COURSE SYLLABUS

School of Management
The University of Texas at Dallas

Course: AIM 6344 – Financial Statement Analysis

Instructor: Dr. Mark Anderson
Semester: Summer 2006

| Course Information | Technical Requirements | Course Access | Communications |

| Student Assessment | Scholastic Dishonesty | Course Evaluation | Course Outline | Addendum |

Course Information
Course Description

Welcome to AIM 6344 with Dr. Mark Anderson. My objective is to help you prepare to
use financial statements and other information resources of the financial markets to
make business decisions.

Instructor Information

You should normally contact me through WebCT e-mail. Here is my other contact
information:

e-mail: mark.anderson@utdallas.edu

Office: SM 4.813 Telephone: 972-883-2056 Fax: 972-883-6811

I am typically in my office for consultation from 2:00 PM to 4:00 PM Monday and

Wednesday.

Teaching assistants will also be available to help you. They will introduce themselves
and provide you with contact information through the main discussion board.

Course Materials

The required text for this class is:

Financial Statement Analysis (Ninth Edition) by Wild, Subramanyam and Halsey.

Published by McGraw-Hill Irwin. ISBN# 0073100234.

Textbooks and some other bookstore materials can be ordered online through MBS Direct
Virtual Bookstore or Off Campus Books online ordering site. They are also available at the UTD
Bookstore and Off-Campus Books.

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Important, Time-Sensitive Requirement
Study teams will be formed immediately at the start of the course. To facilitate the
process, the following information, formatted as shown below, must be sent to the
instructor immediately upon logging in to the course via WebCT e-mail.

1. Last Name; First Name; UTD Degree Program and Expected Graduation Semester
2. Collegiate Degree(s) Earned; Year(s) Earned; Name(s) of the Granting Institution(s)
3. Number of Earned Collegiate Semester Hours of Accounting; Where Earned
(Institution)
4. Short Summary of Prior Business Experience with Most Recent Experience First
5. A Short Statement of Career Objectives and How You Expect This Course to Help
6. Times and Days of the Week that You Are Available to Work on this Class

Technical Requirements
In addition to a confident level of computer and Internet literacy, certain minimum technical
requirement must be met to enable a successful learning experience. Please review the
important technical requirements and the web browser configuration information.

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Course Access and Navigation

This course was developed using a web course tool called WebCT. It is to be delivered entirely
online. Students will use their UTD NetID account to login to the course at:
http://webct.utdallas.edu. Please see the course access and navigation information.

To get started with a WebCT course, please see the Getting Started: Student WebCT
Orientation.

If you have any problems with your UTD account or with the UTD WebCT server, you may send
an email to: assist@utdallas.edu or call the UTD Computer Helpdesk at: 972-883-2911. If you
encounter any technical difficulties within the course site, please send an email to
gmbasupport@utdallas.edu.

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Communications
Your WebCT course has built-in communication tools which will be used for interaction and
communication. Some external communication tools such as regular email and a web
conferencing tool may also be used during the semester. Please see more details about
communication tool information.

Interaction with Instructor: The instructor will communicate with students mainly using the
Announcements and Discussions tools. Students may send personal concerns or questions to
the instructor using course Email tool. Instructor will reply to student emails or Discussion board
messages within 2 working days under normal circumstances.

The Discussion boards are information areas where students communicate with
each other, the instructor and teaching assistants. Anytime you would like to ask
other students in this course a question or discuss a particular issue, you should use
the Discussion boards. Be sure to visit often (at least twice a week).

NOTE: Email sent to the instructor asking questions that would more
appropriately be answered in the general discussion area will be returned and
the student will be asked to post the question to the Discussion boards. Only
send Email if you have a private issue, such as a question about your grades. Soft
skills that you should learn in this class include skills in communication and the use
of technology to communicate as a member of a community. Take advantage of this
opportunity to learn skills that will benefit you in the workplace.

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Student Assessment
There are three ways for you to interact in this class. One is to interact individually with
the basic course content and the professor. The second is to interact with fellow
students and the professor as you work on challenging exercises, problems and cases
from the text. The third is to interact with students and the professor in projects that
utilize the information resources of the financial community.

