20201 MGM320 H5S LEC0101 syllabus PDF

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DEPARTMENT OF MANAGEMENT UNIVERSITY OF TORONTO MISSISSAUGA MGM320H5S LEC0101 Financial Statement Analysis and Interpretation Course Outline - Winter 2020 Class Location & Time Instructor Office Location Office Hours E-mail Address Course Web Site

Thu, 09:00 AM - 11:00 AM MN 3100 Alicia Damley KN L 1236 Thursdays 12 pm - 1 pm [email protected] https://q.utoronto.ca

Course Description This course will provide an understanding of financial reports, and their use for investment and management decisions. Cases will be used to enhance problem-solving skills and will integrate ideas from finance, management and financial accounting and other areas of study. The course focuses on the interpretation and use of financial statement data for the purpose of assessing the financial performance of a business operation, not on the technical details of accounting rules. [24L, 12T] Prerequisite: MGT120H5/MGM221H5, MGM222H5 Exclusion: MGT224H5, MGT322H5, RSM221H1, MGAC01H3. (SSc) Distribution Requirement: SSc

Course Objective The objective of financial statements is to provide information about the financial strength, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions. Readers of financial statements should be able to understand them and to develop a deeper appreciation of what the state of the company is from several perspectives, including operations, balance sheet strength and strategic direction. Reported assets, liabilities and equity are directly related to an organization's financial position and strength. Reported income and expenses are directly related to an organization's financial performance. The notes to the financial statements, the Management Discussion and Analysis (MD & A) and CEO's letter are all part of the financial report that students will be expected to be able to interpret by the completion of this course. On completion of this course you will: 1. Be able to read a full set of financial statements and understand the overall situation, direction and capacity of that company 2. Understand the role and limitations of financial statements as a source of information about companies and their prospects 3. Develop an understanding of the components of the financial statements and how to interpret specific accounts represented in those statements 4. Be able to describe key aspects of "quality of earnings" including how management decisions can affect this concept 5. Be able to compute and analyze financial ratios, and cash flow measures of operating, financing and investing performance of a company relative to key competitors and historical performance 6. Apply the financial statement analysis framework to a variety of decision contexts (E.g. Equity analysis, Credit analysis)

Textbooks and Other Materials Financial Statement Analysis & Valuation. Easton, McAnally, Sommers and Zhang. 5th Ed. Cambridge Business Publishers. ISBN 13: 978-1-61853-233-6

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Assessment and Grading Policies Type

Description

Due Date

Weight

Assignment

Group project: Company analysis #1

2020-02-13

20%

Assignment

Group project: Company analysis #2 - part A

2020-03-19

15%

Assignment

Group project: Company analysis #2 - part B

2020-04-02

15%

Final Exam

Final exam (Date TBA)

TBA

45%

Class Participation

Class Participation

5% Total

100%

Please be advised that requests to round grades up will not be accommodated and can be considered an academic offense. The grade earned by a student is the mark that will be entered into ACORN without exception.

Requirements and Criteria In addition to the Final exam, students will complete two group assignments, the second of which will be submitted in two parts. Each group will have approximately four members, and groups will be selected by the instructor. Group assignments are required to be submitted to Turnitin by the deadline. The final exam will consist of an annual report of a company, and students will be expected to analyze that company from the financial statements provided. The final exam will be an open book exam, and you will be permitted to bring one binder into the exam with you, plus a hardcopy of the textbook if you wish.

Conduct of Class For this course, you should be registered for a 2 hour lecture followed by a 1 hour "tutorial" (lecture will be in MN 3100 and the tutorial will be in MN 3190). The tutorial is compulsory and is an extension of the lecture - i.e. you essentially have a 3 hour lecture. Each week you will be assigned chapters from the textbook together with recommended problems from the end-of-chapter problem set. It is essential that you keep up-to-date with readings and practice problems as the course moves quickly. You will benefit greatly from having read the assigned readings before each class. Additional learning materials and cases may be discussed or distributed in class and/or on Quercus; you are also responsible for this material. You are expected to check Quercus regularly for course related material, including recommended problems, news articles, etc. You are responsible for all content posted on Quercus. Important announcements may be posted on Quercus periodically, so you are advised to check there frequently for updates. Each class will include lectures, audio-visual aids, discussion of assigned questions and problems and analysis of a company's financial statements relevant to the lecture material of that week.

