FIN 400 FINANCIAL MANAGEMENT Fall, 2004 INSTRUCTOR CLASS TIME CLASS OFFICE HOURS TELEPHONE kshakoori@csub.edu : Dr.

Shakoori : M, W 3:30-5:35 pm : DDH 103 G : 1:00-3:30 M, W : 664-2311/3406

TEXTBOOK: Brigham, Eugene F. and Joel F. Houston Fundamentals of Financial Management Concise, 4th Edition; ISBN # 0-03-032101-8. Case Book: Cases in Financial Management by Sulock and Dunkelberg; ISBN # 471-11043-4 COURSE OBJECTIVES:

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Advanced Financial Management Course is designed to provide students with the opportunity both to recognize and to test the relevance of modern financial concepts in the context of real managerial decisions in the private sector. This course bilds on the concepts introduced in FIN300. Case method utilizing statistical and financial techniques and computer databases are used to show real world application. COURSE METHODOLOGY: This course will place a fairly heavy emphasis on case analysis, assigned problems and term project. ATTENDANCE POLICY: I expect no unexcused absences through the term. GRADING POLICY: Term Project...................................20% Case Assignments...........................80% You should be properly registered to receive credit for this course. Please turn off your pagers and cell phones in classroom. General Course Guidelines: Lecture-case course; 6 individual cases, 1 group case and case discussions. Each individual case is worth 100 points, the group case is worth 200 points, and each individual case discussion 50 points.

PERSPECTIVES OF BUSINESS ASSESSMENT: Ethical Issues: About one hours of time is spend discussing ICFA Standards of Professional Conduct and Code of Ethics throughout the course. Global Issues: About one hour time is spend discussing international financial management. Political, Social, Legal, Regulatory, or Technological Issues: About one hour is spent discussing securities regulation. SKILLS ASSESSMENT Written Communication Skills: At least one written paper is assigned which comprises 20% of the students grade. Oral Communication Skills: At lease on oral presentation is required as part of the final course grade. Computer Usage: All written papers include a significant computer-based analysis. Primary computer applications include using COMPUSTATE and CRSP databases, spreadsheets and regression. Students must use the Internet to research specific companies. Quantitative Skills: All written papers include a significant quantitative analysis. Most course topics and exams have a significant quantitative component. Examples of topics with a significant quantitative focus include: financial statement analysis, growth and trend analysis, asset valuation, beta estimation, fundamental stock analysis, bond analysis, and option pricing. ASSESSMENT OF INTEGRATION OF CORE AREAS OF APPLICATION OF CROSSFUNCTIONAL APPROACHES TO ORGANIZATION ISSUES A. This course integrates the basic concepts of financial accounting, financial markets, and financial management. B. A fundamental knowledge of micro- and macroeconomics is necessary to understand how the securities market work and the role they play in the economy. Therefore, the fundamental economic concepts of equilibrium and the Law of One Price are pervasive in this course. Analysis of the macroeconomic environment is covered when we discuss the topic of stock evaluation. C. Financial statement analysis, stock and bond prices are used to measure management performance under various economic condition.

Dates September

October

November

December

CLASS SCHEDULE Topic, Readings and Cases Introduction to Finance 15,20 Chapters 1 and 2 Discussion Case: 22 La Posta Mexican Restaurants, Inc. (page 281) Financial Analysis 27 Chapters 3 and 4 Individual Case: 29 Spartan Roofing (page 49), Answer questions 1-6, and 8 Working Capital Management 4 Chapter 15 Working Capital Management 6 Chapter 15 Individual Case: 11 Deerpark (page 89) Capital Budgeting 13 Chapter 11 and 12 Capital Budgeting 18 Chapter 11 and 12 Capital Budgeting 20 Chapter 11 and 12 Individual Case: 25 Clear Lake Bakery (page 197) Cost of Capital and Capital Structure 27 Chapters 10 and 13 Cost Capital and Capital Structure 1 Chapter 10 and 13 Individual Case: 3 Taylor Brands (page 191) Company Valuation 8 Chapters 8 and 9 Company Valuation 10 No Readings Individual Case: 15 L.A. Caf (page 225) Dividend Policy 17 Chapter 14 Leasing Analysis 22 No Readings Group Cases: Morrow Construction (page 289) 1 Stinson Paving (page 292) AT&T (page 296) Anderson Autoparts (page 311)

Individual Case Analysis: Each case, except the discussion cases, should be prepared for oral discussion in the classroom and written for

submission to the instructor on the date indicated above. The principal parts of the written presentation should follow the questions at the end of each case. A rough page guideline is 6-8 pages per case, excluding tables or charts. Proper use of the English language and the style of the paper are considered in the grading process. Group Case Analysis: The framework for the analysis of the individual written cases (explained above) should be followed. Each group will write one group case analysis and present their findings to the case on the group case date. Term Project: Financial Statement Analysis This term project is designed to use financial statement analysis techniques for evaluating changes in a firms financial condition over time (time-series analysis for 10 years) and to assess the current financial condition of the firm. The basic objective of financial statement analysis from managements point of view is to obtain and analyze information that can be useful for financial decision making. This information can be used to evaluate performance of individuals and groups within the corporation as well as to coordinate the various activities of the firm. You are to choose a non-financial , publicly traded company and use BIRGC program stored in AMSPEC. Be sure to pick up the user guide for this program from your instructor. You are required to perform the following analysis: 1. Ratio Analysis: Analyze the changes in the ratios for your company and evaluate its credit worthiness. Graph the ratios and discuss any trends that might be apparent. 2. Time-Series Analysis: Using both Index and Common Size statements, for each of the ten years, identify major trends and changes. Are these trends positive or negative? And why? 3. Funds Flow Analysis: Prepare a funds flow statement for the past two years. Discuss what you know about this company from its fund flow statements. 4. Growth Analysis: Compare growth rates of sales, total assets, fixed assets, cost of good sold, other major expenses and net income for each of the ten years. Discuss the growth measures of your firm and arrive at a prediction about the future growth of sales and net income. 5. Pro-Forma Financial Statements: Using your sales growth rate, prepare a pro-forma financial statements for your company. Discuss whether your company will require additional funds to support forecasted sales. If yes, what sources of financing will be appropriate? 6. Conclusion: Based on above analysis what are the strength and weaknesses of your company? Does your evaluation suggest areas that might warrant further analysis?

This project would be graded based on presentation of your analysis and reasoning.