The class assessment system is set up to encourage you to participate in all three of
these types of interactions. Your knowledge of the basic content will be tested through
quizzes based on the text reading and review questions. Your ability to apply the
concepts will be evaluated based on your team’s submissions of assigned exercises,
problems and cases. Your ability to extend your analysis skills to real situations will be
evaluated based on team presentations of projects that evaluate real companies. The
exams will be based on assigned exercises, problems and cases. The value of your
individual contribution to team assignments and projects will be assessed by your fellow
team members.
The course is organized into 7 modules. There will be a quiz and a team assignment
for modules 1 through 6. Module 7 consists of preparation and evaluation of team
presentations of cases. Your team will choose either to analyze a situation where
companies have been accused of financial manipulation or to perform a comparative
analysis of two companies that compete in a product market.

Module 1: Introduction and Overview (chapter 1)

Module 2: Financial Reporting (chapter 2)
Module 3: Accounting Analysis of Financing Activities (chapter 3)
Module 4: Accounting Analysis of Investing Activities (chapters 4 & 5)
Module 5: Accounting Analysis of Operating Activities (chapters 6 & 7)
Module 6: Financial Analysis of Profitability and Risk (chapters 8 and 10)
Module 7: Project: Manipulation Case or Comparative Analysis

Modules 1-6 consist of the following components:

1. Text reading: You should read through the assigned readings for each chapter
and then review by working through the questions at the end of the chapter.
Solutions to the questions will be available throughout the course.

2. PowerPoint and Instructor: A PowerPoint presentation has been developed for

each module. I discuss concepts and focus your attention on ideas and
techniques that I want to emphasize.

3. Quizzes: Quiz questions are based on the text readings and questions at the end
of each chapter. Quizzes for all modules will be available for the duration of the
module. Don’t fall behind!

4. Team Exercises and Problems: A set of team exercises, problems and cases will
be due at the end of the designated period for each module. Each team submits
one set of solutions.

Module 7 consists of team preparation and presentation of cases and evaluation of case
presentations made by other teams. Your team will choose to do either Project I or
Project II.

Project I: Analyze a situation where alleged financial manipulation has occurred.

Project II: Select two companies that compete directly with each other and prepare a
comparative analysis of the two companies based on profitability and risk.

Detailed information about the projects is provided below. Projects will be presented (in
written form – Word, PowerPoint or Excel) to the class and must be submitted on time.
You should not wait until the designated module to prepare the team projects. Teams
should begin working on projects as soon as possible.
Two other teams will be assigned to evaluate your team’s project. Each team of
students making an evaluation of another project will be required to ask a minimum of
three substantive questions about the analysis through the discussion board. The
presenting team will respond to the questions. The evaluating teams will be scored
based on their interaction with the presenting teams.

Exams: The exams will be based on the assigned exercises, problems and cases.

Grading Information

Element Evaluations Total

Quizzes Best 5 @ 2% each 10%
TEAM assignments 6 @ 2.5% each 15%
TEAM projects 1 @ 20% each 20%
Evaluation of Peer Projects 2 @ 2.5% each 5%
Exams 2 @ 20% 40%
Contribution to team 10%
Total available 100%

Students can check their grades by clicking “My Grade” under My Tools on the course menu
after the grade for each assessment task is released.

Group Assignments

Groups will be assigned at the beginning of the class and will be announced under
Announcements. Instructor may also use group sign-up sheet to form groups for group
assignments or projects. A private discussion area will be set up on the Discussion board for
internal group communications. A group chat room can also be created for each group to use. A
web conference system Elluminate Live is available for use. Teams can schedule a live web
conference for team work. Please see communication tool information on how to make
reservation and other web conference information.

