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AIM 6344 Financial Statement Analysis

Course
Sections 002 and 501
Professor Daniel A. Cohen
Term Fall 2010
Time Section 002: AIM 6344.002 W 4:00pm-6:45pm / SOM 2.717
&Location Section 501: AIM 6344.501 W 7:00pm-9:45pm / SOM 2.901

Professor’s Contact Information


Office Location SOM 4.422
dcohen@utdallas.edu. Please use dcohen@utdallas.edu to reach me. I will not use
Email Address
eLearning email.
Office Hours
Wednesday 2:30-3:45PM or by appointment.

General Course Information


Pre-requisites,
Co-requisites, & AIM-2301, AIM-2302, MATH-1325, MATH-1326, MATH-2333
other restrictions
The primary objective of the course is to advance your understanding of how
financial statements are analyzed and used in various decision making and
investment settings. In particular, the course provides a framework and the tools
necessary to analyze financial statements.

Conceptually, the course emphasizes that producers and users of financial


statements have different objectives and informational needs. At the same time, the
Course Description
course is applied in that it teaches students how to analyze actual financial
statements data to make informed business decisions and assessments.

The course is challenging, yet manageable. It assumes a good command of basic


financial accounting and finance topics (present value calculations and
discounting). To reap significant benefits, you will have to make a significant
investment of time and energy.

In this course, you will learn how to

1. Integrate industry and business strategy analyses into financial statement


analysis,
2. Critically assess the quality of the financial statements and make
“adjustments”, when needed, to various financial statement items,
Learning Objectives
3. Use financial ratios to draw inferences about risk and profitability,
4. Develop expectations about a firm’s future operating, financing, and
investing activities, and capture these expectations in forecasts of future
financial statements,
5. Assess firm value based on common valuation models and techniques.

"Financial Statement Analysis & Valuation" by Peter Easton, Mary Lea McAnally,
Patricia Fairfield, Xiao-Jun Zhang, and Robert Halsey. 1st or 2nd edition ; ISBN of
Required Textbook the second version: 978-1-934319-39-0

Suggested Texts, Lecture notes, class readings and homework assignments (eLearning). Please
Readings & check eLearning daily for class announcements and assignments.
Materials
This syllabus describes a tentative plan to achieve the course’s objectives. Keep in
Other mind, however, that we may have to modify this plan during the term to better meet
the course’s objectives.

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Course & University Policies
Your course grade will reflect how you perform relative to your peers on
two in-class, non-cumulative tests, homework/case assignments, and
class participation. The weights of the tests, assignments and class
participation are as follows:

Tests: 70%.
Homework assignments: 20%
Course grade determination
Class participation: 10%

In case of a disagreement with how a test/homework is graded, you have


one week, from the day grades are posted to appeal. Appealing means
submitting the original paper with a written description of your
contention. However, I reserve the right to review your entire test. Thus,
your grade may go up or down.

The tests are in-class and non-cumulative. They may include multiple
choice questions, short problems, and open-ended questions. If you
cannot attend class on the day on which we have a test, notify me in
Tests
advance. At my discretion, either a make-up test will be scheduled, or
the weight of the test will be re-allocated to the other components of
your course grade.

Homework assignments and due dates will be announced on eLearning.


Late work will not be accepted. A homework assignment may be a
textbook problem, a set of questions related to an article discussed in
class, a case study, etc. You may discuss an assignment with your
Homework
classmates, but each student will compose his or her answer. Identical
assignments will receive identical score of zero.

I do not offer extra credit assignments.

Each student is expected to come to class prepared. Prepared means


reading the assigned chapter before class and completing any assigned
work.

High quality participation includes not only answering my questions,


but also making comments and observations pertinent to issues raised in
class, as well as asking questions that help clarify your classmates’
understanding of course topics. If you do not participate at all, 10% of
Participation
your course grade will be zero. I will not be taking attendance, but
please be aware that without attendance there is no participation. If you
miss a class, you are responsible for getting class notes and finding out
what was covered.

I will be posting the relevant lecture notes on eLearning prior to each


class. You are responsible to download and print the relevant lecture
notes for every lecture and bring them to class.

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You can expect that I will (1) arrive on time for class, (2) be prepared
and organized for every class, (3) listen attentively, actively, and
respectfully to whomever is speaking in class, (4) maintain equity in all
course policies, (5) meet with you outside of class on an individual or
group basis at a mutually agreeable time, and (6) respond to your
suggestions to make this class more challenging, stimulating, and
enjoyable.
Classroom Citizenship
I expect that you will (1) arrive on time for class, (2) complete the
course assignments and be prepared for every class, (3) listen
attentively, actively, and respectfully to whomever is speaking in class,
(4) thoughtfully participate in class discussion, (5) refrain from activities
that can distract other students such as chatting, checking email or
browsing the internet during the lecture, and (6) suggest ways in which I
can make this class more challenging, stimulating, and enjoyable.

Off-campus, out-of-state, and foreign instruction and activities are


subject to state law and University policies and procedures regarding
travel and risk-related activities. Information regarding these rules and
Field Trip Policies
regulations may be found at the website address
Off-Campus Instruction and
http://www.utdallas.edu/BusinessAffairs/Travel_Risk_Activities.htm.
Course Activities
Additional information is available from the office of the school dean.
Below is a description of any travel and/or risk-related activity
associated with this course.

