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BUSINESS FINANCE (Fundamentals of Corporate Finance)

BA 303 section 008 Spring 2011

CRN: 65633 Dates: Thursdays, March 28th through June 11th Class Time: 5:40-9:20pm Room: Cramer Hall #258 Instructor: Scott Thompson Office: SBA 465 Office Hours: By appointment Email: srthomp@pdx.edu Website: http://www.pdx.edu/sba/fp-scott-thompson Course Description: The development and study of a decision framework for financial management,

with emphasis on small-to-medium-sized businesses. Topics include analysis of financial health, planning for future financial performance, evaluation of potential investments, and risk analysis. Financing of firm growth and valuation will be introduced. An integration of financial management concepts as a total system approach to decision-making will be facilitated with the use of cases, as appropriate.

Prerequisites: 1. BA 205: Business Communications Using Technology: A working knowledge

of spreadsheets (MS Excel) is expected. 2. BA 211: Fundamentals of Financial Accounting 3. Junior Standing 4. Financial Calculator (with TVM functions) – NO Cell Phones, or I-Phone Apps Note: The School of Business Administration (SBA) strictly enforces prerequisites for

business courses. If you complete the prerequisites for a course after completing the course, you will not receive credit for the prerequisite courses because you have taken the courses out of sequence. Contact the SBA immediately if you haven’t completed the prerequisite coursework.

Required Text: Ross, Westerfield and Jordan: Fundamentals of Corporate Finance, 9 ed., Irwin,

2009

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Course Objectives: Understand how and when to apply the basic concepts of financial analysis in a

business setting, demonstrated through your ability to:

Evaluate the financial health of firms through financial statement analysis Forecast financial statements and determine funds needs Use future and present value techniques to solve valuation problems Forecast cash flow and performance characteristics of planned capital

expenditures Understand and quantify the relationship of investment risk to investment

returns Develop competence in the use of spreadsheets to present, analyze, and solve

financial problems. Concepts & Applications: By the conclusion of the course, you will be able to perform the following

financial decision making analyses, given the pedagogical approach and the materials to be covered:

Understand time-value-of-money (TVM) calculations and applications in financial problems

Use general valuation and general returns models to analyze securities and capital investments

Understand cash flow and market value concepts Construct and analyze basic Financial Statements (Balance Sheet, P&L,

Statement of Cash Flow) Calculate and interpret basic financial ratios Construct a full set of projected (pro forma) financial statements Understand how to construct and assess a proposed capital budgeting project Conduct project variance analysis Understand basic history of securities performance and learn how to measure

and interpret historical returns Understand the relationship between risk and returns: both in theory and

application Understand how companies measure their cost of capital

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Grading Procedures: Grades will be determined according to performance in the following: Homework & Reading 20% Weekly Quizzes 40% Final Exam 40% 100% Homework & Reading Completing the homework on time is essential to keeping up with the class.

Homework assignments will be from the text, or occasionally from handouts, and are due at the beginning of the class period. Late assignments will be penalized by ten points (out of 100) for each calendar day they are late.

Complete assignments using Microsoft Excel ONLY. Many of the problems have

multiple steps, and you will need to show your work for each step. Credit will be given for the steps, not just the answer. Please submit your homework via Desire2Learn with the subject heading “HW-1” or “HW-2,” etc.

You are expected to read the chapters to be discussed PRIOR to class. Part of the

lecture will include questions from the reading material. Your reading will be determined by class participation, as well as quiz questions.

Quizzes There will be a quiz each week, for a total of eight. Your quiz grade will be

determined by the six best of the eight quizzes. I will not recognize any absences, and there will be no make-up quizzes. If you take less than six quizzes, a zero score will be averaged in for each quiz you miss.

Final The final will be administered in class on our assigned final day. Specific

instructions will be given during class. Other Items: - Course participants are expected to maintain the highest standards of academic

honesty. Academic honesty is a requirement for completing this course. