughout the course will include discussion, case studies, written homework assignments, article reviews, and library use to complete the assessments identified in the course grade determination.

Standardized University Grading Scale for the Maine School of Business

The following grading scale is determined by the university and is used to determine final course grades in all business courses.   

Standardized Grading Scale

 

A	100 – 94
A-	93 – 90
B+	89 – 87
B	86 – 83
B-	82 – 80
C+	79 – 77
C	76 – 73
F	72 – 0

The lowest passing grade in a course is “C.”

Course Grade Determination

Total Points Possible:  1000 

Overall course grade determination is allocated as follows: 

Assignment	Points	%
Forum Topic Response 7 weeks @ 30 points	210	21
Forum Discussion 15 points/week	105	10
Weekly Homework Assignments 6 weeks @ 35 points	210	21
Research Paper (Course Final Assessment)	240	24
LearnSmart Reflection Week 7	35	3.5
Comprehensive Final Exam	200	20
Total	1000	100%

 

Course Schedule and Assignments

Week 1	Corporate Finance Overview and Financial Statements Chapter 2 – Reviewing Financial Statements Chapter 3 – Analyzing Financial Statements	-Day 2 – Post forum topic response -Day 3 – Begin posting forum discussion comments -By day 7 - Complete Homework Assignment -Select target and benchmark companies for research paper
Week 2	Valuing of Future Cash Flows and Bonds Chapters 4 – Time Value of Money Chapter 5 – Time Value of Money Chapter 7 – Valuing Bonds	-Day 2 – Post forum topic response -Day 3 – Begin posting forum discussion comments -By day 7 - Complete Homework Assignment -Continue research paper
Week 3	Valuing of Stocks and Capital Budgeting Chapter 8 – Valuing Stocks Chapter 11- Calculating the Cost of Capital	-Day 2 – Post forum topic response -Day 3 – Begin posting forum discussion comments -By day 7 - Complete Homework Assignment -Continue working on research paper
Week 4	Capital Budgeting Chapter 12 – Estimating Cash Flows on Capital Budgeting Projects Chapter 13 – Weighing Net Present Value and Other	-Day 2 – Post forum topic response -Day 3 – Begin posting forum discussion comments -By day 7 - Complete Homework Assignment -Continue working on research paper
Week 5	Working Capital Management and Financial Planning Chapter 14 – Working Capital Management Policies Chapter 15 – Financial Planning and Forecasting	-Day 2 – Post forum topic response -Day 3 – Begin posting forum discussion comments -By day 7 - Complete Homework Assignment -Research paper draft should be complete or nearing completion
Week 6	Capital Structure Issues and Other Topics in Finance Chapter 16 – Assessing Long-Term Debt, Equity, and Capital Structure Chapter 19 – International Corporate Finance	-Day 2 – Post forum topic response -Day 3 – Begin posting forum discussion comments -By day 7 - Complete Homework Assignment -Day 7 – Submit completed research paper.
Week 7	Other Topics in Finance Chapter 20 – Mergers and Acquisitions and Financial Distress	-Day 2 – Post forum topic response -Day 3 – Begin posting forum discussion comments -Day 5 – Final exam due -By day 5 – Compose/post Learn Smart reflection

Assignment Descriptions

The five course grading dimensions are discussed and described:

1.) Forum Topic Responses and Forum Discussion (315 points)

One comprehensive forum topic is assigned weekly. Students are required to research the forum topic, using a minimum of 2 reference sources in addition to text book, and then compile a 500-word response to the forum topic no later than Day 2 of the week.

Comprehensive, forum topic response contributions will be critically graded on the thought quality of the response, work effort, research, and analysis.

Forum topic response contributions will be critically graded on the thought quality of the response, work effort, research, and analysis.

Forum topic responses are worth 30 points for week 1 - 7.

