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FI 415 Financial Analysis and Planning
Heathcock, Geoffrey H.


Mission Statement: The mission of Park University, an entrepreneurial institution of learning, is to provide access to academic excellence, which will prepare learners to think critically, communicate effectively and engage in lifelong learning while serving a global community.

Vision Statement: Park University will be a renowned international leader in providing innovative educational opportunities for learners within the global society.

Course

FI 415 Financial Analysis and Planning

Semester

S1J 2009 DN

Faculty

Heathcock, Geoffrey H.

Title

Adjunct Faculty

Degrees/Certificates

M.B.A. - Accounting
B.A. - Mathematics
Certificate - Stanford Investment Management Program

Office Location

12734 Overbrook Rd, Leawood, KS 66209

Office Hours

By Appointment

Daytime Phone

816-916-5207

E-Mail

geoffrey.heathcock@park.edu

geoff811@hotmail.com

Web Page

http://www.rocknroll-edu.com

Semester Dates

January 15  thru March 5, 2009

Class Days

Thursday

Class Time

5:30-9:50 PM

Prerequisites

FI 360 - 3:0:3.

Credit Hours

3


Textbook:
  ·        Analysis for Financial Management,  Robert C. Higgins, 8th Edition, Irwin.  ISBN # 978-0-07-304180-3. 

·        Textbooks can be purchased through the MBS bookstore.

·        Textbooks can be purchased through the Parkville Bookstore.

Additional Resources:
 ·        Financial calculator (BA II Plus Texas Instruments preferred) will be required for this course. This will be used to perform calculations related to time value of money, future values, present value, interest rate calculations, and bond prices.

McAfee Memorial Library - Online information, links, electronic databases and the Online catalog. Contact the library for further assistance via email or at 800-270-4347.
Career Counseling - The Career Development Center (CDC) provides services for all stages of career development.  The mission of the CDC is to provide the career planning tools to ensure a lifetime of career success.
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Resources for Current Students - A great place to look for all kinds of information http://www.park.edu/Current/.


Course Description:
Analysis of the financial aspects of corporate business planning, evaluation of financial performance, valuation analysis, management of growth. Prerequisite: FI360 3:0:3

Educational Philosophy:

·        The instructor’s educational philosophy is based on a combination of lecture, dialogue, readings and applications. 

·        This is a demanding course that moves very quickly. Don’t fall behind, for each chapter is like a building block to the next. Make sure you not only understand the mechanics (the how’s) of the chapter’s text, but also the concepts (the why’s). For if you don’t understand the concepts, subsequent material will be difficult to comprehend.

·        Expect to spend 1-2 out-of-class hours for every hour in class.

·        There are eight (8) classroom sessions. Students are expected to be prepared for class, attend class, and fully participate in classroom discussions and activities.

Learning Outcomes:
  Core Learning Outcomes

  1. Interpret the three basic financial statements to assess the overall health of the firm.
  2. Create pro forma financial statements to forecast future financial performance of the firm.
  3. Assess the firm's four key ratios as a predictor of sustainable growth.
  4. Evaluate the possible opportunities to raise capital for the firm and discuss the outcomes of each on the firm.
  5. Apply the discounted cash flow techniques and estimation of relevant cash flows to evaluate possible investment opportunities for the firm.
  6. Recognize how risk affects investment decisions of the firm and the trade-off with expected return.


Core Assessment:

Class Assessment:
Course Projects: Each student will be required to complete two course projects.  The first is the Midterm Project (described below) and due during week 4.  The second is the Final Project (described below) and due during week 7.  The scope and expectations of each project will be described in the first week of class.  Further guidance will be provided throughout the course.

Midterm Project.  A written 3-5 page evaluation of a company (of your choice) traded on one of the major exchanges.  The evaluation will look at financial performance, assessment of future projections, and a calculation/assessment of the company’s sustainable growth rate. 
 
