Dr. P.V. Viswanath

 

pviswanath@pace.edu

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MBA 653: FINANCIAL REPORTING, ANALYSIS AND MODELING OF CORPORATE ACTIVITIES
Fall 2007
Profs. El Gazzar, Winch and Viswanath

73455: Tuesdays, 9:30 am to 11:55 am; Thursdays, 9:30 am to 12:30 pm at the New York campus, Room no. W512

Blackboard: http://blackboard.pace.edu
Office W416, Pace New York
Contact information: Prof. Samir El Gazzar: Office: W454; Tel: 212-618-6423; e-mail: selgazzar@pace.edu

Prof. Janice Winch: Office: W411; Tel: 212-618-6564; e-mail: jwinch@pace.edu
Office Hours: Tuesdays 1:30 pm – 5:30 pm, Thursdays 3:30 pm – 4:30 pm

P.V. Viswanath: Office: W416; Tel: 212-618-6518; e-mail: pviswanath@pace.edu
Website: http://webpage.pace.edu/pviswanath/ or http://www.pviswanath.com
Office hours: Mondays 3 p.m. to 6 p.m. and Wednesdays, 4:10 p.m. to 6:10 p.m. and by appointment
Note:  I am in my office in New York most of the week; let me know if you want to see me at other times.

   

Course Objectives

This is an integrated multidisciplinary course that covers the principles of financial accounting, financial analysis and decision modeling for business analysis. The primary objective of this course is to provide students with essential theoretical background and analytical tools necessary to use and analyze financial statements, to develop business models and to make sound financial decisions. More specifically, students will develop skills to:

  • understand accounting statements and financial reports
  • understand the characteristics of various financial markets
  • perform valuations and risk analyses on business projects and firms
  • use modeling to optimize business and financial decisions
  • simulate business and financial operations

Course Text

Computer Use and E-mail Policy:

Please check your e-mail and Blackboard website on a regular basis. For finance materials, see the MBA 653 finance website. You may e-mail the instructors for consultation. We check e-mail practically everyday, so in most cases, you should get a speedy response to your question.

Course Requirements

Class Attendance and Participation

Class attendance is mandatory and is highly recommended. This is for two reasons: one, you will understand the material much better if you attend the class sessions; two, modifications to the class schedule will be announced in class and/or on the BlackBoard website. In any case, you should consult fellow students on what was done during the class time that you missed, and collect handouts for that day's session. Another reason for regular attendance is that classroom participation will help your grade. Participation means answering questions and making intelligent comments. You should also bring a calculator to all class meetings.

You should also read the Wall Street Journal and/or the business section of the New York Times on a regular basis. Some exam questions will be based on current newspaper and magazine articles that are related to course material. Hence you should cultivate and improve your ability to read newspaper articles critically. If you do not already subscribe to the Wall Street Journal, you can do so online from the MBA 653 finance website.

In finance class sessions, there will be classroom exercises, short quizzes, or assignment of additional work. If you miss a class session during which we have such a classroom exercise, or additional work is assigned, your grade will be adversely affected for this reason as well. (Of course, it goes without saying that missing quizzes will affect your grade adversely.) We will sometimes do learning exercises in class; doing them can help you substantially in understanding the material. We often also give credit for participation in these classroom exercises.

Assignments, Project, and Working with Teams

There will be a group project, which is a critical part of the course.  Details regarding this project will be posted on the class website.

The team project submitted must also include a listing of which parts of the project were worked on by which team members.  Whether or not a given team member worked on a specific part of the project, s/he must be familiar with the entire project that is turned in.  It is expected that each team member will have a copy of the final version of the submitted assignment; if any team member does not have a copy of the final assignment and/or s/he is not familiar with any part of the submitted assignment, that team member's grade for the project may be reduced. 

You may also use teams for joint learning and study -- that is up to the members of each team. Teams may also want to assign members on a rotating basis to keep track of whatever is posted on the Web. However, each student is separately responsible for the material that is put up on the Web. Failure of the designated team member to fulfill his/her duties will not absolve any team member of the responsibility to keep up-to-date vis-a-vis class activities on the Web, or off.

Finance: The main purpose of the Finance assignments is to make sure that you understand the material, and to prepare you for the exams.  Details regarding the assignments can be found on the MBA 653 website or will be given out in class. All assignments should be turned in by email.

Modeling: Homework will be assigned on a weekly basis and some will be collected for credit. Homework will be collected 4-5 times. It should be done individually and submitted to Digital Dropbox. No late homework will be accepted, but one lowest homework score will be dropped.

Academic Integrity

Any student taking this course is presumed to agree to abide by the school policy on academic integrity, as described on page L-52 of the Graduate Catalog 2006-2007. Please obtain a copy of the catalog and familiarize yourself with the policy.

Disability Policy

School policy regarding disabilities is described on page L-56 of the Graduate Catalog. You can contact R. Raskin, the disabilities coordinator at 212-346-1526 or by email at rraskin@pace.edu. Information can also be found on the University webpage.

Exams

Finance: There will be a midterm exam and a final. Exams are closed book, but you will be allowed to bring in one 8.5" x 11" sheet of paper containing whatever material you wish (two sides). For example, you may want to write out formulas on these sheets. More details on the nature of the exams can be found on the FAQ page.  If you miss an exam without being excused, you cannot get any credit for that exam.  University policy allows make-ups only for serious personal illness or death in the family, for which documentation may be required.  You can look at past exams and solutions on my website; however, the actual format of the exams may differ substantially from those of previous terms. Please bring your own calculators to the exams; PDAs, however, are not allowed.  Get in touch with Prof. Viswanath regarding any question you may have regarding the exams, or the course in general. More information regarding the take-home final will be provided during the course.