FINC 620 Forum Topic Response Grading Rubric

	Missing	Needs Development	Good	Excellent
Idea Development	None. Nothing new added to forum, only support for previous topic responses. (0 points)	Some new insight, but not supported examples. Response includes one secondary resource to support response. (5-6 points)	Well developed ideas. Introduced new idea(s)/perspectives. Response includes two secondary resources to support response. (7-8 points)	Well developed ideas. Introduced new ideas/perspective. Supported idea(s) with new example(s). Includes at least two secondary resources to support response. (Class Textbook, Wiki, and ~pedia websites do NOT qualify as a secondary resource) (8-10 points)
Critical Thinking	Does not attempt to analyze key issues, problems and questions. (0 points)	Attempts to analyze key issues, problems and questions. Analysis uses facts or theory incorrectly. (4-5 points)	Addresses key issues, problems and questions. Generally accurate, but may rely too much on facts and not clearly apply to discussion question. (5-6 points)	Clearly addresses key issues, problems and questions. May include unique insight. (7-10 points)
Context	More than 5 errors in grammar, punctuation, spelling and/or APA requirements (0 points)	3-4 errors in grammar, punctuation, spelling and/or APA requirements. (4-5 points)	1-2 errors in grammar, punctuation, spelling and/or APA requirements. Meets minimum length. (5-6 points)	Free of errors in grammar, punctuation, and spelling. Proper format and meets APA requirements. Meets or exceeds minimum length. (7-10 points)

Students are also expected to actively participate in the in the discussion forum. Weekly, students are required to log in a minimum of 3 separate days, beginning no later than Day 3. A minimum of 2 substantive participation posts (150-250 words) is required to earn full participation points.

Thus, a minimum of 3 posts are required weekly: the forum topic response, plus 2 participation posts [comments to other students]. Complying with the minimum posting requirement will not earn maximum credit.

Forum discussion work is worth 15 points/week.

Students will earn points each week for their discussion participation based on the following criteria: 

Timely Contributions	Excellent 15 points	Average 12 points	Below Average 10 points	None 0 points
	minimum 2 contributions well distributed throughout wk	minimum 1-2 contributions somewhat distributed throughout wk	minimum 1 contributions not distributed throughout wk	no contributions or only DQ answer
Quality of Contribution & Demonstration of Knowledge	Clearly understands concepts and incorporates them in discussion  Always advances discussion  Always includes examples and real life applications	Understands concepts and incorporates them in discussion  Often/sometimes advances discussion  Often/sometimes includes examples and real life applications	Not evident concepts are understood and are not incorporated in discussion  Responses are copied, have little to do with concepts and doesn’t advance discussion  Examples and real life applications are not included	NA

 

2.) Homework Assignment (210 points)

The course contains 6 Homework Assignments, each providing the student with 2 attempts to successfully complete, demonstrating mastery of the learning content. The 6 weekly homework assignments, cumulatively, build to the comprehensive final exam.

3.) Research Paper (240 points) (Course Final Assessment)

Note: The Master of Business Administration classes (ACCT, BUSN, FINC, HCMG, HRMG, MGMT, MKTG and MAPH) require a grade of C or better on the final assessment in the class in order to earn a passing grade in the course. This requirement must be met by all students completing these courses regardless of degree or program (excluding the Executive MBA students).

The research paper assignment is worth 240 points or 24% of the course grade. A grade of C or better is required as per MBA policy as this is the Final Assessment for the course.

The objectives/purpose of the research paper project are to enable you to do a comprehensive financial analysis of a publicly traded corporation; and provide you with substantial information for you to make recommendations regarding investing in this corporation.

Your financial analysis report will be driven by a rigorous ratio analysis, and aggressively supplemented with your written analysis, interpretation, and evaluation of the data.

Your research should be strategically driven by two probing questions:

-Would you invest your financial capital in the selected firm as a shareholder?

-Would you invest your human and intellectual capital in the firm as an employee?

Steps in preparation of financial analysis report:

1.) Select a publicly held company

2.) Select a benchmark firm to compare your company against. The benchmark firm is typically the largest competitor.

3.) Obtain the firm’s balance sheet, income statement, and statement of cash flows for

the past 5 years. Download or read the firm’s annual report.

4.)   Go to:   http://www.sec.gov/edgar/searchedgar/webusers.htm

Research EDGAR’s database for additional SEC report filings: 8-k, 10-Q.

4.) The following table is the type of Excel or Word table that should be used to gather and report your ratio and financial performance data. Note the 5 financial diagnostic categories that should be used in your analysis.

