Tue & Thur 12:30-1:30pm
TR, 11:00am to 12:15pm
Class will not meet on:
Class will meet on:
The objective of the course is for you to learn how to read, understand, and analyze the financial statements of most publicly-traded companies. The course is intended for students with no previous exposure to financial accounting. This course takes an external user’s perspective, as opposed to an accountant or internal user’s perspective. External users include investors, creditors, customers, suppliers, government regulators, and business school students. A solid understanding of the fundamentals covered in this course should enable you to do well in more advanced finance and accounting courses.
The course begins with the basic concepts of accounting. We begin by looking at the main financial statements: balance sheet, income statement, statement of cash flows, and statement of stockholders’ equity. Particular attention is paid to how these statements are related to each other and how they provide information about the financial health of a company. We then cover specific items from the financial statements.
|Date||Day||Class No.||Topic||Book Chapter||Pages||Suggested Textbook Problems||Homework Due|
|9/7/10||T||1||Course Objectives and Administrative Items|
|9/14/10||T||3||Overview of Financial Statements: BS, IS, CF, SE||1||8-16||1-26, 1-31, 1-49, 1-50||HW#1|
|9/16/10||Th||4||Transaction Accounting: Double-Entry, Debits & Credits, T-Accounts||3||91-96||3-17, 3-18, 3-20, 3-23, 3-24, 3-50|
|9/21/10||T||5||Cash vs. Accrual Accounting; matching principle||2||44-61||2-30, 2-32, 2-34, 2-64||HW#2|
|9/23/10||Th||6||The Accounting Cycle||3||96-114|
|9/28/10||T||7||Accruals & Deferrals; Hall of Shame||4||139-151||4-21, 4-22, 4-23|
|9/30/10||Th||8||Timing of Revenue Recognition||HW#3|
|10/7/10||Th||10||Statement of Cash Flows; Free Cash Flow||5||183-207||5-32, 5-34, 5-35, 5-40, 5-41, 5-69|
|10/12/10||T||11||Cash Flow and Working Capital Analysis|
|10/14/10||Th||12||Contra-Sales Accounts & Allowance for Bad Debt||6||231-250||6-35, 6-38, 6-47, 6-83|
|10/19/10||T||13||Inventory Accounting||7||279-293||7-34, 7-47, 7-50, 7-51||HW#4|
|10/21/10||Th||14||Property, Plant & Equipment||8||335-349||8-32, 8-34, 8-38|
|10/26/10||T||15||Common-Size Income Statement|
|10/28/10||Th||16||Case study & Review|
|11/4/10||Th||18||Time Value of Money; Accounting for Long-Term Debt||9||418-424||9-30, 9-34, 9-36, 9-44, 9-47|
|11/9/10||T||19||Contingent Liabilities; More on Bonds||9||409-415||9-62, 9-80, 9-81||HW#5|
|11/11/10||Th||20||Accounting for Capital and Operating Leases||9||405-408|
|11/16/10||T||21||Shareholders' Equity & Equity Compensation (Stock Options)||10||441-451||10-36, 10-37, 10-38|
|11/18/10||Th||22||Inter-Corporate Investments & Employee Stock Options||10||452-471||10-40, 10-43, 10-76|
|11/23/10||T||23||Case study & Review||HW#6|
|11/25/10||Th||-||No class for Thanksgiving Holiday|
|11/30/10||T||24||Financial Statement Analysis: DuPont Analysis, Multiples, DCF||2,4 & 9||70-74, 162-164, 415-417|
|12/2/10||Th||25||Academic research (financial reporting & disclosure)|
|12/7/10||T||26||Team presentations||Analyst Notes|
|12/9/10||Th||27||Team presentations||Analyst Notes|
|12/14/10||T||28||Review course and preview final exam|
Textbook: Horngren, Sundem, Elliott, and Philbrick (“HSEP”), Introduction to Financial Accounting, Second Custom Edition for C10.00001
Class Format: Most lectures will use the aid of Powerpoint slides, which will be made available prior to each class on Blackboard. You should print your own copies prior to class. The textbook covers the basic material in the course, including accounting rules and conventions. Some of the textbook material is sufficiently straight-forward such that I expect you to learn it solely from reading the textbook. The lectures will cover only the more important and difficult material in the textbook, as well as some additional material not covered in the textbook. You should read the assigned textbook sections before or after the lecture (whatever works for you).
