FOUNDATIONS OF FINANCIAL SYSTEMS FINK 500.115 CRN 10245

SPRING 2015 – 8 - WEEKS – ONLINE COURSE Instructor: Dr. Douglas Dyer; Accounting, Finance and Economics Office: Founder’s Hall, 323 D Phone: 254.519.5429 COBA FAX Number: 254.501.5825 Office Hours: T&Th: 10:15-11:30 & 12:45 – 2:00 or by appointment Admin Asst: Ms. Christine Garza 254.519.5437 FAX: 254.501-5825 COBA Dept. Email: cobainfo@tamuct.edu Note: this is a general information address

Email: For general purposes please use my general university email address with yourcourse name number and section:To: ddyer@tamuct.edu Subject: FIN 500

If you have a course content related question, please post it to the “ASK PROF DYER” discussion board. It is far easier to check my regular email, so you might want to send a heads-up message there, asking that I be sure and check the ASK PROF DYER discussion board. Response will usually be within 24 hours. If you have not had a reply within that time please resend your message. I have received emails 14 months after they were sent! Don’t get angry; please just ping me again. I really enjoy working with students and am not intentionally ignoring your message! ASK PROF DYER questions might take a bit longer. Course Overview and Description: 1. To prepare MBA students for success in FINK 507. Unfortunately it is an impossible task given an 8-week, online course, and 1 credit hour to replicate a true UG introductory financial management course. So we focus on about 3 major topics: the basic characteristics of the two most familiar financial assets (stocks and bonds); Chapter 2: understanding and interpreting the basic financial statements (balance sheet, income statement, statement of cash flows & financial statement analysis (aka financial ratio analysis); and Chapter 4: TVM (the time value of money. 2. Introduce all students receiving an advanced degree from a COBA to some basics of finance. Even if you are an HR student planning on working for a not-for-profit organization, it still matters whether or not you can afford to turn on the lights when you go to work in the morning. So being able to read an income statement is important.

I provide you with a LOT of supplementary material. Besides the textbook there is aplia (a really fantastic online learning tool from the publisher (Cengage)), extra-credit quizzes, videos lectures, Dyer Handouts and numerous urls that will take you to excellent learning/practice resources. But if you don’t use them, and start immediately, then you are likely to struggle in this course. (See DYER HANDOUTS for “Online Finance Resources). Or the GETTING STARTED content area. (Note: someone, without my knowledge, rearranged my Blackboard Menu. I’ll get it straightened out, but click around and LOOK, get a feel for what is there. It should not be a major hardship.) Course Prerequisites: You should have been advised and admitted into this course based precisely on the academic and business background you bring with you. PLEASE: START NOW! Go to DYER HANDOUTS and read the “Some Finance Basics_Investment Menu” handout. Open the Online Finance Resources handout and click on the links and review financial statements and financial assets. The Baruch College Guide to Financial Statements is really a great place to start. Here is the link: http://www.baruch.cuny.edu/tutorials/statements/ Aplia: each chapter is divided into two parts. The first part is called Reading and is just that chapter in the ebook. The second part is called Problem Set. All Problem Sets have been set to Practice so you can take them as often as you like. You may get messages that something is late, but if it is Practice then it CANNOT be late! The basics of taking the Problem Sets are covered in the Introduction to Using Aplia Assignments problem set referenced above. All aplia Problem Sets are available. And of course you can go past chapter 4 – those of you going on to FIN 507 will cover most everything in our course. Course Objectives: Students who successfully complete this course should be able to: explain the fundamental types of financial assets including their basic characteristics, valuation, and their pros/cons as sources of financing (capital); evaluate a firm’s financial performance using its financial statements; evaluate financial alternatives from a time value of money perspective; evaluate the risk/return characteristics of different financial decisions; conduct a thorough firm-level financial analysis; demonstrate a thorough financial literacy; demonstrate proficiency using a financial calculator. 2.1 Student Learning Outcomes by chapter. 1. AN OVERVIEW OF MANAGERIAL FINANCE Discuss the basic types of financial management decisions and the role of the financial manager. Identify the goal of financial management. Compare the financial implications of the different forms of business organizations. Describe the conflicts of interest that can arise between managers and owners. Discuss the role of ethics and corporate governance in a well-functioning economic system. 2. ANALYSIS OF FINANCIAL STATEMENTS Interpret the information provided in a firm’s basic financial statements. Standardize financial statements for comparison purchases. Compute and interpret common financial ratios.