Financial diagnostic categories	Chosen company              vs.	Benchmark competitor
1.)   Liquidity of short-term assets	-Current ratio -Cash ratio -Quick ratio	-Current ratio -Cash ratio -Quick ratio
2.)   Long-term debt-paying ability	-Debt ratio -Debt-equity ratio -Times interest earned	-Debt ratio -Debt-equity ratio -Times interest earned
3.)   Profitability
	-Net income/sales (profit margin) -Net income/assets (ROA) -Net income/shareholder equity  (ROE)	-Net income/sales (profit margin) -Net income/assets (ROA) -Net income/shareholder equity  (ROE)
4.)   Asset utilization/ management efficiency	-Total asset turnover -Inventory turnover   measures -Accounts receivable turnover	-Total asset turnover -Inventory turnover   measures -Accounts receivable turnover
5.)   Market measures	-Price/earnings ratio -Earnings per common share -Dividend payout	-Price/earnings ratio -Earnings per common share -Dividend payout

Use 2-3 ratios per diagnostic category. Place your ratio calculations in the table for your selected companies—primary company and benchmark competitor. Using 5 diagnostic categories, and 3 ratios to assess each category, results in 15 ratio measures per company that will be compared side by side.

6.)   To validate your research, 5 years of data should be analyzed.

7.) The financial analysis report must be written properly. They must include a title page, a table of contents, and a reference page. For both midterm and final report, information sources from the web, etc. must be cited properly, using APA style.

This means that every table that you cut and pasted or typed from the web must have a source at the bottom of the table AND that citing must also be included in a reference page at the end of the report.

The parts of the research paper are discussed below. The completed report (parts a through h) is due day 7 of week 6. Your project should include:

a. An overview of the corporation.

i. Provide general information regarding the type of business, products and/or services, location of headquarters, name of CEO, number of employees, and countries of operation, etc.

b. The latest financial statements

i. Get the income statement, balance sheet, cash flow statement, and the statement of owners’ equity for the past fiscal year. Create Turnitin-friendly versions of the financial statements; do not just ‘cut and paste’ them in your report. Do not forget to cite the source under each statement.

ii. If you cannot cut and paste them, you may have to type in the information in a table in your report.

c. A summary of each financial statement

i. Take each statement and state the key parts in words. Tell a story from each of the financial statements. For example, for the income statement, the story starts like, “Total Revenues in 2010 were $10 billion, while Cost of Goods Sold were $8 billion, leaving a gross profit margin of $2 billion, or 20 percent of total revenues….After taking out interest and taxes from EBIT, the net income was $0.5 billion, or 5 percent of total revenues.”

d. Ratio calculation (include 5 major types of ratios. Refer to chapter 3, Analysis of Financial Statements)

i. Organization of this section is based on the FIVE types of ratios listed in the text book. Calculate the ratios from the financial statements in part c above using Excel or your calculator and present them in a table.

ii. Find industry financial ratios online (eg. Yahoo.com) and compare your corporation’s ratios to these industry ratios.

iii. Present your results following the five types of ratios discussed in part d.

iv. A table with both corporation and industry ratios is required;

v.

e. Discussion of key statistics provided by sources like Yahoo finance.

i. There are many different other statistics available for your corporation. These include market value, beta, and diluted EPS, etc. Discuss some of the key statistics that you think can assist you to determine if this corporation is a good buy or sell.

f. For you to decide if a corporation’s stock is a good buy or sell, you must forecast several key variables, including the stock price.

i. Use historical prices (5 years of monthly data recommended) and forecast the stock price for the next year. Use regression analysis, and/or moving average, etc. to create your forecast.

ii. Create a graph from the historical data and show your forecast on the same graph. You can add a trend line to the graph to help you with a forecast. Include the graph in your report.

iii. You need to say specifically what the forecasted value of the stock price is.

iv. You must address the question, “Is this forecast reasonable?” Must you amend your analysis to get a more reasonable forecast?

g. Other information pertinent to the corporation that could affect its future performance and stock price.

i. This could include dividend policy, capital structure, bond ratings, expert opinions on TV, new projects, litigation, regulation, etc. Search for information on the web regarding this corporation. Look at company complaint blogs, etc.

h. Recommendation regarding the future of this corporation.

i. Is the stock a good buy, average buy, or a poor buy (implying a good sell)?

ii. Include a justification of your recommendation based on your analysis and research.

