San Jose State University BUS.173B – Case Problems in Finance
Preliminary Syllabus – Fall 2006 - Revised June 1, 2006
Please also download Excel Day by Day Schedule, Daily Agendas, Project Descriptions, and Exam Preparation Descriptions

Please review selected comments from Learning Summaries from previous classes that will be available on WebCT. Consensus:

This class is a lot of work, BUT you learn a ton of practical tools and techniques. Most students have fun during the final exam project.

This class is an “application” course and requires significant preparation time and your full attention during class time. You are intelligent adults with choices to make. You cannot not do the work and expect a passing grade. There are reading and research assignments, and cases that are due before they are discussed in class. Refer to the textbook for help. Once we know the final class sizes, changes may be made to the schedule.

PREREQUISITES
BUS. 170 required with C or above. This will NOT be waived under any circumstances and transcripts may be requested. Proof will be required of anyone adding the class. Failure to meet the pre-requisite will cause a student to be dropped from the class.

BUS. 173A with C or above.  This may be waived only for students with a high grade (A or high B) in 170, but it is highly recommended that you take 173A first, or concurrently, as you may need to work harder in an already challenging class if you have not taken it.  

It is very hard to fail this class but those who do usually had Cs in 170 and D or F in 173A once I reviewed that.

COURSE DESCRIPTION

The objective of financial management is to maximize the intrinsic value of the firm (Present Value of Future Cash Flows), in other words maximize Shareholder wealth by maximizing stock value.  Thus a financial manager must understand not only what determines a firm's value, but also what actions, will increase value and what actions will not. This course is an application course for financial management concepts and tools you have been exposed to in previous classes. It will bridge you towards being ready to use the tools in a job setting. It will also get you more comfortable with making and defending (through research) your assumptions. Most students come to class expecting to be told what to do and to be given “THE right answer”. When you forecast the future, there is NO right answer, only good or bad assumptions. That is why we do sensitivity analysis of our assumptions.

The course is presented from the perspective of the corporate CFO, and will investigate management decisions from a practical viewpoint. Given the current environment, ethical issues will be explored, as well as the plans for addressing those (time allowing). The instructor is a former Chief Financial Officer.

Taking the Financial Managers' point of view in a firm, we will explore the following by means of real Case situations in various types of industries and sizes of companies:

Assessment of Financial Condition, Financial Strategy, Cash Requirements. Sensitivity Analysis

Decisions regarding capital projects, such as acquisitions. Focus mostly on a growth industry; Valuing, Financing etc.; Debt or equity financing? Cost? Look at it from investor and company point of view.

Influencing Business Operations. Emerging industry. The role of the Finance function. Going Public? Should you or shouldn't you? When is the right time.?

COURSE FLOW

1. Student either reads assigned material and summarizes it before class in which it is discussed or prepares the case analysis to be discussed . Summaries and case analyses submitted by e-mail. Extra Credit  Points will be awarded for “presenting” homework.
2. Professor leads discussion on the review topic or case, possibly reviewing one or two examples of her own as needed for the newer material. Active student participation is expected. We have several in-class brainstorming exercises, and case analyses.
3. At the end of each module, the concepts will be tested in review exams

4. We will review exam answers in the session following. Exams will not be returned due to past ex-post-facto cheating incidents but you can review them during office hours, within 2 weeks of the exam. See Office Hours Policies below
 
LEARNING OBJECTIVES

Gain practical application experience, rather than theoretical view of Finance topics.  Further, gain understanding of the relationships of finance to other functional areas in a company, and to providers of financing.

This class is a Finance transition course in managerial finance for graduating seniors.  The focus is on financial strategy and internal operations in companies.  The format of the class will start with lecture-type concept review and pre-view of new material and sharing of information by the professor based on her 20 years of experience at all levels of Financial and Operational Management.  For each module, there will also be homework and packaged material as well as use of real company information from on-line sources.

It will cover information and problems solved from first level analyst up to CFO. The focus will be on real world problem definition and solving using class group exercises, HBS cases, real companies and team project presentations as a background for discussion.

The philosophy of the course is:  Practice, not observation, makes perfect. The knowledge gained by practicing will make you successful in the first post-graduation finance job (as well as earning a good grade in this class).

Further, this class will get you more comfortable with the lack of “one single answer” and making and justifying assumptions. The three projects increase your need to make judgments about future trends, rather than just calculating something.

(If you take this course and Mr D’s Practicum and 173C, you should be well prepared for the world of work.)

SCHEDULE AND GRADING
A daily schedule of class agenda and Homework dues dates will be available for download in Excel. Any REVISIONS will be announced in class and a new version posted on WebCT for downloading.

Grading will be based on end of session points using a combination of % of max, % of highest score, and "Break Points" (to be explained in class). Except for the two exams and the evaluation points on the Final Exam Presentation the points are “yours to lose” Summary of grading events (See below for detail on each):

 
Each submission will have its folder on WebCT to facilitate easy assessment  of “on time”

I grade from A+ to F, although in this particular class I have only had to give a handful of “non-passing” grades in 8+ years. No Incomplete grades will be given without serious and compelling reasons.  Serious and compelling does not include having a bad grade. Documentation is required for serious and compelling medical reasons. Grades are NOT negotiable, so please do not even ask.

