HARVARD UNIVERSITY EXTENSION SCHOOL MGMT E-2600: FINANCIAL STATEMENT ANALYSIS FALL 2015 SEMESTER - Preliminary Faculty Lecturer Teaching Assistant Ned Gandevani, MBA, PhD Office Phone: 617-603-6951 Cellular Phone: 617-910-6256 E-mail: Gandevani@fas.harvard.edu Office hours: Wednesdays 5 to 5:30 and 7:30 to 8 pm Mr. Jon D. Gezotis Phone: 617.501.1449 Email: gezotista@gmail.com Live online webinar: Sundays 8 pm - 9 pm EST Course Objective This course is designed to prepare students to interpret and analyze financial statements for tasks such as credit and security analyses, lending and investment decisions, and other decisions that rely on financial data. This course explores in greater depth financial reporting from the perspective of financial statement users. Students develop a sufficient understanding of the concepts and recording procedures and therefore are able to interpret various disclosures in an informed manner. Students learn how to compare companies financially, understand cash flow, and grasp basic profitability issues and risk analysis concepts. Students apply analytical tools and concepts in competitor analysis, credit and investment decisions, and business valuation. Ultimately, students who complete this course develop a more efficient and effective approach to researching, interpreting, and analyzing financial statements. Course Format The course format will be based on the assigned readings, exercises, problems and cases from the textbook. The homework and cases should enhance your understanding and comprehension of the material in the textbook. In addition, the cases should provide a link from the classroom to relevant business situations and problems.
Prerequisite Introductory financial accounting principles course (e.g., MGMT E-1000) or equivalent required; MGMT E-1600 and MGMT E-2020 helpful. Additional accounting/finance background and coursework will be extremely beneficial. It is desirable to have available your introductory financial accounting text for regular reference. Course Materials Required: Financial Statement Analysis & Valuation - 4e by Easton, McAnally, Fairfield, Zhang, and Halsey; Cambridge Business Publishers; ISBN: 978-1-61853-104-9. Optional: Understanding Financial Statements, 10th Ed., by Fraser and Ormiston. Pearson Prentice Hall 2013, ISBN 13: 978-0-13-265506-4; Harvard Coop Exams There will be a mid-term and final examination in this course. Exams will be worth 65% towards your final course grade. These exams will occur on the date indicated on the syllabus, unless otherwise noted. The midterm exam will be online. The final exam will be a take-home project that should be submitted on the date indicated on the syllabus. Note: the undergrad students will have a different take-home project from graduate students. Case Assignment Students are expected to review and prepare the case listed below. Assignment should be submitted to Canvas on the appropriate due date. These assignment will be worth 10% towards your final course grade. The following is a summary of the case assignments, learning objectives and discussion/due date: Number Case Name Core Concept(s) Due Date 1. The Home Depot, Inc. and Lowe s Companies, Inc. Financial Statement Analysis Analyze financial statements - Using the DuPont model to analyze operations at two retail companies. - Analyze profitability, asset efficiency, leverage, and cash flow. - Review both qualitative and quantitative information in the management, discussion and analysis section (MD&QA) of each company s 10- K s. - Analyze key financial ratios, and evaluation of short-term solvency, operating efficiency, capital structure and long term solvency, profitability, market measures. - Perform segment analysis. - Identify the strengths and weaknesses of the company. - Review the investment potential and creditworthiness of the company. 12/03/2015
Homework Assignments Students are expected to review and complete homework assignments using the information that is provided below. These assignments will be worth 25% towards your final course grade: Grading The maximum score in this class is 1,000 points. The categories, which contribute to your final grade, are weighted as follows. Assignment Points Weighting Homework Assignments 10 assignments for 25 points each. 250 25% Midterm Exam 30 30% Case Assignment 100 10% Participation Bonus Credit 50 5% Final Exam 350 35% Total 1050 105% Letter Grade Grade % A 94 100% A- 90 93.9% B+ 87 89.9% B 83 86.9% B- 80 82.9% C+ 77 79.9% C 73 76.9% C- 70 72.9% F Below 70% Disability Services Office The Extension School is committed to providing an accessible academic community. The Disability Services Office offers a variety of accommodations and services to students with documented disabilities. Please visit www.extension.harvard.edu/resourcespolicies/resources/disability-services-accessibility for more information.