Modeling: Final exam will be open book, open notes and will be done on the computer. You will asked to build and submit simulation and mathematical programming models done on Excel.

Short Quizzes (Finance only)

Prof. Viswanath may give short in-class quizzes.  There can be different kinds of questions on these quizzes e.g. definitions, short questions and media articles.  Some examples of these can be found at the on Practice Problems page on Prof. Viswanath's website -- click on the appropriate topic, and you will find the definitions and short question examples at the top of the page.

Study Aids

Practice Problems (Finance only)

You can find practice problems and other study aids at the textbook website.

Media Articles ( Finance only)

On my webpages, you will find recent media articles.  From time to time, Prof. Viswanath will add to this list.  There are several reasons why you should look regularly at these pages.  

  • Prof. Viswanath will be posting interesting and recent articles to this directory.  As such, it will be a useful way for you to keep abreast of topical issues (in addition to your regular perusal of the Wall Street Journal.)
  • Prof. Viswanath will pose questions on the subject matter of several of the articles.  These questions will be good preparation for the media article based questions on the exams.
  • You can draw on the articles for classroom discussions.
  • These articles and the appended questions are useful preparation for job interviews.

The password, necessary to access the Media Articles section will be announced in class, and can also be found at the Blackboard website. In case of emergency, you can contact Prof. Viswanath for the password.

Course Timetable

9/6, Thurs

PV Chapters 1, 2: Principles of Finance

9/11, Tues

PV Chap. 4: Time Value of Money

9/13, Thurs

Rosh Hashana no classes

9/18, Tues

SE Financial Statement Analysis
        
Introduction to Financial Statements: Function and Content.

-        
Income Statement
-        
Statement of financial Position
-        
Statement of Cash Flows  

9/20, Thurs

PV Chaps. 5: Life Cycle Planning, Chap. 7: Valuation

9/25, Tues

SE   Accounting Cycle:
-        
Cash versus Accrual Accounting
-        
Recording and Adjustments
-        
Preparation of Statements  

9/27, Thurs

SE Merchandising Operations:
       
- Inventory Systems
       
- Cost of Goods sold
       
- Gross Margin
       
- Inventory Valuation

10/2, Tues

JW- Ch. 16:  Introduction to Simulation Modeling

10/4, Thurs

SE  Receivables:
-        
Creation of Receivables
        
-     Uses of Receivables (Assignment and Factoring)  

10/9, Tues

SE   Operational Assets: Tangible/Intangible
-        
Acquisition
-        
Disposal
-        
Operating and Capital Expenditures 

10/11, Thurs

PV Chaps. 10, 12: Risk and Optimal Portfolio Selection

10/16, Tues

JW- Ch. 17:  Simulation Models in Finance including Financial Planning, Determining Value at Risk, Options Pricing

10/18, Thurs

SE  Sources of Capital: Equity Capital
-        
Accounting for Equity Capital
-        
Common and Preferred Stocks
-        
Earnings Per Share
-        
Stock Options           

10/23, Tues

JW- Ch. 17:  Simulation Models in Finance (continued)

10/25, Thurs

PV Chaps. 8-9: Valuation

10/30, Tues

JW- Ch. 14:  Introduction to Optimization Modeling Product Mix Example, Using Excel Solver, Sensitivity Analysis

11/1, Thurs

PV – Chap 16: Capital Structure

11/6, Tues

SE   Sources of Capital: Debt
-        
Current Liabilities
-        
Long Term Debt
-        
Contingencies and Off-Balance Sheet Risk

11/8, Thurs

PV – Chap. 15

11/13, Tues

JW- Ch. 15 (15.6):  Linear Programming Applications in Finance Investment Strategy, Cash Flow

11/15, Thurs

Samir El-Gazzar

11/20, Tues

JW- Ch. 15 (15.8):  Nonlinear Programming Models including Portfolio Optimization

11/22, Thurs

No class Thanksgiving

11/27, Tues

PV – Chap. 16, 17: Capital Structure and Corporate Strategy

11/29, Thurs

PV – Chap. 11: Options; Chaps. 13, 14

12/4, Tues

JW- Review, Work on Project

12/6, Thurs

JW- Modeling Final Exam

12/11, Tues

PV Chap. 16: Capital Budgeting/ Review

12/13, Thurs

Final Exam on Accounting and Finance sections

12/18, Tues

Presentations

Grades

Your final grade will be determined as follows:

Factor  Impact on grade
Accounting 25%
Finance 30%
Modeling 20% from Homework & Final Exam
Project 25%

Letter grades will be assigned as follows:  

Course Grade Quantitative Class Score
A, A- 90%-100%
B+, B, 80%-89.99%
B-, C+ 70%-79.99%
C 60-69.99%
F 0-59.99%

Note that the minimum and maximum quantitative scores for plus and minus refinements to the letter grades will be at my discretion. These will be partly determined by the distribution of student scores within each letter grade category.   We place a high value on effort; at my discretion, we will raise your grade one notch if we feel that you have tried hard to satisfy all the requirements of the course.

Prerequisites:

MBA 651 is a prerequisite.

  1. Ability to manipulate equations
  2. English composition: An ability to write a report using basic principles of English grammar and composition

Data Cards

On the index card handed out in class, please fill in the information requested below.  Make sure to number the item that you are responding to.  Leave space on the top right hand side for a photograph.

  1. Name
  2. Home and Work Phone number; Fax number, if any
  3. Email address, other than at pace.edu (for my convenience).  (Note that I will send you email only to your Pace email address)
  4. Functional expertise/interest in business administration (e.g. accounting, finance, personnel administration)
  5. Work experience, if any (provide particulars of what your duties were)
  6. Previous knowledge of finance (if any)
  7. Interests outside of business management (such as languages, music, etc.)
  8. What spreadsheet program do you know? Where did you learn it, and when?