Procedures and Rules Late Assignment(s): Assignments are due at the beginning of class on the date specified on the outline. If an assignment is late, the grade wil be reduced by 25% to 100% - i.e. a grade of zero may be assigned - the decision will be at the instructor's discretion. Re-marking requests: Note that for the protection of all students, the instructor may retain photocopies of tests. You should be aware that re-grading involves re-consideration of the performance on all components of the test or assignment, and therefore the original grade may be raised, lowered, or unchanged. Re-grade requests are very time-consuming for all parties and they are not to be viewed as an opportunity to bargain for higher grades, rather they are an appeal process reserved for special cases. Grading requests must be submitted within 1 week of assignments having been returned to students. If you anticipate missing an assignment deadline due to uncontrollable circumstances, you should contact the course instructor as early as possible, but within at least 24 hours to explain the situation. As described above, you must submit a Petition for Academic Accommodation, along with any additional documentation into the drop box of the Department of Management, located across from KN205 within one (1) week of the missed assignment deadline. The reallocation of grades, if any, for assignment deadlines

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missed for legitimate reasons will be made at the discretion of the instructor. The Department of Management Program Office, including all staff and faculty members, cannot and will not accept late assignments for course instructors. Once an assignment deadline has passed, students must contact the course instructor to coordinate the assignment submission (if the instructor will accept a late assignment). Final Exams: Final Examinations are scheduled, administered and governed by the policies set by the Office of the Registrar. Any student that is granted a deferral by the Office of the Registrar will be required to write a deferred examination at the next exam-writing session scheduled by the Office of the Registrar. Students should note that the deferred exam may not follow the same format as the exam given in the regular writing session. Students who cannot write a final examination due to illness or other serious causes must file anonline petition within 72 hours of the missed examination. Original supporting documentation must also be submitted to the Office of the Registrar within 72 hours of the missed exam. Late petitions will NOT be considered. If illness is cited as the reason for a deferred exam request, a U of T Verification of Student Illness or Injury Form must show that you were examined and diagnosed at the time of illness and on the date of the exam, or by the day after at the latest. Students must also record their absence on ACORN on the day of the missed exam or by the day after at the latest. Academic Misconduct: Students should note that copying, plagiarizing, or other forms of academic misconduct will not be tolerated. Any student caught engaging in such activities will be subject to academic discipline ranging from a mark of zero on the assignment, test or examination to dismissal from the university as outlined in the academic handbook. Any student abetting or otherwise assisting in such misconduct will also be subject to academic penalties. Normally, students will be required to submit their course essays to Turnitin.com for a review of textual similarity and detection of possible plagiarism. In doing so, students will allow their essays to be included as source documents in the Turnitin.com reference database, where they will be used solely for the purpose of detecting plagiarism. The terms that apply to the University's use of the Turnitin.com service are described on the Turnitin.com web site. Standard of Conduct in this Course: Since this course is part of a degree designed to give you a broad understanding of the world of business, we aim to run the course in a way which will be consistent with the world of business - where many of you will spend your working lives. We strive to provide accurate information, quality materials and good service, consistent with our obligations to maintain the high academic standards of the Department of Management at the University of Toronto Mississauga In return we expect that you will conduct yourself in a way that prepares you for the world of work. 1. We start on time, so please do not arrive late and disrupt others. 2. Leaving class early is also disruptive to your colleagues and will not be permitted unless you have made prior arrangements with the instructor. 3. Turn off your cell phone. 4. Keep up to date. Make sure that you know the class schedule. Check on the course web page for updates and posted materials. 5. During the class, respect the learning opportunities of others. Don't distract others by chatting to your neighbour. Our expectation is that you will not only contribute in class to your own learning, but also that of others.

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Course Schedule Date

Topic

2020-01-09

Class #1: Introduction to Groupwork approach Module 1: Framework for Analysis and Valuation

2020-01-16

Class #2: Module 2: Review of Business Activities and Financial Statements Appendix B: Constructuing and Analyzing the Statement of Cash Flows

2020-01-23

Class #3: Module 3: Profitability analysis and interpretation Module 5: Revenue Recognition and Operating Income ROE and DuPont analysis, and Rona case.

2020-01-30

Class #4: Module 5 cont.: Revenue Recognition and Operating Income cont.

2020-02-06

Class #5: Module 6: Asset Recognition and Operating Assets Module 7: Liability Recognition and Nonowner Financing Cash Conversion Cycle, and The Brick case.

2020-02-13

Class #6: Module 8: Equity Recognition and Owner Financing Group Company Analysis Project #1 due at beginning of class

2020-02-20

READING WEEK - No lectures or tutorials.

2020-02-27

Class #7: Module 9: Intercorporate Entities

2020-03-05

Class #8: Ratio Analysis. Module 10: Off-Balance Sheet Financing

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2020-03-12

Class #9: Accounting Quality Industry-specific characteristics Equity Valuation techniques - extracts from Modules 12, ,13 and 15

2020-03-19

Class 10: Equity valuation case using ROE - Empire Company. Module 4: Credit Risk analysis and Interpretation Group Company Analysis Project #2, Part A due at beginning of class

2020-03-26

Class #11: Module 4: Credit Risk analysis and Interpretation cont.

2020-04-02

Class #12: Review Group Company Analysis Project #2, Part B due at beginning of class

TBA

Final Examination

Last Date to drop course from Academic Record and GPA is March 8, 2020.

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