THE UNIVERSITY OF NORTH CAROLINA AT GREENSBORO
BRYAN SCHOOL OF BUSINESS AND ECONOMICS
MBA 602-01
Analysis and Interpretation of Financial Statements
Course Syllabus
Spring Semester 2009
Professor:
Office:
Phone:
Email:
Office Hours:
Evan Shough
Bryan 342
256-0127
emshough@uncg.edu
By Appointment
Purpose of Course:
MBA 602 is designed for students who have no academic background in financial
accounting and financial statement analysis. The primary purpose of the course is to
provide those students with an elementary understanding of financial accounting
vocabulary, concepts, techniques, and institutions. These elementary understandings are
necessary for students to move on into more advanced study within the Bryan School.
Course Objective:
1. To provide a basic, working vocabulary of financial statement analysis and
financial accounting;
2. To provide a basic understanding of how financial accounting relates to other
aspects of business, as well as to the broader arenas in which businesses operate;
3. To provide the tools and understanding necessary for the student to carry out,
interpret, and explain financial statement analyses of major corporations;
4. To provide some understanding of the relation among financial accounting,
financial statement analysis and international business;
Text:
Required:
Financial Accounting for MBAs (3nd Edition). Easton, Wild and Halsey. Cambridge
Business Publishers (2008). ISBN: 0-9787279-3-2.
Electronic Resource:
Blackboard will be used for this course. The sign-on site for Blackboard is
http://blackboard.uncg.edu. Students enrolled in this course will have access to the
applicable section of Blackboard. Updates of the Course Syllabus, if required, as well as
notes, solutions and other material deemed necessary will be posed to this site and
available for download.
Grading:
Course grades will be determined as follows:
Company Analysis Cases
Major Quizzes
Participation/Quizzes
Final Exam
The grading scale is as follows*:
A
AB+
B
BC+
C
CD+
D
DF
25%
35%
5%
35%
92% and above
90 – 92.99%
88 – 89.99%
82 -87.99%
80 – 81.99%
78 – 79.99%
72 – 77.99%
70 – 71.99%
68 – 69.99%
62 - 67.99%
60 – 61.99%
< 60%
*I reserve the right to curve grades at the end of the semester. I will only curve
grades up, never down.
Company Analysis:
Sometimes the best way to learn is to get your hands dirty. You will have a series of
take-home assignments based on an assigned company to analyze and apply some of the
different topics covered in the classroom. These exercises will also help you navigate
through corporate disclosures and financial statements and learn how to find the
information contained within them. We will also use these exercises to further discussion
in the classroom so assignments should be completed and ready to be discussed and
turned in before class begins.
Major Quizzes:
There will be quizzes given during class times. They are designed to test the student’s
knowledge of the material assigned for reading as well as covered in class. The format of
the quizzes will be multiple choice and/or short answer. It is anticipated that quiz
completion will require between 20 and 30 minutes. The quizzes will cover material
from the last discussion and/or the material assigned for that day.
There are no makeup quizzes. Please try to notify me at least 48 hours prior to the quiz.
Failure to notify me within 24 hours after the scheduled quiz will result in a quiz score of
zero. At the time of notification, I will determine whether to consider the absence
excused or unexcused and follow University policy. In the event you miss a quiz for
medical circumstances, you must provide me with written verification from the
appropriate source. I will drop the lowest quiz score so your 4 highest quiz grades will
each be approximately 9% of your total grade.
Participation:
Class participation is encouraged. Participation involves a) showing up to class b) being
prepared for class c) asking and answering questions during the lecture. Note that quality
and not quantity will count in the consideration of student comments.
Exams:
There will be a series of quizzes and a comprehensive final exam for the course. The
format will be determined before the exam and communicated to you before the exam.
Note: I do have a fondness for essays and written problems.
Recommended Homework:
This homework consists generally of exercises that are designed to increase student
understanding. Solutions to these exercises will be posted on Blackboard following the
class. The homework was picked to further strengthen your understanding of the
material. I encourage you to work in study groups to share information and
understanding with one another. I do fully expect that some of the homework will be
very difficult prior to the lecture, this is why I will not collect or grade this material, only
the quizzes related to the same topics. Due to time constraints I will generally only
discuss the homework when students ask.
