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Course Assignments:
Week 16
May 17, 2007 AT 5:00
pm FINAL EXAM - ALL CHAPTERS COVERED!
Week 15
May 10, 2007 Test III
Returned - Chapters 11 - IN LIBRARY
212
- Finish Spreadsheet
- Read Chapter 11
- Cash Flows and Risk
- Incremental Cash Flows, Sunk Costs and Opportunity Cost
- Capital Budgeting
- Evaluating Capital Budgeting Projects
- ALL SPREADSHEETS MUST HAVE:
- Name on the sheet to be printed
- Name on the file sent
- Be able to be printed on one page, if possible (and readable)!
Week 14
May 3, 2007 Test III - Chapters 7,
9 and 10
- After the test work on Capital Budgeting Spreadsheet
- ALL SPREADSHEETS MUST HAVE:
- Name on the sheet to be printed
- Name on the file sent
- Be able to be printed on one page, if possible (and readable)!
Week 13
April 26, 2007 - Company Analysis Paper Due
Today - Finish Chapter 10
- Read Chapter 10
- Payback period (and Discounted)
- Net Present Value (NPV)
- IRR - Internal Rate of Return
- Modified IRR
- Profitability Index
- Homework on Capital Budgeting - Problem 10.1 a, b
c, d, and e in class, 10 points.
- The Post-Audit and other issues
Week 12
April 19, 2006 - Chapter 9:
Weighted Average Cost of Capital
- Problems 7.1 - 7.8 and Problem Set 3 will be finished up during
the first half hour of class.
- Read Chapter 9
- The Cost of Debt
- The Cost of Preferred Stock
- The Cost of Common Stock - CAPM, DCF, Bond + premium
- WACC and risk, Mistakes to avoid.
- Homework on WACC: 9.1 - 9.6. 20 points total.
- Company Analysis Paper Due April 26, 2007
Week 11
April 12, 2007 - Tests
Returned and Chapter 7:
Stock Valuation
- Review the test
- Read Chapter 7: Stock Valuation
- Key Characteristics
- Stock Valuation
- DCF Method
- Do problems 7.1 - 7.4 in class for 10 pts.
- P/E & P/CF methods - Damodaran
online
- Supernormal Growth Model (also called Non-constant growth)
- Preferred Stock - do problems 7.4-7.8 in class -
for 10 points.
- Problem set 3 - Due about a half an hour into
class on April 19 - 15 points.
- Stock Valuation for your company - See
handout from today in class. You may hand
in the Analysis for me to look at, if you wish.
- Note that you may wish to begin your SWOT
analysis. I will not have you turn in the SWOT analysis.
Week 10
April 5, 2007 - TEST II -
Chapters 2, 5 - 6 and 12 (AFN) - Last year's exam is on the h: drive
Entrepreneurship Day - Dinner in Liff with
conversation beginning at 6:00 pm - Dinner at 6:30
PLEASE RSVP Jane Sandoval (or me) ASAP for
dinner! THANKS!
Week 9
March 29, 2007 - Chapter 6: Bond Valuation and Chapter 7 -
Stock Valuation
- Problems 5.1, 5.2, 5.3, 5.4, 5.5 and 5.6
due Wednesday, March 28 in the k: drive.
- Analyze the five year trend of the financial
ratios of your company. Compare the financial ratios of your company with
the industry. A paragraph for the each of the categories of ratios
would be fine (trend and industry ratios). Due March 30 for 20 pts.
- Chapter 6: Bond Valuation and yields
- Bond value - combining the annuity and present value formulas
- Semiannual Coupon Bonds
- Default risk
- Do problems 6.1 - 6.6 in class for 10 pts.
Week 8
March 22, 2007 - Chapter
5: - Returns and Risk
- Due today - FIVE
articles about your company (one point each). A copy of the Value Line
page for your company (5 pts) and 5 years of financial ratios for your
company side by side with the industry ratios for 5 pts.
- Chapter 5: Returns - dollar value and percentage rates
- Standard Deviations and Portfolio Analysis
- Portfolio Risk: diversifiable risk versus market risk
- Beta, calculations, risk premiums and the SML equation (CAPM)
- We will work
on problems 5.1, 5.2, 5.3, 5.4, 5.5 and 5.6 due Wednesday, March 28 in the
k: drive.
- For March 29 you will analyze the
five year trend of the 5 financial ratio categories of your company for 10
pts.
- Also for March 29 you will compare
the 5 financial ratio categories of your company with the industry's ratios
for 10 pts.
March 12-16, 2007: SPRING BREAK - RELAX AND ENJOY!
Week 7
March 8, 2007 - Continue with Chapter 2 and
begin Chapter 5: - Returns and Risk
- Chapter 2: continued - Payment Amount
Annuities will be covered (a periodic payment - this allows us to calculate your car
loan, mortgage payment, etc.).
Uneven cash flows, EARs and Amortization will be covered tonight.
Problems on EARs, APRs, and "Doubling"
Amortization Table on the k: drive
Problem Set 2 done and Excel 2 on the k: drive
Week 6
March 1, 2007 - Chapters 12: Forecasting
continued and Chapter 2: Time Value of Money
- REMEMBER - Due Wednesday, February 28 by midnight - Spreadsheet #4
(Problem #12 in Chapter 4 for 10 points, part e and f is optional.)