Assignment submission instructions: You will submit your assignments (in the required file
format with a simple file name and a file extension) by using the Assignments tool on the course
site. Please see the Assignments link on the course menu or see the icon on the designated
page. You can click each assignment name link and follow the on-screen instructions to upload
and submit your file(s). Please refer to the Help menu for more information on using this tool.
Please note: each assignment link will be deactivated after the assignment due time. After your
submission is graded, you may click each assignment’s “Graded” tab to check the results and
feedback. For the team project assignment, one group member will submit the assignment for
the group and all group members will be able to view the results and feedback once it’s been
graded.

Online Tests/Quizzes

You can access quizzes/exams by clicking the Assessments link on the course menu or see the
quiz/exam icon on the designated page. Each quiz is timed and can usually be accessed only
one time within the scheduled time window. Please read the on-screen instructions carefully
before you click “Begin Assessment”. After each quiz is graded and released, you may go back
to the Assessments page and click “View All Submissions” to review your exam results.

Examinations

The examinations will be available on-line during the time specified in the course schedule
below.

Evaluation of individual contribution to your group will be made along the following dimensions:

A. Share of work
B. Helpful in understanding difficult topics
C. Helpful with ideas, questions and discussion
D. Quality and timeliness of work performance
E. Leadership and overall collegiality

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Scholastic Dishonesty
The University has policies and discipline procedures regarding scholastic dishonesty. Detailed
information is available on Scholastic Dishonesty web page. All students are expected to
maintain a high level of responsibility with respect to academic honesty. Students who violate
University rules on scholastic dishonesty are subject to disciplinary penalties, including the
possibility of failure in the course and/or dismissal from the University. Since such dishonesty
harms the individual, all students and the integrity of the University, policies on scholastic
dishonesty will be strictly enforced.

Course Evaluation
As required by UTD academic regulations, every student needs to do an evaluation for each
enrolled course at the end of the semester. An online instructional assessment form will be
made available for your confidential use. Please look for the course evaluation link on the
course Homepage towards the finishing of the course. Your feedback and comments are greatly
appreciated.

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Course Outline/Schedule
Module Reading Team Assignment (Date Due) Quiz/Exam
(Dates) (Date Due)
Module 1 Chapter 1 (pp. 1-35 Problem 1-10 and Case 1-5* Quiz (5/24)
(5/15 to 5/24) and 39-42) (Due 5/24)
*When doing Case 1-5, use
average values, not end of year
values for asset utilization
ratios.
Module 2 Chapter 2 (all) Problem 2-13 Quiz (5/31)
(5/25 to 5/31) Case 2-1 (due 5/31)
Module 3 Chapter 3 (all) Problem 3-7 Quiz (6/11)
(6/1 to 6/11) Case 3-3 (a & b) (due 6/11)
Module 4 Chapter 4 (all) and Exercise 4-10 Quiz (6/21)
(6/12 to 6/21) chapter 5 (all) Case 4-4
Case 5-2 (due 6/21)
Exam #1 Exam (6/25)
(6/22 to 6/25)
Module 5 Chapter 6 (all) and Exercise 6-11 Quiz (7/5)
(6/26 to 7/5) chapter 7 (all) Cases 6-3 and 7-2 (due 7/5)
Module 6 Chapters 8 (all) and Problems 8-5 and 10-8 Quiz (7/16)
(7/6 to 7/16) 10 (all) Case 8-5 (due 7/16)
Module 7 Project (due 7/23)
(7/17 to 7/26) Evaluations (due 7/26)
Exam #2 Exam (7/30)
(7/27 to 7/30)

Supplemental Questions, Exercises, Problems, Cases (not to be handed in)

Solutions will be made available for the following questions, exercises, problems and
cases. These are not assigned for hand-in purposes but to provide you with additional
learning opportunities and examples to be used at your own discretion.

Chapter Questions Exercises Problems Cases

1 All 3,4,5,6,7,8, 8,9,11 2,3
2 All 5,10,12 7,10,11,12 3
3 All 9,13,14 1,9 2
4 All 5 2,3 None
5 All except 7&9 2,5 1,4 None
6 All 2,8,9,10,13 3 2
7 All 1,5,6,9 9 1
8 All 6,7,8,10 3,7 1,6
10 All 2,3 1,9 -

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 Project I - Earnings manipulation/management: understanding a case

Objective: The objective of this project is to provide you with an opportunity to reconstruct and
understand the economic events for a case where earnings manipulation has been suspected
or proven. You may choose a company and topic in financial reporting that is of interest to you.