Final Project.  A written 3-5 page report on “The Value of _______ Company”.  This will be the same company as your Midterm project.  This will include a strategy for the acquiring company.

Final Exam Paper.  A written 3-5 page analysis of the valuation of Garmin.  The topic will be “The acquisition value and strategy that a branch of the FBI would offer for a small interest in Garmin”. 

Homework Assignments (8): The student will read the designated chapters in the textbook Analysis for Financial Management by Robert C. Higgins.  The student will then prepare the answers to the assigned problems after each chapter (as shown on the syllabus). 

Classroom Participation: Classroom participation points are gained through actively contributing in class, demonstrating understanding of the material and helping classmates to better understand the concepts of the course.  There will be class time for group problem solving and presenting results to the class.  Actively engaging in this activity will also be a large contributor to the classroom participation grade.  Classroom participation points will not be given on a week by week basis, but rather achieved through participation throughout the semester. 

 

Grading:
  Course Evaluation and Grading:

                           

Points (maximum)

Midterm Project

100

Final Project

100

Final Exam Paper

150

Homework Assignments (8)

200

Classroom Participation

150

 Total Points

700

 

Grading Scale

Grade

Percent

 

Grade

Percent

A

93 – 100

C+

77 – 79

A-

90 – 92

C

73 – 76

B+

87 – 89

C-

70 – 72

B

83 – 86

D

60 – 69

B-

80 – 82

F

Less than 60

 

 

The course grade for students will be based on the overall average of homework and tests taken during the course in accordance with the weighting of the various requirements as stated in the syllabus.

All final exams in all School of Business and Management courses will be comprehensive and will be closed book and closed notes. They will constitute 30% of the total course grade and will not be a take-home exam. They will be completed during the test week in the period designated by the registrar or by the Proctor in the case online courses. If calculators are allowed, they will not be multifunctional electronic devices that include features such as: phones, cameras, instant messaging, pagers, and so forth. Electronic Computers will not be allowed on final exams unless an exception is made by the Dean of the School of Business and Management.

Late Submission of Course Materials:

Assignments are due at the start of class. If a student is not attending a class, the assignment should be e-mailed to the instructor by the time the assignment is due. It is the student’s responsibility to ensure that assignments are received by the instructor. Late assignments will be reduced by one grade. To receive any credit for a late assignment, the paper must be turned-in by the start of the next scheduled class.

 

Course Topic/Dates/Assignments:

Class Meeting

(Thursday)                      Topics                                                   Reading              Tests/Projects

Week – 1       Jan. 15     Interpreting Financial Statements      Chapter 1             1, 3, 5, 7

Week – 2       Jan. 22     Evaluating Financial Performance    Chapter 2             1, 5, 9

                                        Financial Forecasting                        Chapter 3             9

Week – 3       Jan. 29     Managing Growth                               Chapter 4             1, 3, 5

                                        Financial Instruments & Markets      Chapter 5             1, 7

Week – 4       Feb. 5       Midterm Project

You choose a company that is traded on one of the major exchanges.  You will be provided with Value Line and company sheets for your company.
1. Evaluate the financial performance of your company (see Chapter 2, particularly pages 35 - 45 and 67 - 71).  Compare the health to the company's history and to the industry averages that your company is included. 
2. Examine the forecasts for the company (see Chapter 3, particularly tables 3.1, 3.2, 3.3, and 3.6).  Do you agree on the 2010 - 2012 projections of Value Line?  Why?
3. Calculate the company's "Sustainable Growth Rate” or g* (see Chapter 4, particularly pages 120 - 126).  Do you think the company can accomplish this?  If not, show your calculation and explain why the difference.

