Course Description

This course will look at the basic financial statements and financial analysis. The second part of the course will look at the basic decisions made by financial managers. We will look at financial instruments, valuation, capital budgeting, and financing.

Grade Composition

Quizzes 50%

Study Guides 15%

Research 15%

Homework 10%

Participation 10%

Grades are based on the total number of correct points achieved out of the total possible.

The above percentages represent an approximate distribution of the grading.

Online Homework and quizzes are due the week after the chapter is completely covered in class.

– There may be times when we do not get everything in the session covered. The chapter homework and quizzes are only due after the chapter is completed.

– Online assignments are due the night before the next class.

– Late assignments will receive a 10% penalty.

Offline Homework

Offline Homework and internet research is due the week after the chapter is completely covered in class.

– Assignments are emailed to the instructor

• Be sure to name the file correctly.

• Lname_section_bua321_HW#

– Late assignments will receive a 10% penalty.

Study Guide Assignment

Complete the study guide document in class.

Email this to the instructor the night prior to the next class.

Quizzes

• All exams are completed online at the PearsonMyLab site..

• You have approximately 3 minutes per question. (All multiple choice)

• Once you start the exam the clock is running. You cannot stop and comeback.

• Give yourself plenty of time to complete the exam.

• The exam must be completed by midnight the day before the next class meeting.

• As soon as the exam is completed you will receive your score.

• Review of the questions cannot take place until after the deadline has passed.

• Any technology challenges should be emailed ASAP.

Course format:

Review the flipped class video to reinforce the information about a flipped class format.

Student Assistance

• In compliance with Thomas More College policy and legislation requiring equal access, appropriate accommodations for students with disabilities are available.

• If you have a documented physical or learning disability for which you require special accommodations, please see Veronica Lubbe

Assistant Director of Academic Support Services – Administration Building room 3336

(859) 344.3521

• This includes students who have previously received accommodations at TMC.

Chapter 1: Financial Statements: An Overview

maze (māz), n. 1. An intricate, usually confusing network of passages, some blind and some leading to a goal. 2. Anything made up of many confused or conflicting elements. 3. A mental state of confusion or perplexity.

1) Map

a) A map helps its user reach a desired destination through clarity of representation.

2) Map or Mazea) A maze attempts to confuse its user by purposefully introducing conflicting elements and

complexities that prevent reaching the desired goal.

3) What things would you like to get from a Financial Statements as a Map?

a) Performance

b) Things that are owned

c) $ available for investing and paying bills

d) How efficiently the management team works

4) What are the challenges of Financial Statements?

a) Truthfulness

b) Completeness

c) Relevance

5) Usefulness

a) What are your thoughts on risk? Where does it come from?

i) What is risk?

ii) Are there different kinds?

iii) Are all companies impacted by the same kinds of risk? Equally?

b) What is the difference between cash and profit?

i) Profit is recognized when it is earned; cash may not occur at the same time.

ii) Expenses are recognized when they occur; cash may be paid early or later.

(1) Which is more important?

(a) WHY?

6) Exercise

a) Review first pages of annual report

i) What kind of information? Pg 10

ii) Anyone identified in the writing?

(1) Pg 14 & 15

(2) Pg 19

(3) Pg 22

iii) Volume of Information in Annual Reports

(1) Financial statements (45 to 49)

(2) Notes to the financial statements (50 to 81)

(3) Auditor’s report (pg 44)

(4) Five-year summary of key financial data (82)

(5) High and low stock prices

(6) Management’s discussion and analysis of operations (pg 21 to 40)

(a) Material included at the imagination and discretion of management

7) Preparation of Financial Statements

a) What is GAAP?

i) Rules. Why do we needs them?

b) What is the SEC?

(a) What is a (10-K)? 8K

8) What does globalization mean to you as an employee?

a) Is your work impacted by global factors

i) The tasks

ii) The equipment

9) What is the purpose of a company’s annual report?i) Picture of the companyii) Marketing to keep you as a shareholder or find someone to take your place.

b) Where can you find an annual report?i) Corporate Web site

(a) go to investor website for coorsii) Internet websites

(a) go to http://finance.yahoo.com

10) The Financial Statements

a) What do these statement show you?

i) Balance Sheet

(1) What you own and what you owe

(2) The assets acquired for the business and where you got the funds to buy them.

ii) Income Statement or Earnings Statement

(1) Control of expenses

iii) Statement of Cash Flows

(1) Cash generated by various decisions of management

iv) Statement of Stockholders’ Equity

(1) Residual owners

(2) How are the profits of the firm distributed

11) The Balance Sheet

a) : Take a minute to review the Balance sheet of the annual report.

i) Total assets?

(1) Total Current Assets

ii) Total Liability

(1) Total Current Liability

iii) Amount of Retained Earnings

iv) Pg 46 & 47

12) The Income Statement

i) Take a minute to review the income statement(1) What were the profit numbers?

(a) GPM(b) OPM(c) NPM(d) Interest expense

ii) Pg 45

13) The Statement of Cash Flows

(a) Pg 48

14) Exercise: Take a minute to review the statement of cash flows.

a) Cash flow from Ops

b) Investing?

c) Financing?

d) Non-cash expense

15) What does the Auditor’s Report tell you?

i) Auditor video

http://www.youtube.com/watch?feature=player_detailpage&v=Pitb4v9hRZc

b) Auditor’s Report

i) What do the following types of audit tell you?

(1) Unqualified reports

(a) clean

(2) Qualified reports

(a) Clean with restrictions

(3) Adverse opinion

(a) Bad

(4) Disclaimer of opinion

(5) Unqualified opinion with explanatory language

16) Look at the auditor’s report for Coors

a) What does the auditor say?

b) What kind of audit finding?

17) What do you get from the Management Discussion and Analysis (MD&A) pages?

a) Explanations

b) Reasoning for decisions

18) Exercise: Review Annual Report

a) Pg 21

i) Executive summary

b) Pg 22 sales and other operating expenses

19) What else needs to be done with financial statements?

20) What is meant by quality?

a) Completeness

b) Truthfulness

c)

21) What is meant by the matching principle?a) Matching the expenses of the firm with the revues they helped produceb) Critical principle; creates a mechanism to compare time frames

What about personal financial statements?

1) Financial Statement (Personal Form)a) Lets look at the statements.

i) cash flow statement worksheet

Living expenses

Balance sheet and Net worth

Exercise: Complete the above statements for yourself. Do not turn in!!