Sources: Choose a company where earnings manipulation is suspected based on (a) articles
in the business press such as the Wall Street Journal; or (b) Stanford Law School database of
Complaints with respect to securities litigation: http://securities.stanford.edu/index.html

Suggested Approach:
• Identify a company and get the relevant financial statement data and supporting articles
(see instructions for project II for sources of financial statements and other information).
• Reconstruct / understand the nature of the economic events that led to the manipulation and
the reporting choices.
• Describe the effects of the reporting choices on the income statement and balance sheet
and on key financial ratios.
• Consider the incentives for management to engage in the manipulation behavior.
• Evaluate whether there were warning signs, such as changes in financial statement
relationships or differences between the firm's performance and industry performance, that
would have made you wary of the financial reports before the manipulation was uncovered.

Presentation: You will be responsible for preparing a presentation that can be communicated
electronically. This may be a written report prepared in a Word document or a PowerPoint
presentation accompanied by a script or audio. Your report should be sufficiently long to make
for meaningful discussion but should not be too long. If you were to prepare a written report, an
executive summary of 5-7 pages [typewritten, 1.5 or double spaced] would be sufficient. You
may supplement the written pages with appendices that include financial statements, or
schedules. Your report should demonstrate an understanding of the accounting issues and the
effects of the manipulation/management on the financials. A key question is whether financial
analysis could have detected the manipulation. Appendices should be used to demonstrate the
effects of the manipulations on financial statements and stock prices over the relevant periods
(when the manipulations occurred and when they were exposed). Your presentation should
stimulate discussion. Please submit one copy per group.

Evaluation: Evaluation of presentations by other teams will be based on the content,

presentation (style, readability, impact), and discussion stimulated by your presentation.
 Project II - Industry Analysis

Objective: The objective of this project is to analyze the performance of competing companies.
You will become acquainted with the usefulness and limitations of ratio analysis and other
techniques.

Suggested Approach:
Ø Choose two U. S. firms that are traded in the stock market and compete with each other in
some markets. Obtain the two or three most recent annual reports for each firm. If possible,
obtain three years of income statement and four years of balance sheet data for each firm.
Ø Prepare an analysis of the industry and the two companies' strategies for competing in the
industry. Information about the firms’ strategies may be obtained from press releases and
the Management Discussion & Analysis section of annual reports.
Ø Read the financials, identify data issues and make appropriate adjustments to the financials.
You should adjust for non-recurring items, differences in accounting for inventories
(LIFO/FIFO) if material, off-balance sheet financing through operating leases, differences in
tax rates, and other differences in accounting between the two companies.
Ø Perform a profitability and risk analysis using the adjusted statements.
Ø Compare the firms based on their success in implementing their strategies.
Ø Given the firms’ strategies and financial performance (trends of key ratios), make predictions
about the future performance of the companies.

Sources:
Ø Annual reports may be obtained from the SEC’s EDGAR database of company filings or
from the company directly. Please do not go to databases such as COMPUSTAT or
VALUELINE to get this data, because adjustments are already made to some items.
Company filings are available through the SEC at
http://www.sec.gov/edgar/searchedgar/companysearch.html
They are also available through PWC’s Edgarscan at
http://edgarscan.pwcglobal.com/servlets/edgarscan

Ø For press releases you may go to the company’s homepage or use the Lexis-Nexis
database at the UTD library.

Presentation: You will be responsible for preparing a presentation that can be communicated
electronically. This may be a written report prepared in a Word document or a PowerPoint
presentation accompanied by a script or audio. Your report should be sufficiently long to make
for meaningful discussion but should not be too long. If you were to prepare a written report, an
executive summary of 5-7 pages [typewritten, 1.5 or double spaced] would be sufficient. The
objective of the presentation is to provide an opportunity for you and your peers to discuss and
evaluate corporate performance. You may assume a decision context such as a potential
lender or investor but you do not have to value the shares. You may supplement the written
pages with appendices that include financial statements, or schedules showing ratio analyses,
etc. Your presentation should stimulate discussion. Please submit one copy per group.