• Factors such as homework submission on time, class participation, improvement on examinations, rank in class, or others will be considered in the grading process.
  
   

PROJECT 1
Project 1 is an analysis and a presentation of company performance and future funding needs forecast. Please download the detailed Project Requirements and Company List (substitutions in the same category are allowed with permission of Professor). Teams may be self selected or will be assigned if majority of class so wishes.  Minimum and maximum team size will be a function of class size.

PROJECT 2
Project 2 is an assessment of synergies and a forecast with sensitivity analysis to value a company as an acquisition target. Please download the detailed Project Requirements. Suggested company list will be provided from news items. You may stay with your team or choose a new team.

FINAL EXAM PROJECT
Final Exam Project is preparing start-up financials, including a 12 month build up of expenses and revenues and 3-5 year forecast of IS/BS/CF to use for valuation. Sensitivity analysis of your assumptions. Please download the detailed Project Requirements and a sampling of the types of start-ups presented by past students (at least two have been “real” start ups). You may stay with your team or choose a new team.

STUDENT RESPONSIBILITIES

1.   Read the assigned material and prepare cases ahead of the class session in which they will be discussed.

2.   If you miss class, you should get the assignments and class notes from one of your peers. Do not ask the professor: you should have been in class.

3.   You must take the exams, and do final examination presentations when they are scheduled.  Problems with taking the exams on the appropriate date must be discussed with the instructor before the date.  If you must miss one for a legitimate, and approved reason, that examination's value will be transferred to the nextExam.  Under very rare and unusual circumstances, a make-up examination may be arranged.  This highly unlikely occurrence will be at the totally arbitrary discretion of your professor.

4. If you wish to drop the class, you must do so by the drop deadline. The professor is not automatically dropping anyone.
   
    

STEPS TO MAKING THE GRADE:

1.   Attend class pro-actively and ready to learn and ask for clarifications when something is unclear. If you have a question others will, too. All questions are good questions.

2.   Complete ALL assignments. Do not expect to “learn by viewing/hearing” (i.e. by listening to the professor talk), expect that you must “learn by doing” (i.e. reading all the materials, asking questions when you don’t understand, doing the assigned cases..  Remember: You get out of a class that which you put into it. Effort (=time spent in and out of class) has its rewards in terms of learning outcomes and exam performance as well as opportunities to shine in a job setting. Professor can facilitate your learning, but you must do the work.

3. Allocate enough time in your schedule to accommodate Steps 1 and 2. This is absolutely critical. If you are taking more than 4 classes (=30 hour minimum commitment per week) and working and have family or social obligations etc, this class will be hard.

POLICIES & PHILOSOPHIES
A. Exam Policies - Fall 2006 (two double classes facilitate 150 minute in class exams instead of take home exams)

1.       Both in class exams will require you to download and review/read material ahead of the exam. The exams will cover the material in the module.

 

2.       You will be allowed to bring your Chapter Summaries (see Homework)

 

3.       Exam will be calculations and essays. If possible they will be in the Computer Lab. OR, if everyone has access to a Laptop, the exam will be in the classroom with answers sent upon completion on the wireless network.

 

4.       Exam grading is final unless I make addition mistake. Exams must be reviewed during the office hours reserved for that. No Exam reviews during Exam week.

B. College of Business Policies and Procedures, which will be enforced.

To ensure that every student, current and future, who takes courses in the Boccardo Business Center has the opportunity to experience an environment that is safe, attractive, and otherwise conducive to learning, the College of Business at San José State has established the following policies:

Eating

Eating and drinking (except water) are prohibited in the Boccardo Business Center.  Students with food will be asked to leave the building.  Students who disrupt the course by eating and do not leave the building will be referred to the Judicial Affairs Officer of the University.

Cell Phones

Students will turn their cell phones off or put them on vibrate mode while in class.  They will not answer their phones in class.  Students whose phones disrupt the course and do not stop when requested by the instructor will be referred to the Judicial Affairs Officer of the University.

Computer Use

In the classroom, faculty will allow students to use computers only for class-related activities.  These include activities such as taking notes on the lecture underway, following the lecture on Web-based PowerPoint slides that the instructor has posted, and finding Web sites to which the instructor directs students at the time of the lecture.  Students who use their computers for other activities or who abuse the equipment in any way, at a minimum, will be asked to leave the class and will lose participation points for the day, and, at a maximum, will be referred to the Judicial Affairs Officer of the University for disrupting the course.  (Such referral can lead to suspension from the University.)  Students are urged to report to their instructors computer use that they regard as inappropriate (i.e., used for activities that are not class related).

Academic Honesty

Faculty will make every reasonable effort to foster honest academic conduct in their courses.  They will secure examinations and their answers so that students cannot have prior access to them and proctor examinations to prevent students from copying or exchanging information.  They will be on the alert for plagiarism.  Faculty will provide additional information, ideally on the green sheet, about other unacceptable procedures in class work and examinations.  Students who are caught cheating will be reported to the Judicial Affairs Officer of the University, as prescribed by Academic Senate Policy S98-1. 

