BUSINESS FINANCE 7750
HEALTHCARE FINANCE
Course Syllabus
3 Credit Hours – Spring Semester 2016
TR 9:35–10:55AM / 210 Gerlach Hall
Instructor:
Phone:
Office:
E-Mail:
Office Hours:
Dr. Bill Rives
(614) 292-2979
312 Fisher Hall
rives.4@osu.edu
By appointment only
TA:
Phone:
Office:
E-Mail:
Office Hours:
Chris Kvale
Phone, office, e-mail and
office hours to be posted
COURSE DESCRIPTION
This course provides an introduction to the field of healthcare finance. 7750 is designed
to follow PUBHHMP 7620 (Health Services Finance I) in the graduate program in Health
Administration in the Ohio State College of Public Health. 7620 provides an introduction
to financial and managerial accounting for the healthcare industry. 7750 is cross-listed
with PUBHHMP 7621 (Health Services Finance II) in the MHA program.
The major focus of 7750 is financial management. Key topics include:
• Time value analysis (time value of money)
• Financial risk and required return
• Long-term debt financing
• Equity financing and securities markets
• Capital structure and the cost of capital
• Capital budgeting
• Project risk analysis
• Lease financing and business valuation
Financial management is designed to provide managers with the financial tools to make
better financial decisions. Major tools include time value analysis and financial risk and
required return, but these are not the only tools in common use. Applying financial tools
in the most effective manner requires a working knowledge of financial and managerial
accounting. In effect, accounting information forms the statistical foundation for much of
business financial analysis.
A major focus of financial management is the analysis of capital (investment) projects –
projects designed to take an organization into new markets, expand or add new product
and service lines, strengthen an organization’s competitive position, reduce operational
risk through diversification and enhance financial performance. These projects must be
financed with debt and / or equity securities, which pulls the markets for debt and equity
financing into the discussion. Capital projects also are subject to different forms of risk,
which must be identified, measured and managed – the focus of project risk analysis.
COURSE OBJECTIVES AND CORE COMPETENCIES
Upon successful completion of this course, you should be able to:
1.
Evaluate streams of cash flows using time value analysis.
2.
Explain the logic behind the Capital Asset Pricing Model (CAPM) and apply CAPM
to determine required rates of return.
3.
Describe the different debt instruments available for business financing.
4.
Describe the system of credit ratings for debt securities and explain the importance
of these ratings to both lenders and borrowers.
5.
Value a debt security and explain how the result should be interpreted.
6.
Describe the investment banking process and the market for equity financing.
7.
Value a common stock and explain how the estimated value should be interpreted.
8.
Determine the component costs and the overall (enterprise-wide) cost of capital for
a business organization and explain how these costs should be interpreted.
9.
Describe the role of capital budgeting in business organizations.
10. Prepare an elementary capital budgeting analysis.
11. Explain the difference between sensitivity and scenario analysis and the pros and
cons of each technique.
12. Conduct a capital project risk assessment.
13. Explain how lease financing affects a corporation’s financial statements.
14. Conduct a simple lease analysis from the perspective of the lessee.
15. Explain the process of business valuation and conduct a basic valuation analysis.
These talents support the following MHA Competencies – MHA 7, 8, 10, 21, 23 and 24.
COURSE MATERIALS AND RESOURCES
Required Course Text
Louis C. Gapenski
Healthcare Finance:
An Introduction to Accounting and Financial Management
Fifth edition, Health Administration Press, 2012
(ISBN 9781567934250)
Each student must own a copy of the text (no sharing). We do not support earlier
editions of the text, which can differ significantly from the current edition.
Business Finance 7750 Course Syllabus / Spring 2016
Page 2
Required Calculator
You will need a calculator for this course capable of performing basic time-valueof-money (TVM) calculations. Financial calculators enable you to perform these
calculations using pre-programmed functions. In contrast, scientific (statistical)
calculators require you to enter values manually into mathematical formulas.
If you already own a scientific (statistical) calculator, there is no need to purchase
a financial calculator unless you prefer the convenience of pre-programmed TVM
functions. You will not be at a disadvantage without a financial calculator.