Academic Honesty The Harvard University Extension School expects students to understand and maintain high standards of academic honesty. Examples of academic misconduct include, but are not limited to, the following: plagiarism, cheating and computer network abuse. All work submitted to meet the course requirements is expected to be the student s own work. In the preparation of work submitted to meet course requirements, students are expected to distinguish their own ideas and language from information derived from other sources. Without prior written approval by both instructors, students may not submit the same material for two courses. You are responsible for understanding Harvard Extension School policies on academic integrity (www.extension.harvard.edu/resources-policies/student-conduct/academic-integrity) and how to use sources responsibly. Not knowing the rules, misunderstanding the rules, running out of time, submitting "the wrong draft", or being overwhelmed with multiple demands are not acceptable excuses. There are no excuses for failure to uphold academic integrity. To support your learning about academic citation rules, please visit the Harvard Extension School Tips to Avoid Plagiarism (www.extension.harvard.edu/resources-policies/resources/tips-avoidplagiarism), where you'll find links to the Harvard Guide to Using Sources and two, free, online 15-minute tutorials to test your knowledge of academic citation policy. The tutorials are anonymous open-learning tools. Expectations and Assumptions It is important to your success in this course to remain current with the readings, homework and case assignments. Please be prepared to discuss the assigned readings, cases and homework. Homework, case assignments and examinations will occur on the date indicated on the syllabus. The submission of late case assignments or an unexcused absence from an examination will not be accepted. I will have office hours by appointment throughout the semester. My office hours in campus are 30 minutes before and after each class. Students Participation To help students to gain a better learning experience, I offer 50 points bonus credit for attendance and participation. Students do no need this to obtain a full credit for the course. However, it s offered as a bonus for those students who participate in one of the four ways listed below: 1. Weekly in person class attendance in campus. 2. Weekly online class attendance; must be active in chat room to gain any credit. 3. Weekly attendance and asking questions in Sections conducted by TAs, at least one per week. 4. Posting a detailed summary for each chapter with proper APA format in-text and end-text citations in Canvas Undergrad Students Students who have signed up as an undergraduate course will need to take Part A of the final exam only.
Lesson Plan WEEK DATE TOPIC READINGS ASSIGNMENT 1 9/02/2015 Framework for Analysis Chapter 1 and Valuation 2 9/09/2015 Review of Business Chapter 2 TBD Activities and Financial Statements 3 9/16/2015 Profitability Analysis and Chapter 3 TBD Interpretation 4 9/23/2015 Credit Risk Analysis and Chapter 4 TBD Interpretation 5 9/30/2015 Revenue Recognition and Operating Income Chapter 5 TBD 6 10/07/2015 MIDTERM ONLINE EXAM: Chapters 1,2,3,and 4 7 10/14/2015 Asset Recognition and Chapter 6 TBD Operating Assets 8 10/21/2015 Liability Recognition and Chapter 7 TBD Nonowner Financing 9 10/28/2015 Equity Recognition and Chapter 8 TBD Owner Financing 10 11/04/2015 Incorporate Entities Chapters 9 TBD 11 11/11/2015 Off-Balance-Sheet Financing 12 11/18/2015 Off-Balance-Sheet Financing and Forecasting Financial Statements 13 11/25/2015 Thanksgiving Break Chapter 10 Chapters 10 and 11 14 12/02/2015 Forecasting Financial Statements Chapter 11 Case Assignment due on 12/03/2015 TBD TBD 15 12/09/2015 Final Exam Review 16 12/16/2015 Due Date for Online and Take Home Parts of FINAL EXAM Final Exam Covers Chapters 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, and 11.