If you experience any problems with your UTD account you may send
Technical Support an email to: assist@utdallas.edu or call the UTD Computer Helpdesk at
972 883-2911.

The University of Texas System and The University of Texas at Dallas


have rules and regulations for the orderly and efficient conduct of their
business. It is the responsibility of each student and each student
organization to be knowledgeable about the rules and regulations which
govern student conduct and activities. General information on student
conduct and discipline is contained in the UTD printed publication, A to
Z Guide, which is provided to all registered students each academic
year.
The University of Texas at Dallas administers student discipline within
the procedures of recognized and established due process. Procedures
are defined and described in the Rules and Regulations, Series 50000,
Board of Regents, The University of Texas System, and in Title V,
Student Conduct & Discipline Rules on Student Services and Activities of the university’s Handbook
of Operating Procedures. Copies of these rules and regulations are
available to students in the Office of the Dean of Students, where staff
members are available to assist students in interpreting the rules and
regulations (SU 1.602, 972/883-6391) and online at
http://www.utdallas.edu/judicialaffairs/UTDJudicialAffairs-HOPV.html
A student at the university neither loses the rights nor escapes the
responsibilities of citizenship. He or she is expected to obey federal,
state, and local laws as well as the Regents’ Rules, university
regulations, and administrative rules. Students are subject to discipline
for violating the standards of conduct whether such conduct takes place
on or off campus, or whether civil or criminal penalties are also imposed
for such conduct.

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The faculty expects from its students a high level of responsibility and
academic honesty. Because the value of an academic degree depends
upon the absolute integrity of the work done by the student for that
degree, it is imperative that a student demonstrate a high standard of
individual honor in his or her scholastic work.

Scholastic Dishonesty, any student who commits an act of scholastic


dishonesty is subject to discipline. Scholastic dishonesty includes but is
not limited to cheating, plagiarism, collusion, the submission for credit
Academic Integrity
of any work or materials that are attributable in whole or in part to
another person, taking a test for another person, any act designed to give
unfair advantage to a student or the attempt to commit such acts.

Plagiarism, especially from the web, from portions of papers for other
classes, and from any other source is unacceptable and will be dealt with
under the university’s policy on plagiarism (see general catalog for
details). This course will use the resources of turnitin.com, which
searches the web for possible plagiarism and is over 90% effective.

The copyright law of the United States (Title 17, United States Code)
governs the making of photocopies or other reproductions of
copyrighted materials, including music and software. Copying,
displaying, reproducing, or distributing copyrighted works may infringe
the copyright owner’s rights and such infringement is subject to
appropriate disciplinary action as well as criminal penalties provided by
Copyright Notice
federal law. Usage of such material is only appropriate when that usage
constitutes “fair use” under the Copyright Act. As a UT Dallas student,
you are required to follow the institution’s copyright policy (Policy
Memorandum 84-I.3-46). For more information about the fair use
exemption, see
http://www.utsystem.edu/ogc/intellectualproperty/copypol2.htm

The University of Texas at Dallas recognizes the value and efficiency of


communication between faculty/staff and students through electronic
mail. At the same time, email raises some issues concerning security and
the identity of each individual in an email exchange. The university
encourages all official student email correspondence be sent only to a
student’s U.T. Dallas email address and that faculty and staff consider
email from students official only if it originates from a UTD student
Email Use
account. This allows the university to maintain a high degree of
confidence in the identity of all individual corresponding and the
security of the transmitted information. UTD furnishes each student
with a free email account that is to be used in all communication with
university personnel. The Department of Information Resources at U.T.
Dallas provides a method for students to have their U.T. Dallas mail
forwarded to other accounts.

The administration of this institution has set deadlines for withdrawal of


any college-level courses. These dates and times are published in that
semester's course catalog. Administration procedures must be followed.
It is the student's responsibility to handle withdrawal requirements from
Withdrawal from Class
any class. In other words, I cannot drop or withdraw any student. You
must do the proper paperwork to ensure that you will not receive a final
grade of "F" in a course if you choose not to attend the class once you
are enrolled.

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Course Outline:
Below is tentative course outline . Any change to the course outline will be announced in class and/or
the class website. An updated version of the course outline will be posted if any change occurs.
These descriptions and timelines are subject to change at the discretion of the Professor.

Related Module From Book Homework Due


Week 1 08/25/10 Introduction Module 1
Week 2 09/01/10 Lecture 1 Module 1 and 2
Week 3 09/08/10 Lecture 2 Module 2 and 3 HW #1
Week 4 09/15/10 Lecture 3 Module 3 and 4 HW #2
Week 5 09/22/10 Lecture 4 Module 3 and 4
Week 6 09/29/10 Lecture 5 Module 5 HW #3
Week 7 10/06/10 Lecture 6 Module 5 and 6 HW #4
Week 8 10/13/10 Exam I
Week 9 10/20/10 Lecture 7 Module 7
Week 10 10/27/10 Lecture 8 Module 7 and 10 HW#5
Week 11 11/03/10 Lecture 9 Module 8 and 9 HW #6
Week 12 11/10/10 Lecture 10 Module 11
Week 13 11/17/10 Lecture 11 Module 11, 12 and 13 HW #7
Week 14 11/24/10 Lecture 12 Module 12, 13, 14
Week 15 12/01/10 Exam II