Carmen Website
The course has a website on Carmen. All course materials (apart from the text,
and unless otherwise indicated in class) can be found on the website. Be sure to
check the website frequently for new postings.
Among other course resources, the website houses the text chapter quizzes (see
Course Requirements, below) and the text chapter PowerPoint slides.
CLASS FORMAT
Most lectures are presented in a discussion format, usually organized around questions,
problems and practical exercises drawn from the text, reading assignments and current
events. Lectures are designed to engage students and promote broader participation in
class discussion. Participation in class discussion is a great stimulant for learning.
Some lectures may be presented with PowerPoint slides. When used, the slides will be
posted to Carmen. Guest speakers may be added to the mix from time to time to enrich
topic discussion. Notice will be posted to Carmen when a speaker has been scheduled.
COURSE EXPECTATIONS
While the topics covered assume no prior accounting or finance coursework, the course
will be taught at the graduate level. Both the work required and the pace of the course
should prove challenging. Readings from the text are assigned each week, and may be
accompanied by articles from professional journals and periodicals, industry reports and
working papers, and other limited-distribution or unpublished material. All supplemental
reading material will be posted on Carmen, with appropriate prior notice. In addition to
regular reading assignments, you will be required to take an online quiz (on Carmen) on
each text chapter covered, complete and submit a problem assignment for each chapter
and prepare answers to chapter problems assigned for class discussion.
We expect you to manage the workload of this course in a professional manner, coming
to class prepared, contributing to class discussion, and demonstrating a commitment to
learning and personal development. Should you have a problem with the course during
the term, and want to speak with someone, we encourage you to seek our assistance.
Business Finance 7750 Course Syllabus / Spring 2016
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COURSE REQUIREMENTS
Chapter Quizzes
(course grade weight = 30% applied to the average score on all quizzes assigned)
You will have an opportunity to complete a quiz on the material in each text chapter we
cover. These quizzes are designed to assist your learning and your exam preparation.
Each quiz contains 12 questions based on chapter topics. Quiz question banks employ
both multiple-choice and true-false questions. The quiz time limit is 30 minutes (strictly
enforced). You will take quizzes on Carmen using the Carmen quizzing tool.
Each quiz will be available on Carmen for a limited time period (“quiz window”). Missed
quizzes may not be rescheduled; however, solely at the instructor’s discretion, a missed
quiz may be dropped for reasons beyond a student’s control that prevented the student
from taking the quiz during the quiz window. Under no circumstances will a student be
excused from a quiz that could have been taken.
Each quiz may be taken twice; if you do take a quiz twice, you will earn the higher of the
2 scores. Because questions for each quiz are drawn at random from a larger question
bank, no 2 quizzes will be exactly the same. Once a quiz window closes, you will have
an opportunity to review the questions you missed on each quiz you took.
Chapter quizzes should be completed on an individual basis (no group efforts!).
Dates and times associated with quiz windows can be found on Carmen.
Problem Assignments
(course grade weight = 40% applied to the average score on all assignments)
Each text chapter covered contains a set of end-of-chapter problems. These problems,
which can be found immediately following the end-of-chapter questions, are designed to
illustrate the application of basic tools and techniques of analysis to common situations.
A selection of these end-of-chapter problems will constitute a problem assignment. You
will be asked to solve the problems assigned and submit your solutions for grading prior
to the class for which the problems are assigned. Problems assigned for each chapter
can be found on the syllabus (see Course Schedule, below).
Each completed problem assignment should be posted to the Carmen Dropbox by 5:00
PM ET on the date shown on the Course Schedule (below). Be sure to save a copy of
your solutions for class discussion.
Problem assignments will not be graded solely for content. We are equally interested in
the fact that you “made the effort” and your solutions appear reasonably complete and
are easy to follow (good clarity, well formatted). We will discuss the assignment grading
scheme in class. You can check your solutions during class discussion of the problems.