C. My Class Room Policies
1. Due their assistance in adhering to COB policies and to the demonstrated – by past classes – learning/attendance benefits it affords (download statement) unless both sections disagree, classes will be run as back to back sessions with the “break” at the end. Thus the classes will run as follows:
1:30 to 3:50/55 (with “break” from 3:55 to 4:15)
5:30 to 7:50/55 (with “break” from 7:55 to 8:15)

2. Class will go full time unless “team time” for presentation preparation has been assigned on the schedule as is the case ahead of each of the presentations. If something runs shorter than anticipated, an unscheduled class exercise that will further enhance learning will be added unless team time was assigned for the remainder of the class on the schedule. In that case, team time starts early.

3. Short courteous “bio” breaks are allowed during the class EXCEPT during exams.

4. Courtesy to your class/team mates and the professor requires on-time arrival and informing the professor of early departures or missing class ahead of time (due to in class group exercises)

 

D. Office Hour Policies – Revised, Starting Fall 2006
1. Scheduled Office hours are 12:00 to 1:15 and 4:15-5:15 on Wednesdays. Professor lives in Auburn, California, about 150 miles away. Thus no appointments available other days.

2. “Unscheduled” Office hours may start as early as 11 am (subject to traffic/parking woes).

3. There will not be any office hours available by appointment or otherwise after the evening class under any circumstances.

4. Students with appointments always get priority

5. To review your exams, you MUST make an appointment by e-mail so professor can pull your exam and prepare for the meeting. This appointment must begin at least 15 minutes before the end of office hours.

6. The week following exam grading extra scheduled hours will be available for appointments starting at 11 am. Exams MUST be reviewed at that time barring hardship. In any case exams must be reviewed by last day of classes for this class.

7. NO exam review will be allowed during Exam week office hours. That is a busy week and hours are reserved for other issues.

7. Final Exam Presentation pre-review appointments are recommended for all teams. Teams can send a representative. Extra office hours starting at 11 am will be made available.

E. Workload, Pre-requisite, and Professional Certification Exam Encouragement, and Miscellaneous Policies
1. Due to having taken 6 Six-Hour closed book exams on everything ever learned at the end of high school at 18 - all essays and problems, as well as several multi-hour multi-test professional certification exams also in essay/problem format I believe that it is fair to expect you to have learned a lot of the material covered in previous classes, so that we can move on to the application and bridging to the real word.  That may require extra review on your part. That is also why the pre-requisites will be enforced.

2. The work in this class requires significant time (all A&F professors expect 2-3x the hours in class outside of class, meaning 5-7.5 hrs a week on an average, some weeks a bit more, some a bit less) that some students do not have due to course overload, family/social, or work commitments.

3. Anyone taking a professional certification exam (CPA, CMA, CFM, CFA, NASD Securities Licenses, Enrolled Agent, etc) during the semester will be exempted from the in-class exam following that exam (with proof of having taken the professional certification exam).

 

4. Even the “practice” – Projects 1 and 2-  presentations are expected to be professional (ready for the “real world”) rather than slapped together in the last minute. Peer evaluations always point out the ones that aren’t.

5. It is the students' responsibility to demonstrate proficiency and understanding of the subject matter through class contributions and team presentations. An important element of the course is demonstrating a thorough understanding of key financial ratios, terms and abbreviations used in business (i.e. WACC, ROI, PE Ratio, Market Cap, Beta etc.)

6. Teams may be self selected unless otherwise requested by the majority of the class. There will be a mandatory pre-review meeting with the professor. There will be peer review of participation.

F. Post Class References
1. I will be happy to serve as a reference for jobs or for graduate school (assuming, of course, that you demonstrate the right attitude during the semester – grades are less important than attitude.

2. Please provide a resume and some lead time, and, reminder of which classes you have taken with me which semester (unless the last one) so I can locate your records.

Short Bio of Professor
Education:
MBA, Harvard Graduate School of Business Administration
BA, Williams College, Political Economy

Earned various professional certifications during corporate career (CMA, CIRM, CPIM, PMP)

Corporate Experience:

CFO, Vision Capital, a Transatlantic Venture Capital Fund

COO/CFO, MAP
CFO, Metorex International
VP, Finance FDC EFS
Sector Controller & Director, Finance, Technology Sector, Raychem (RYC acquired by Tyco)
Other logistics, finance and business development (acquisition) positions.
Global responsibilities.

 

Consulting Experience:

Independent consulting: Business Plans, Business Plan PowerPoint Presentations, Operations and Strategy Reviews, Board Reporting package design etc.

Big firm consulting: Touche Ross & Co (San Francisco), McKinsey & Co (Copenhagen), Bain & Co (London)

Relevant current Volunteer Activities:
Current Treasurer, Arts Council of Placer County (ACPC)

Current Co-Chair Sacramento, Harvard Business School Alumni Association of Northern California.