Evaluation:
Evaluation of presentations by other teams will be based on the content, presentation (style,
readability, impact), and discussion stimulated by your presentation.

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Syllabus Addendum
Student Conduct & Discipline

The University of Texas System and The University of Texas at Dallas have rules and
regulations for the orderly and efficient conduct of their business. It is the responsibility of each
student and each student organization to be knowledgeable about the rules and regulations
which govern student conduct and activities. General information on student conduct and
discipline is contained in the UTD publication, A to Z Guide, which is provided to all registered
students each academic year.

The University of Texas at Dallas administers student discipline within the procedures of
recognized and established due process. Procedures are defined and described in the Rules
and Regulations, Board of Regents, The University of Texas System, Part 1, Chapter VI,
Section 3, and in Title V, Rules on Student Services and Activities of the university’s Handbook
of Operating Procedures. Copies of these rules and regulations are available to students in the
Office of the Dean of Students, where staff members are available to assist students in
interpreting the rules and regulations (SU 1.602, 972/883-6391).

A student at the university neither loses the rights nor escapes the responsibilities of citizenship.
He or she is expected to obey federal, state, and local laws as well as the Regents’ Rules,
university regulations, and administrative rules. Students are subject to discipline for violating
the standards of conduct whether such conduct takes place on or off campus, or whether civil or
criminal penalties are also imposed for such conduct.

Academic Integrity

The faculty expects from its students a high level of responsibility and academic honesty.
Because the value of an academic degree depends upon the absolute integrity of the work done
by the student for that degree, it is imperative that a student demonstrate a high standard of
individual honor in his or her scholastic work.

Scholastic dishonesty includes, but is not limited to, statements, acts or omissions related to
applications for enrollment or the award of a degree, and/or the submission as one’s own work
or material that is not one’s own. As a general rule, scholastic dishonesty involves one of the
following acts: cheating, plagiarism, collusion and/or falsifying academic records. Students
suspected of academic dishonesty are subject to disciplinary proceedings.

Plagiarism, especially from the web, from portions of papers for other classes, and from any
other source is unacceptable and will be dealt with under the university’s policy on plagiarism
(see general catalog for details). This course will use the resources of turnitin.com, which
searches the web for possible plagiarism and is over 90% effective.

Email Use

The University of Texas at Dallas recognizes the value and efficiency of communication
between faculty/staff and students through electronic mail. At the same time, email raises some
issues concerning security and the identity of each individual in an email exchange. The
university encourages all official student email correspondence be sent only to a student’s U.T.
Dallas email address and that faculty and staff consider email from students official only if it
originates from a UTD student account. This allows the university to maintain a high degree of
confidence in the identity of all individual corresponding and the security of the transmitted
information. UTD furnishes each student with a free email account that is to be used in all
communication with university personnel. The Department of Information Resources at U.T.
Dallas provides a method for students to have their U.T. Dallas mail forwarded to other
accounts.

Withdrawal from Class

The administration of this institution has set deadlines for withdrawal of any college-level
courses. These dates and times are published in that semester's course catalog. Administration
procedures must be followed. It is the student's responsibility to handle withdrawal requirements
from any class. In other words, I cannot drop or withdraw any student. You must do the proper
paperwork to ensure that you will not receive a final grade of "F" in a course if you choose not to
attend the class once you are enrolled.

Student Grievance Procedures

Procedures for student grievances are found in Title V, Rules on Student Services and
Activities, of the university’s Handbook of Operating Procedures.