Business Finance 7750 Course Syllabus / Spring 2016
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Final Exam
(course grade weight = 30% applied to the overall exam score)
You will take a comprehensive final exam at the end of the course. The exam will cover
text chapters 9-15 and chapter 18, plus supplemental reading assignments and material
from class discussion not contained in the text.
The exam is designed to assess your understanding of key concepts and your ability to
work independently to apply tools and techniques of analysis to practical problems.
Exam format, procedures and ground rules will be discussed in class toward the end of
the term. The exam may be offered online (on Carmen) and proctored at the University
Testing Center, an approach many students prefer for the greater scheduling flexibility.
TA RESPONSIBILITIES
The TA assigned to this course will be available to meet with students (as needed) and
to lead group review sessions for students who need help with the course material.
All questions concerning Carmen – to include quizzes, the Dropbox, and other Carmenbased resources – should be directed to the TA.
The TA may assist with scoring assignments; however, the instructor will assign all final
grades. Questions concerning grading should be directed to the instructor, not the TA.
ACADEMIC MISCONDUCT
•
In accordance with University Faculty Rule No. 3333-5-487, all instances of alleged
academic misconduct must be reported to the Committee on Academic Misconduct,
which recommends appropriate sanctions to the Office of Academic Affairs.
•
We aggressively pursue violations of University standards on academic conduct.
DISABILITY SERVICES
•
The Office of Disability Services (ODS) verifies students with specific disabilities and
develops strategies to meet their needs. Students requiring accommodations based
on identified disabilities should contact the instructor at the beginning of the term to
discuss their particular needs. Students with a specific disability are encouraged to
contact ODS to explore potential accommodations available to them.
POLICY ON EXTRA CREDIT
•
No student may complete “additional work” for extra credit without the permission of
the instructor.
Business Finance 7750 Course Syllabus / Spring 2016
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POLICY ON CLASS ATTENDANCE
•
You are expected you to attend class on a regular basis.
•
Should circumstances warrant missing class, you should notify the instructor with an
explanation of your absence.
•
While attendance is not separately graded, you can expect failure to attend class on
a regular basis – in particular, missing more than a few classes – to have an adverse
effect on your performance in the course and ultimately, on your course grade.
POLICY ON THE USE OF ELECTRONIC DEVICES IN CLASS
•
Cell phones may not be used in class at any time.
•
During class, your cell phone must be set to SILENT (not vibrate) or turned OFF.
•
No calculator that is part of a cell phone may be used on an exam.
•
Laptops and tablets may be used in class only with the instructor’s permission.
•
Lectures and other presentations may not be recorded (audio or video).
•
Any electronic device not mentioned elsewhere in this section may be used in class
only with the instructor’s permission.
•
This policy does not apply to electronic devices used for medical reasons.
•
The instructor may amend this policy at any time, should circumstances warrant.
Business Finance 7750 Course Syllabus / Spring 2016
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COURSE SCHEDULE
Class
Dates
Activities – Topics – Requirements
TUE
JAN 12
Course Administration and Introduction
THR
JAN 14
Time Value Analysis
Discussion of course topics, requirements, policies and procedures
TUE
JAN 26
1. Read Chapter 9 before class on THR JAN 14
2. Review Chapter 9 before class on TUE JAN 19, THR JAN 21 and TUE JAN 26
3. Download the Time Value Analysis Problem Set (Carmen) and work Problems