Assess the determinants of a firm’s financial performance. Identify and explain some of the problems and pitfalls in financial statement analysis. 3. THE FINANCIAL ENVIRONMENT Describe the role the financial markets play in determining living standards and economic growth. Distinguish between the various types of financial markets. Describe the various types of financial intermediaries and their functions. 4. THE TIME VALUE OF MONEY (TVM) Determine the future value of an investment made today. Determine the present value of cash to be received in the future. Calculate the rate of return on an investment. Given any 4 of the TVM variables (n, k, pv, pmt, fv) be able to calculate the unknown variable Determine the future and present value of investments with multiple cash flows. Describe the loan amortization process and create a loan amortization table. Explain how interest rates are quoted. 6. BONDS (DEBT) - qualitative characteristics only Identify important bond features and types of bonds. Discuss bond ratings and what they mean. Evaluate the impact of inflation on interest rates and bond values. 7. STOCKS (EQUITY) – qualitative characteristics only Assess how stock prices depend on future dividends and dividend growth. Identify the rights and privileges of stockholders. Explain how stock markets work. 3.0 TEXT: CFIN4, Besley and Brigham, Cengage, 2013 WITH APLIA ACCESS! SBN-13: 978-1-305-12957-3 See Blackboard Startup page for ordering information. The book is available in the bookstore but you do NOT have to purchase it there. You will also need a TI BA II Plus financial calculator. (Note: the publisher surprised me by changing to CFIN4, but whatever you read elsewhere, CFIN4, not 3, is the correct book. You can probably get by just fine with CFIN3, but you must have aplia access! Also Required: A financial calculator which can perform internal rate of return (IRR) calculations. (I will use a TI BA II Plus in class - this is the only financial calculator that I know how to use, so if you have another make or model you are pretty much on your own.) The Professional model is even better, but is not required.

4.0 Course Requirements: EXAMS and QUIZZES: Please read carefully the boxed statement below. CRITICAL INFORMATION REGARDING ONLINE EXAMS AND QUIZZES: I PROVIDE FAIRLY LENGTHY “AVAILABILITY WINDOWS” FOR THE EXAMS AND QUIZZES. (WHEN IT IS OPEN AND AVAILABLE FOR YOU TO TAKE. THEY ALMOST ALWAYS INCLUDE A WEEKEND AND AT LEAST 1 FULL WEEK DAY. THE WINDOWS NORMALLY CLOSE AT 11.59PM ON THE LAST DAY. From the University Rules, Procedures and Policies: Technology issues are not an excuse for missing a course requirement – make sure your computer is configured correctly and address issues well in advance of deadlines/ HERE IS WHAT YOU NEED TO READ, UNDERSTAND AND BELIEVE: Blackboard resets will only be made in the event of a prolonged Banner outage, verified by IT. If you have internet problems and are forced to miss an exam then the points will simply be added to the cumulative final exam (since the material is covered there as well.) So be sure and run a Browser Check before beginning the exam. Only take the exam on tried, tested, equipment and at a reliable location. Save each answer individually. That way if you complete a substantial portion of the exam we can base your grade on the part you did finish. XC QUIZZES: There will be a number of extra-credit, open-book, open-note Blackboard quizzes given over the semester, mostly EARLY in the semester, because it is SO critical that you learn the jargon of stocks, bonds and financial statements (which technically you should remember from your lower-level Principles of Financial Accounting.) They are located in BB Content Area XC BB Quizzes. Each Blackboard Quiz may be taken twice and only the best score will be used. Points earned will be added as extra credit to your final point total.. The Quizzes are primarily intended to give you an opportunity to practice the types of questions and problems you will see on your exams. The XC is secondary. (In fancy lingo, they are more of a teaching device than an assessing device. Do not forget the Sample Exam (in Dyer Handouts) for exam preparation as well. REGULAR EXAMS: There will be 2 online Regular Exams all worth up to a maximum of 100 points each (although there will be more than 100 points available; for example, I might put 28 questions @ 4 points each. That totals 112 possible points. But even if you get them all correct, your score on the exam will be 100. This is the way I choose to curve grades. By giving students more opportunity to EARN points, rather than just saying, “ok, everybody add 12 points to your score”. Exams must be taken during the scheduled exam window. See the schedule for exact dates. The online exams are open-book, open note. The emphasis of the exams is on applying the techniques and concepts not on memorization! And there will be extra-credit BB quizzes. See Content Area Exam Schedule for Exam windows (availability dates). Briefly: FINAL EXAM: There will be a cumulative Final Exam (all exams are cumulative), worth up to 200 points, that will emphasize material covered in the course