- Finish Chapter 12 - Forecasting
- Do Chapter 12, Problem #6, p. 409 for 10 pts.
- Problem Set 1 done in class, handed in and the Excel
Spreadsheet deposited in the k: drive.
- Due Wednesday, March 7 by midnight Spreadsheet
#12 (Problem #10 in Chapter 12 for 10 points) in the k: drive
please.
- Begin Chapter 2 - Time Value of Money - Bring a Financial Calculator - The MOST
important Chapter of the Course, also called Discounted Cash Flow (DCF), the Time Value of
Money is based upon when cash flows are received. The basic components
are:
- Cash flow time line
- Present Value
- Future Value
- Number of time periods
- Interest rate
Week 5
February 22, 2007 - Test I: Chapters 1, 3, 4 and 12
- Read Chapter 12: Forecasting and Planning.
- Forecasting
- Additional Funds Needed (AFN) - Not on Test #1
- Percent of sales method
- Due Wednesday, February 28 by midnight - Spreadsheet #4
(Problem #12 in Chapter 4 for 10 points, part e and f is optional.)
Week 4
February 15, 2007 - Analysis of Financial
Statements. Remember to turn in Spreadsheets #3 to my k: drive before Wednesday at
midnight.
- Please bring your Chapter 1 problems (1.1-6)
- Do Spreadsheet #3 (Problem #
10 in Chapter 3 for 10 points). Deposit in the k drive by Wednesday, Feb. 21 by
midnight.
- Read Chapter 4: Analysis of Financial Statements - continued
- Financial Ratios - continued
o Asset Management Ratios
o Debt Management Ratios
o Profitability Ratios
o Market Value Ratios
- Read Chapter 12: Forecasting and Planning.
- Forecasting
- Six steps in the financial planning process
- Pro forma statements
- Additional Funds Needed (AFN) - Not on Test #1
- REVIEW FOR TEST #1 - See last year's test on the h: drive.
- For February 15: Complete an Industry Analysis for your
company along with the current year's industry ratios. You may want to include answers to
the following: Explain the industry in which your company is operating. What is its
condition? Are customers buying now? Is competition cut-throat? Are the economic
conditions excellent for the industry to grow? Or is it tough to find the supplies to
produce? DO YOU think that gasoline prices might affect the industry? (or do the analysts)
What about other key resources, supplies or employees? 10 pts
- Keep looking for 5 years of financial statements for your company.
Week 3
February 8, 2007 - Chapter 4: Analysis of Financial
Statements.
- EVA and MVA - Economic Value Added
- FCF - Free Cash Flow - the crucial aspect of a company for financial analysts.
- Taxes
- Look at problems 3.7 and 8 (10 points).
- Do Spreadsheet #3 (Problem #
10 in Chapter 3 for 10 points). Deposit in the k drive by Wednesday, Feb. 16 by
midnight.
- Read Chapter 4: Analysis of Financial Statements
- Financial Ratios
o Liquidity Ratios - Current and Quick Ratio
- Introduction to:
o Asset Management Ratios
o Debt Management Ratios
o Profitability Ratios
o Market Value Ratios
Week 2
February 1, 2007 - Chapter 3 Financial Statements and finish Chapter
1.
- Yield curve assignment due. Company assignment due - what
company did you choose?
- Finish Chapter 1 - PowerPoint and material.
- Working on problems 1.1-6 in the text. We will work on
these in class. Reading them over and "attempting" them will help you
prepare for class.
- Discuss interest rates, the different premiums and how the Fed is
connected to interest rate determination through changing the money supply.
- Do the Spreadsheet 1 for
Chapter 1 for class next week for 10 points. Please put the completed file on my k:
drive, saved using your name as the file name.
- Chapter 3: Financial Statements - we will begin the basics of the Balance Sheet,
Income, Cash Flow Statements and taxes tonight.
- Balance Sheet - the Basics
- Income Statement - the Basics plus Retained Earnings
- Cash Flow Statement - a Fresh Look
Week 1
January 25, 2007 - Introduction to the course and
an Overview.
- Read Chapter 1 - look over the PowerPoint (which is available on the h: drive) - the
basic overview.
- Find a U.S. Treasure yield curve in the Wall Street Journal around page C2-C4 (in
the Bond Section usually). This is not in EVERY WSJ. For 5 points, photocopy (or bring in a copy) of the curve.
(Bring to next class.)
- Note the interest rate equation. We will finish up the chapter and discussing the
equation next week.
- For February 1: You are to turn in a word processed,
double spaced, two paragraph analysis of what the company you chose produces. In the
second paragraph, you are to identify into which industry the company fits and list the
five largest competitors for 5 points. List the SIC and NAICS codes too.
- If you have any questions or problems, please feel free to let
me know.
- Begin to look for 5 years of financial statements for your company.
- FYI - to learn how to use the k (or h) drive off campus, click here.
- If you DID NOT sign up for the Wall Street Journal and
wish to, click HERE.
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email: drew at drewparkes.com
Last Update: May 11, 2007
By Andrew L. H. Parkes, Ph. D.