 Week – 5      Feb. 12   The Financing Decision                      Chapter 6              1, 3, 7, 9

Week – 6       Feb. 19    Discounted Cash Flow Techniques     Chapter 7             1, 3, 7, 9

Week – 7       Feb. 26    Risk Analysis in Investment Decisions Chapter 8            1, 5, 7

                      Final Project - Write a 3-5 page report (and attach supporting material) on:
The Value of "______" (Use the same company you selected on your Midterm Project) under the following circumstances:
- Its current value in today’s market (compared to its current trading price).  Why is it under or over-valued right now?  Use any method of valuation you desire.
- What is its value, assuming 2008 forecasts and why?  Use the cash flow / WACC valuation method.
- What is its value, assuming 2010/2012 forecasts and why?  Use the cash flow / WACC valuation method.
- Discuss who an acquirer could be (select 3 possibilities) and why would they be interested?
- What strategy would you recommend for the acquirer to use involving taking over ownership control of the company?  (Include a strategy that would finally end in 100% stock purchase of the company).

Week – 8       March 5        Business Valuation                        Chapter 9              1, 3, 7

                      Final Exam Paper

The student will examine “Garmin” (information provided by the teacher) - with the end result of writing a 3-5 page analysis on:  The acquisition value and strategy that a branch of the FBI would offer for a small interest in Garmin.  Assume:
 1. to keep it outside of SEC reporting laws, assume the amount of new Garmin Stock would amount to 4.9%.  What would be the price per share offered to Garmin?
2. This would result in an infusion of new capital for Garmin which would be earmarked (dedicated) toward funding Garmin to develop an international tracking device for "bad guys."  I'll let you discuss how this minute device would be inserted (unknowingly) by the FBI into the bad guys.
 3. You should use a Garmin's projected cash flow for the valuation and add in an expected additional cash flow from this new venture.  Assume the present value of a "reasonable ROE" over the next 5 years.  

4. Use the present value calculation that reflects Garmin's cash flow, discounted by its cost of capital (WACC).

Academic Honesty:
Academic integrity is the foundation of the academic community. Because each student has the primary responsibility for being academically honest, students are advised to read and understand all sections of this policy relating to standards of conduct and academic life.   Park University 2008-2009 Undergraduate Catalog Page 87

Plagiarism:
Plagiarism involves the use of quotations without quotation marks, the use of quotations without indication of the source, the use of another's idea without acknowledging the source, the submission of a paper, laboratory report, project, or class assignment (any portion of such) prepared by another person, or incorrect paraphrasing. Park University 2008-2009 Undergraduate Catalog Page 87

Attendance Policy:
Instructors are required to maintain attendance records and to report absences via the online attendance reporting system.

  1. The instructor may excuse absences for valid reasons, but missed work must be made up within the semester/term of enrollment.
  2. Work missed through unexcused absences must also be made up within the semester/term of enrollment, but unexcused absences may carry further penalties.
  3. In the event of two consecutive weeks of unexcused absences in a semester/term of enrollment, the student will be administratively withdrawn, resulting in a grade of "F".
  4. A "Contract for Incomplete" will not be issued to a student who has unexcused or excessive absences recorded for a course.
  5. Students receiving Military Tuition Assistance or Veterans Administration educational benefits must not exceed three unexcused absences in the semester/term of enrollment. Excessive absences will be reported to the appropriate agency and may result in a monetary penalty to the student.
  6. Report of a "F" grade (attendance or academic) resulting from excessive absence for those students who are receiving financial assistance from agencies not mentioned in item 5 above will be reported to the appropriate agency.

Park University 2008-2009 Undergraduate Catalog Page 89-90

Disability Guidelines:
Park University is committed to meeting the needs of all students that meet the criteria for special assistance. These guidelines are designed to supply directions to students concerning the information necessary to accomplish this goal. It is Park University's policy to comply fully with federal and state law, including Section 504 of the Rehabilitation Act of 1973 and the Americans with Disabilities Act of 1990, regarding students with disabilities. In the case of any inconsistency between these guidelines and federal and/or state law, the provisions of the law will apply. Additional information concerning Park University's policies and procedures related to disability can be found on the Park University web page: http://www.park.edu/disability .


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Park U - FI 415 - Financial Analysis & Planning

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Last Updated:12/8/2008 5:49:53 PM