Finance 620 Research Paper Grading Rubric 2017-2018

FINC 620 RESEARCH PAPER RUBRIC
Objective of Paper: The objectives/purpose of the research paper project are to enable you to do a comprehensive financial analysis of a publicly traded corporation; and provide you with substantial information to make recommendations regarding investing in this corporation. (Total Points = 240):
a. An overview of the corporation	YES	NO	PARTIAL
Provide general information regarding the type of business, products and/or services, location of headquarters, name of CEO, number of employees, and countries of operation, etc. = 15 points
Total Points Awarded ( Possible) = 15 points	15
b. The latest financial statements & Summary of each financial statement. (b and c)	YES	NO	PARTIAL
Get the income statement, balance sheet, cash flow statement, and the statement of owners’ equity for the past fiscal year. Create SafeAssign-friendly versions of the financial statements; do not just ‘cut and paste’ them in your report. Do not forget to cite the source under each statement. If you cannot cut and paste them, you may have to type in the information in a table in your report. = 15 points
Take each statement and state the key parts in words. Tell a story from each of the financial statements. For example, for the income statement, the story starts like, “Total Revenues in 2010 were $10 billion, while Cost of Goods Sold were $8 billion, leaving a gross profit margin of $2 billion, or 20 percent of total revenues….After taking out interest and taxes from EBIT, the net income was $0.5 billion, or 5 percent of total revenues.” = 40 points
Total Points Awarded (Possible) = 55 points	55

d. Ratio calculation (include 5 major types of ratios)	YES	NO	PARTIAL
Organization of this section is based on the FIVE types of ratios listed in the text book. Calculate the ratios from the financial statements in part c above using Excel or your calculator and present them in a table. = 25 points
Find industry financial ratios online (eg. Yahoo.com) and compare your corporation’s ratios to these industry ratios. = 15 points
Present your results for the five types of ratios. A table with both corporation and industry ratios is required; = 40 points
Total Points Awarded ( Possible) = 80 points	80
e. Discussion of key statistics provided by sources like Yahoo finance	YES	NO	PARTIAL
There are many different other statistics available for your corporation. These include market value, beta, and diluted EPS, etc. Discuss some of the key statistics that you think can assist you to determine if this corporation is a good buy or sell. =15 points
Total Points Awarded ( Possible) = 15 points	15

f. For you to decide if a corporation’s stock is a good buy or sell, you must forecast several key variables, including the stock price	YES	NO	PARTIAL
Use historical prices (5 years of monthly data recommended) and forecast the stock price for the next year. Use regression analysis, and/or moving average, etc. to create your forecast. = 10 points
Create a graph from the historical data and show your forecast on the same graph. You can add a trend line to the graph to help you with a forecast. Include the graph in your report. = 10 points
You need to say specifically what the forecasted value of the stock price is. = 5 points
You must address the question, “Is this forecast reasonable?” Must you amend your analysis to get a more reasonable forecast? =10 points
Total Points Awarded ( Possible) = 35 points	35
g. Other information pertinent to the corporation that could affect its future performance and stock price AND Recommendation regarding the future of the corporation (g and h)	YES	NO	PARTIAL
This could include dividend policy, capital structure, bond ratings, expert opinions on TV, new projects, litigation, regulation, etc. Search for information on the web regarding this corporation. Look at company complaint blogs, etc. = 10 points
Is the stock a good buy, average buy, or a poor buy (implying a good sell)? Include a justification of your recommendation based on your analysis and research. = 30 points
Total Points Awarded ( Possible) = 40 points	40
Grand total points	240

4.) LearnSmart Reflection (35 points)

Reflect on your use of LearnSmart throughout the course. Using the week 7 LearnSmart forum, articulate in 200-300 words how using this adaptive learning product facilitated your understanding of course concepts.

5.) Final exam (200 points)

The final comprehensive exam is an assessment of your overall financial knowledge, and will, therefore, include chapters covered in the course; prerequisite concepts addressed in the beginning chapters of the text in Finance 510; and/or your previous finance classes if Finance 510 was waived. 

Be prepared to demonstrate your overall financial knowledge.  The final exam will be administered in the week 7.

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