In attempting to resolve any student grievance regarding grades, evaluations, or other

fulfillments of academic responsibility, it is the obligation of the student first to make a serious
effort to resolve the matter with the instructor, supervisor, administrator, or committee with
whom the grievance originates (hereafter called “the respondent”). Individual faculty members
retain primary responsibility for assigning grades and evaluations. If the matter cannot be
resolved at that level, the grievance must be submitted in writing to the respondent with a copy
of the respondent’s School Dean. If the matter is not resolved by the written response provided
by the respondent, the student may submit a written appeal to the School Dean. If the
grievance is not resolved by the School Dean’s decision, the student may make a written appeal
to the Dean of Graduate or Undergraduate Education, and the deal will appoint and convene an
Academic Appeals Panel. The decision of the Academic Appeals Panel is final. The results of
the academic appeals process will be distributed to all involved parties.

Copies of these rules and regulations are available to students in the Office of the Dean of
Students, where staff members are available to assist students in interpreting the rules and
regulations.

Incomplete Grade Policy

As per university policy, incomplete grades will be granted only for work unavoidably missed at
the semester’s end and only if 70% of the course work has been completed. An incomplete
grade must be resolved within eight (8) weeks from the first day of the subsequent long
semester. If the required work to complete the course and to remove the incomplete grade is
not submitted by the specified deadline, the incomplete grade is changed automatically to a
grade of F.

Disability Services

The goal of Disability Services is to provide students with disabilities educational opportunities
equal to those of their non-disabled peers. Disability Services is located in room 1.610 in the
Student Union. Office hours are Monday and Thursday, 8:30 a.m. to 6:30 p.m.; Tuesday and
Wednesday, 8:30 a.m. to 7:30 p.m.; and Friday, 8:30 a.m. to 5:30 p.m.

The contact information for the Office of Disability Services is:

The University of Texas at Dallas, SU 22
PO Box 830688
Richardson, Texas 75083-0688
(972) 883-2098 (voice or TTY)

Essentially, the law requires that colleges and universities make those reasonable adjustments
necessary to eliminate discrimination on the basis of disability. For example, it may be
necessary to remove classroom prohibitions against tape recorders or animals (in the case of
dog guides) for students who are blind. Occasionally an assignment requirement may be
substituted (for example, a research paper versus an oral presentation for a student who is
hearing impaired). Classes enrolled students with mobility impairments may have to be
rescheduled in accessible facilities. The college or university may need to provide special
services such as registration, note-taking, or mobility assistance.

It is the student’s responsibility to notify his or her professors of the need for such an
accommodation. Disability Services provides students with letters to present to faculty
members to verify that the student has a disability and needs accommodations. Individuals
requiring special accommodation should contact the professor after class or during office hours.

Religious Holy Days

The University of Texas at Dallas will excuse a student from class or other required activities for
the travel to and observance of a religious holy day for a religion whose places of worship are
exempt from property tax under Section 11.20, Tax Code, Texas Code Annotated.
The student is encouraged to notify the instructor or activity sponsor as soon as possible
regarding the absence, preferably in advance of the assignment. The student, so excused, will
be allowed to take the exam or complete the assignment within a reasonable time after the
absence: a period equal to the length of the absence, up to a maximum of one week. A student
who notifies the instructor and completes any missed exam or assignment may not be penalized
for the absence. A student who fails to complete the exam or assignment within the prescribed
period may receive a failing grade for that exam or assignment.
If a student or an instructor disagrees about the nature of the absence [i.e., for the purpose of
observing a religious holy day] or if there is similar disagreement about whether the student has
been given a reasonable time to complete any missed assignments or examinations, either the
student or the instructor may request a ruling from the chief executive officer of the institution, or
his or her designee. The chief executive officer or designee must take into account the
legislative intent of TEC 51.911(b), and the student and instructor will abide by the decision of
the chief executive officer or designee.

Off-Campus Instruction and Course Activities

Off-campus, out-of-state, and foreign instruction and activities are subject to state law and
University policies and procedures regarding travel and risk-related activities. Information
regarding these rules and regulations may be found at the website address given below.
Additional information is available from the office of the school dean.
(http://www.utdallas.edu/Business Affairs/Travel_Risk_Activities.htm)
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