Weather Policy:
In the event of a cold weather event (ice, snow), this class will strictly follow the
University schedule. The University posts on the web site the status of classes
(additionally, the area TV stations make announcement) when a weather event occurs.
Academic Integrity Policy:
Each student is expected to complete all requirements of this course in all respects in
conformity with UNCG’s Academic Integrity Policy. The paragraph below, which was
taken from this policy, highlights students’ responsibilities regarding academic integrity.
Students should recognize their responsibility to uphold the Academic Integrity Policy
and to report apparent violations to the appropriate persons. Students who do not
understand the policy or its application to a particular assignment are responsible for
raising such questions with their faculty member.
Other Comments:
While it is understood that graduate students have busy schedules that include business
conflicts, please exercise good judgment in missing class only when necessary. Part of
this responsibility is to understand that assignments will be accepted early, but no
assignment will be accepted late. There are no opportunities for extra credit in this
course.
Tentative Schedule:
Session 1: Introduction to accounting and financial statements
Reading: Modules 1 and 2, Appendices 1A and 2A, Handout
In-Class: Quiz over lecture and discussion.
Homework: E 1-22, 1-28, 1-30, 1-44, 2-21, 2-29, 2-34, 2-46, 2-47
Comments: Module 1 introduces financial accounting, looking at the ultimate outputs of
the system and introducing the basics of how the statements may be evaluated and used
in decision-making. Module 2 provides a deeper look at how those financial statements
are constructed and appendix 2A shows the traditional “debits and credits” of accounting
that ultimately lead us to the financial statements. This is your only exposure to the
debits and credits in this class, if you have an accounting background it may be helpful;
otherwise do not worry about learning the mechanics of accounting. The Handout shows
conceptually how to think about the elements of the financial statements and some of the
conventions used in analyzing transactions. Many on the concepts in the Handout will
relate to future discussions.
Session 2: Analyzing Income (Why Net Income isn’t the only thing that matters.)
Reading: Module 5, Appendix 5A
In-Class: Major Quiz #1
Homework: 5-22, 5-26, 5-27, 5-28
Comments: Module 5 breaks down the income statement and how we analyze and make
use of the components of the income statement.
Session 3: Analyzing the Balance Sheet – Operating Assets
Reading: Module 6
In-Class: Major Quiz #2
Homework: 6-12, 6-13, 6-27, 6-28, 6-32, 6-35, 6-39
Comments: Module 6 explores Operating Assets on Balance Sheet in depth. Some of the
ratios from Module 4 will also be discussed here in relation how we analyze the balance
sheet and income statement together.
Session 4: Analyzing and Reporting Debt
Reading: Module 8
In-Class: Major Quiz #3
Homework: 8-9, 8-10, 8-14, 8-18, 8-19, 8-23
Comments: This class examines how we finance a company using debt. One of the more
straightforward modules in the book, we look at pricing, recording and reporting
liabilities and its impact on the financial statements.
Session 5: Analyzing and Reporting Off-Balance Sheet Financing
Reading: Module 10
In-Class: Major Quiz #4
Homework: 10-10, 10-11, 10-19, 10-23, 10-24, 10-25
Comments: Follow up to Module 8, except this time we learn that not all assets and
liabilities are present on the balance sheet. This module shows how transactions give rise
to off-balance sheet financing, why managers want this, and how analysts can analyze
these transactions.
Session 6: Analyzing and Reporting Owner Financing
Reading: Module 9
In-Class: Major Quiz #5
Homework: 9-28, 9-30, 9-31, 9-33, 9-34
Comments: This class will look at the ins and outs of equity financing. We will look at
the different forms of equity and also some hybrid securities (part-equity, part-debt) and
how they impact the financial statements.
Session 7: Analyzing and Reporting Intercorporate Investments
FINAL EXAM
Reading: Module 7 (Not on Final Exam)
Homework: Study