*** REMEMBER: EXAMS AND QUIZZES ARE INDIVIDUAL ASSIGNMENTS! Quizzes and exams will cover the skills and knowledge covered in CFIN4, aplia for CFIN4, Blackboard quizzes, Dyer Handouts and all materials assigned. 5.0 Grade Calculations: Total Points earned is all that matters. Not percentages! There are 400 possible points: 2 Regular Exams @ possible 100 points each and the Final Exam @ 200 points. Early in the class there are a number of XC assignments in BB. These steadily decrease as the semester goes by. Points earned are added directly to your Total Points Earned Total Points Earned Grade 400 - 360 A 359 - 320 B 319 - 280 C 279 - 240 D below 240 F

NOTE: Requests for Incomplete Grades: Incompletes will only be given in emergency or other extreme circumstances. Any request for an incomplete grade in this course must be approved by the professor prior to the last week of classes. Requests should be submitted in written form, include a detailed explanation and documentation, and must include an address and/or telephone number where you may be contacted throughout the following semester.

6. Gradebook and Schedule: All your scores will be in recorded in the BB gradebook; however, final grades will be computed using an Excel Spreadsheet.

COURSE AND UNIVERSITY PROCEDURES AND POLICIES

Drop Policy. If you discover that you need to drop this class, you must go to the Records Office and ask for the necessary paperwork. Professors cannot drop students; this is always the responsibility of the student. The record’s office will provide a deadline for which the form must be returned, completed and signed. Once you return the signed form to the records office and wait 24 hours, you must go into Warrior Web and confirm that you are no longer enrolled. Should you still be enrolled, FOLLOW-UP with the records office immediately? You are to attend class until the procedure is complete to avoid penalty for absence. Should you miss the deadline or fail to follow the procedure, you will receive an F in the course. Academic Integrity. Texas A&M University -Central Texas values the integrity of the academic enterprise and strives for the highest standards of academic conduct. A&M-Central Texas expects its students, faculty, and staff to support the adherence to high standards of personal and scholarly conduct to preserve the honor and integrity of the creative community. Academic integrity is defined as a commitment to honesty, trust, fairness, respect, and responsibility. Any deviation by students from this expectation may result in a failing grade for the assignment and potentially a failing grade for the course. Academic misconduct is any act that improperly affects a true and honest evaluation of a student’s academic performance and includes, but is not limited to, cheating on an examination or other academic work, plagiarism and improper citation of sources, using another student’s work, collusion, and the abuse of resource materials. All academic misconduct concerns will be reported to the university’s Office of Student Conduct. Ignorance of the university’s standards and expectations is never an excuse to act with a lack of integrity. When in doubt on collaboration, citation, or any issue, please contact your instructor before taking a course of action. Disability Support and Access Services. At Texas A&M University – Central Texas, we value an inclusive learning environment where every student has an equal chance to succeed and has the right to an education that is barrier-free. The Office of Disability Support and Access is responsible for ensuring that students with a disability enjoy equal access to the University's programs, services and activities. Some aspects of this course or the way the course is taught may present barriers to learning due to a disability. If you feel this is the case, please contact Disability Support and Access at (254) 501-5831 in Warrior Hall, Ste. 212. For more information, please visit their website at www.tamuct/disabilitysupport. Any information you provide is private and confidential and will be treated as such. Tutoring. Tutoring is available to all TAMUCT students, both on-campus and online. Subjects tutored include Accounting, Finance, Statistics, Mathematics, and Writing, and APA formatting. Tutors are available at the Tutoring Center in Warrior Hall, Room 111. Visit www.ct.tamus.edu/AcademicSupport and click "Tutoring Support" for tutor schedules and contact information. If you have questions, need to schedule a tutoring session, or if you are interested in becoming a tutor, contact Academic Support Programs at 254-501-5830/5836 or by emailing Cecilia.morales@ct.tamus.edu Chat live with a tutor 24/7 for almost any subject on your computer! Tutor.com is an online tutoring platform that enables TAMUCT students to log-in and receive FREE online tutoring and writing support. This tool provides tutoring in Mathematics, Writing, Career Writing, Chemistry, Physics, Biology, Spanish, Calculus, and Statistics. To access Tutor.com, log into your Blackboard account and click "Online Tutoring." University Library. The University Library provides many services in support of research across campus and at a distance. We offer over 200 electronic databases containing approximately 250,000 eBooks and 82,000 journals, in addition to the 72,000 items in our print collection, which can be mailed to students who live more than 50 miles from campus. Research guides for each subject taught at TAMUCT are available through our website to help students navigate these resources. On-campus, the library offers technology including cameras, laptops, microphones, webcams, and digital sound recorders.