1 & 2 before class on THR JAN 14 – Bring the Problem Set and your solutions
th
to Problems 1 & 2 to class on the 14 (solutions will not be collected)
4. Chapter Problem Assignment:
a. Answer Problems 1, 2, 3, 4, 7, 12, 13 (pages 323-325)
b. Post your solutions to the Carmen Dropbox by 5:00PM ET, WED JAN 27
c. Be prepared to discuss your solutions in class on THR JAN 28
THR
JAN 28
IMPORTANT: Beginning THR JAN 14, bring your calculator / tablet / laptop
to every class should you need to crunch numbers
TUE
FEB 2
Financial Risk and Required Return
TUE
JAN 19
THR
JAN 21
THR
FEB 4
TUE
FEB 9
THR
FEB 11
TUE
FEB 16
THR
FEB 18
TUE
FEB 23
THR
FEB 25
TUE
MAR 1
1. Read Chapter 10 before class on TUE FEB 2
2. Review Chapter 10 before class on THR FEB 4
3. Chapter Problem Assignment:
a. Answer Problems 1, 2, 5, 6, 7 (page 363-365)
b. Post your solutions to the Carmen Dropbox by 5:00PM ET, MON FEB 8
c. Be prepared to discuss your solutions in class on TUE FEB 9
Long-Term Debt Financing
1. Read Chapter 11 before class on THR FEB 11
2. Review Chapter 11 before class on TUE FEB 16
3. Chapter Problem Assignment:
a. Answer Problems 1, 4, 5, 6, 7 (pages 405-407)
b. Post your solutions to the Carmen Dropbox by 5:00PM ET, WED FEB 17
c. Be prepared to discuss your solutions in class on THR FEB 18
Equity Financing and Securities Markets
1. Read Chapter 12 before class on TUE FEB 23
2. Review Chapter 12 before class on THR FEB 25
3. Chapter Problem Assignment:
a. Answer Problems 2, 3, 6, 7, 9 (pages 442-443)
b. Post your solutions to the Carmen Dropbox by 5:00PM ET, MON FEB 29
c. Be prepared to discuss your solutions in class on TUE MAR 1
Business Finance 7750 Course Syllabus / Spring 2016
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COURSE SCHEDULE
Class
Dates
THR
MAR 3
TUE
MAR 8
THR
MAR 10
TUE
MAR 15
Activities – Topics – Requirements
Capital Structure and the Cost of Capital
1. Read Chapter 13 before class on THR MAR 3
2. Review Chapter 13 before class on TUE MAR 8
3. Chapter Problem Assignment:
a. Answer Problems 1, 3, 4, 5, 6 (pages 482-484)
b. Post your solutions to the Carmen Dropbox by 5:00PM ET, WED MAR 9
c. Be prepared to discuss your solutions in class on THR MAR 10
Spring Break – NO CLASS
THR
MAR 17
TUE
MAR 22
THR
MAR 24
TUE
MAR 29
THR
MAR 31
TUE
APR 5
THR
APR 7
TUE
APR 12
THR
APR 14
TUE
APR 19
The Basics of Capital Budgeting
1. Read Chapter 14 before class on TUE MAR 22
2. Review Chapter 14 before class on THR MAR 24
3. Chapter Problem Assignment:
a. Answer Problems 4, 5, 7, 8, 9 (pages 524-528)
b. Post your solutions to the Carmen Dropbox by 5:00PM ET, MON MAR 28
c. Be prepared to discuss your solutions in class on TUE MAR 29
Project Risk Analysis
1. Read Chapter 15 before class on THR MAR 31
2. Review Chapter 6 before class on TUE APR 5
3. Chapter Problem Assignment:
a. Answer Problems 2, 3, 4, 5, 6 (pages 563-565)
b. Post your solutions to the Carmen Dropbox by 5:00PM ET, WED APR 6
c. Be prepared to discuss your solutions in class on THR APR 7
Lease Financing and Business Valuation
1. Read Chapter 18 before class on TUE APR 12
2. Review Chapter 18 before class on THR APR 14
3. Chapter Problem Assignment:
a. Answer Problems 1, 2, 3, 4, 5 (pages 673-675)
b. Post your solutions to the Carmen Dropbox by 5:00PM ET, MON APR 18
c. Be prepared to discuss your solutions in class on TUE APR 19
Business Finance 7750 Course Syllabus / Spring 2016
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COURSE SCHEDULE
Class
Dates
THR
APR 21
Activities – Topics – Requirements
Course Wrap and the Final Exam
1. Looking back – What did you gain from this course?
2. Looking forward – Introduction to PUBHHMP 7622 next semester
3. Online Course Assessment
4. Final Exam requirements and procedures
We reserve the right to correct errors in this document at any time during the course, with appropriate
notice.
Supplemental reading assignments can be found on Carmen.
Additional reading assignments may be posted at any time during the course, with appropriate notice.
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