Individual Homework: There will be two types of homework assignments: ones from the textbook and ones not from the textbook. Textbook problems are suggested and used to reinforce learning, but they will not be submitted. Outside of the text, there will be between 5 and 7 homework assignments. These assignments generally require you to find information about companies from their websites or the SEC website. You must submit a hardcopy of your completed homework at the beginning of class on the date due; late homework will not be accepted. Solutions will be posted to Blackboard.
Exams: There will be three exams, two during the semester (10/5/10 and 11/2/10) and one during finals. All exam questions are based on actual financial statements from a publicly-traded company. Exam dates will not be rescheduled. If you miss the first or second exam, extra weight will be added to the exam that you did take. If you miss the final exam, you will receive zero for that exam. Do not schedule any travel plans before the final exam date.
Team Projects: At the end of the semester, your team (no more than 5 people) will present an oral “analyst stock call” of no longer than 10-minutes and an accompanying written “analyst note” of no longer than 3 pages (including tables). The presentation and note should include a description of the company and industry, an overview of its past and projected financials, and an opinion about its stock. Be prepared to defend your recommendation during a brief Q&A.
Grading: Your grade will be based on 15% homework, 15% team project, 15% first exam, 20% second exam, 30% final exam, 5% class participation. An effort will be made to give slightly more weight (~40%) to the final exam if a student has improved throughout the three exams.
At NYU Stern we seek to teach challenging courses that allow students to demonstrate their mastery of the subject matter. In general, students in undergraduate core courses can expect a grading distribution where:
Note that while the School uses these ranges as a guide, the actual distribution for this course and your own grade will depend upon how well you actually perform in this course.
The process of assigning grades is intended to be one of unbiased evaluation. Students are encouraged to respect the integrity and authority of the professor’s grading system and are discouraged from pursuing arbitrary challenges to it.
If you believe an inadvertent error has been made in the grading of an individual assignment or in assessing an overall course grade, a request to have the grade re-evaluated may be submitted. You must submit such requests in writing to me within 7 days of receiving the grade, including a brief written statement of why you believe that an error in grading has been made.
The School expects that students will conduct themselves with respect and professionalism toward faculty, students, and others present in class and will follow the rules laid down by the instructor for classroom behavior. Students who fail to do so may be asked to leave the classroom.
Collaboration on Graded Assignments
Students may not work together on graded assignment unless the instructor gives express permission.
Course evaluations are important to us and to students who come after you. Please complete them thoughtfully.
Integrity is critical to the learning process and to all that we do here at NYU Stern. As members of our community, all students agree to abide by the NYU Stern Student Code of Conduct, which includes a commitment to:
The entire Stern Student Code of Conduct applies to all students enrolled in Stern courses and can be found here:
Undergraduate College: http://www.stern.nyu.edu/uc/codeofconduct
Graduate Programs: http://w4.stern.nyu.edu/studentactivities/involved.cfm?doc_id=102505
To help ensure the integrity of our learning community, prose assignments you submit to Blackboard will be submitted to Turnitin. Turnitin will compare your submission to a database of prior submissions to Turnitin, current and archived Web pages, periodicals, journals, and publications. Additionally, your document will become part of the Turnitin database.
Your class may be recorded for educational purposes
If you have a qualified disability and will require academic accommodation of any kind during this course, you must notify me at the beginning of the course and provide a letter from the Moses Center for Students with Disabilities (CSD, 998-4980, www.nyu.edu/csd) verifying your registration and outlining the accommodations they recommend. If you will need to take an exam at the CSD, you must submit a completed Exam Accommodations Form to them at least one week prior to the scheduled exam time to be guaranteed accommodation.