Research assistance from a librarian is also available twenty-four hours a day through our online chat service, and at the reference desk when the library is open. Research sessions can be scheduled for more comprehensive assistance, and may take place on Skype or in-person at the library. Assistance may cover many topics, including how to find articles in peer-reviewed journals, how to cite resources, and how to piece together research for written assignments. Our 27,000-square-foot facility on the TAMUCT main campus includes student lounges, private study rooms, group work spaces, computer labs, family areas suitable for all ages, and many other features. Services such as interlibrary loan, TexShare, binding, and laminating are available. The library frequently offers workshops, tours, readings, and other events. For more information, please visit our homepage: http://www.tamuct.edu/departments/library/index.php Incompletes: Incomplete grades will be given only in extreme circumstances and ONLY if a substantial portion of the course has already been completed. I will convene a group of 3 professors to consider your documentation and case for an incomplete. The University is under direction to become much more discerning about the granting of incomplete as a grade! UNILERT: Emergency Warning System for Texas A&M University – Central Texas – Very Useful! UNILERT is an emergency notification service that gives Texas A&M University-Central Texas the ability to communicate health and safety emergency information quickly via email and text message. By enrolling in UNILERT, university officials can quickly pass on safety-related information, regardless of your location. Please enroll today at TAMUCT.org/UNILERT

TECHNOLOGY REQUIREMENTS AND SUPPORT. Technology Requirements. This course will use the TAMUCT Blackboard Learn learning management system. You must have a reliable computer and internet connection. The BB login page provides a great deal of information. Use the Browser Check (discussed below) before attempting ANY quiz or EXAM! Logon to https://tamuct.blackboard.com to access the course.

Username: Your MyCT username (xx123 or everything before the "@" in your MyCT e-mail address)

Initial password: Your MyCT password Check browser and computer compatibility by using the “Test Your Browser” button, found in the “Check Your Browser” module on your Blackboard dashboard, once you have logged in. Technology Support. For technology issues, students should contact Help Desk Central. 24 hours a day, 7 days a week:

Email: helpdesk@tamu.edu Phone: (254) 519-5466 Web Chat: http://hdc.tamu.edu

When calling for support please let your support technician know you are a TAMUCT student. For issues related to course content and requirements, contact your instructor. Technology issues are not an excuse for missing a course requirement – make sure your computer is configured correctly and address issues well in advance of deadlines. Therefore, BB resets will be made only in the event of a prolonged Blackboard outage! If a Regular Exam is missed, then the points will be added to the cumulative Final Exam.

WEEK 0 MONDAY’S DATE Chapters and Material Covered.

1 1/19 Introduction; Short Tour of Blackboard; Brief Review of Stocks and Bonds – the very early parts of ch 6&7, video lectures, urls on Online Finance Resources

2 1/26

Ch1: Introduction to Managerial Finance Ch 2: Analysis of Financial Statements: Review of the basic financial statements: Balance Sheet, Income Statement, Statement of Cash Flows, Statement of Retained Earnings

3 2/2

Ch 2: continued – Financial Statement Analysis – the material in Dyer Handouts > Deleon Corporation is a self-contained guide to financial analysis. The raw material is in the Excel file and the analysis is in the PDF files.

4 2/9 Ch3: The Financial Environment: a look at the ever-changing financial system. Almost anything written is outdated before it can be published.

EXAM I – The Exam window will open at 5pm on Friday, 2/13 and close at 11.59pm on Monday, 2/16. Be sure and run a Browser check, save each answer individually, and take the exam in a reliable location with known technology. Blackboard resets will be done only in the event of a prolonged Blackboard outage. The emphasis is on the verbal basics of stocks and bonds, and most especially chapter 2.

5 2/16

Ch4: The time value of money. We will solve for any of 5 potential unknowns, n, k, pv, pmt, fv for lump sum and multi-year cash flows. You will need a financial calculator. The Texas Instruments, TI BA II PLUS is the standard here at TAMUCT. see syllabus

EXAM II – The Exam window will open at 5pm on Friday 2/20 and close at 11.59pm on Friday, 2/27. Be sure and run a Browser check, save each answer individually, and take the exam in a reliable location with known technology. Blackboard resets will be done only in the event of a prolonged Blackboard outage.

6 2/23 Ch4 continued: including loan amortization

7

3/2

STUDY & REVIEW

The Comprehensive Final Exam will open at 5pm on Friday, 3/6 and will close at 11.59 pm on THURSDAY, 3/12. It will be given in 2 parts. Part 1 of 2 and Part 2 of 2, so you can take a break and refresh the mind a bit. Probably about 20 questions on each part – 40 total. Any missed Regular Exams will have their points shifted to the final. In other words, the final exam questions will be worth more points.

8

3/9

FINAL EXAM CONTINUED DUE THURSDAY, 3/12 AT 11.59PM