BADM 622
Financial Accounting, Reporting and Analysis
Spring 2002
Dr. Dick Riley
Office: B&E 303
Phone: 304-293-7849
E-mail:
richard.riley@mail.wvu.edu
Class Meetings: MW 6:00pm – 8:50pm, 441 B&E
Office Hours: MW 5:30pm – 6:00pm
MW 8:50pm – 9:30pm (With notice)
Other Times – By Appointment
Course Prerequisites: Acceptance into MBA program
Course Description: The course encompasses the following topics:
(1) Development and preparation of financial statements, including the balance
sheet, income statement, statement of retained earnings and statement of cash
flows.
(2) Investigation of the underlying conceptual/theoretical foundation of
accounting information.
(3) Analysis of business transactions, including operating, investing and
financing activities and their affect on financial statements.
(4) Analysis of financial statements as a basis for decision making, including
assessing the quality of the financial statements.
Required Text: Ingram and Baldwin, Financial Accounting: Information for Decisions,
4th Edition
Supplemental Reading:
The Wall Street Journal and Other Business News Sources
Extensive Use of Internet Sites Discussed in Class
Course Objectives: In general, BADM 622 is concerned with the production and analysis
of financial information, information used by external stakeholders for planning, control
and decision making. Upon completion of BADM 622, EMBAs should understand
financial statements, understand how business transactions affect financial statements,
understand how accepted accounting choices affect the numbers presented in financial
statements and analyze financial statements as a basis for decision making.
The initial portion of BADM 622 includes a conceptual introduction to assets, liabilities,
stockholders equity, revenues and expenses as well as the impact of operating, investing
and financing transactions on cash flow, income determination, the balance sheet and
retained earnings.
In addition, many transactions can be accounted for using alternative methods that are
considered “generally accepted accounting principles (GAAP)” by the accounting
profession. As a result, financial statements and related disclosures for different
companies may appear different when, in fact, they are economically equivalent.
Therefore, to understand the numbers contained in financial statements, one must
understand the process by which accounting numbers are generated. In some cases, the
choice of accounting policies is affected by ethical considerations. When applicable,
these ethical considerations will be discussed during classroom sessions.
Finally, because financial accounting and disclosure are only a portion of the information
set utilized by decision-makers, the course will include a financial statement project
where companies in the same industry are compared. As part of this project, students are
required to analyze financial statements for one company and gather additional
information from sources other than the financial statements. Details related to this
project will be provided later in the course.
Attendance Policy: Regular attendance at all class periods is very important to your
success in comprehension and application of the course material. Attendance at all
classes is expected.
Grading Policy:
(1)
(2)
Exam
Project
Total
Points
100
100
200
The Accounting Model
Financial Statement Analysis
The following grading scale will be used to assign grades at the end of the semester:
Grade
A
B
C
D
F
Interpretation
Excellent
Good
Satisfactory
Poor
Points
180
160
140
120
Below 120
Percentage
90%
80%
70%
60%
Below 60%
Exams: Exams will cover the material presented in the required text and classroom
discussion.
Financial Statement Project: As part of the learning experience, EMBA participants will
analyze financial information for one public company. This project will proceed in
phases where EMBA teams (of two / three persons) analyze the balance sheets, income
statements and statements of cash flows of the assigned companies. Students will
download copies of the companies’ annual reports. The annual reports will be
supplemented with investment analyses from Standard & Poors and Value Line, recent
news stories from the financial press and the internet, industry and key competitor
information from various sources and recent quarterly information from EDGAR
(available on the internet). Students will be provided with a series of questions and the
responsibility to analyze the information and present a formal business analysis related to
the investment potential of the company.
Topical Outline and Assignments
The Accounting Model
Class
Chapter Description
Periods
1, 2, 3
1 – 3, 5-6 The Accounting Model
Introduction: Financial Statement Project
4
1 – 3, 5-6 The Accounting Model Exam
Financial Statement Analysis
5, 6, 7
8, 9 Introduction to Panera / Starbucks
Financing Activities
Analysis and Quality of Financial Reporting
7, 8, 9
10, 11 Investing Activities
Analysis and Quality of Financial Reporting
9, 10
12, 13 Operating Activities
Analysis and Quality of Financial Reporting
11
Groups Financial Statement Analysis Presentations
(Joint
25 minutes per presentation
Session)
West Virginia University is committed to social justice. I concur with that commitment and expect to foster a nurturing
learning environment based upon open communication, mutual respect, and non-discrimination. Our University does
not discriminate on the basis of race, sex, age, disability, veteran status, religion, sexual orientation, color, national
origin or any other basis. Any suggestions as to how to further such a positive and open environment in this class will
be appreciated and given serious consideration.
If you are a person with a disability and anticipate needing any type of accommodation in order to participate in this
class, please advise me and make appropriate arrangements with Disability Services at 293-6700.
Exam 3-6-02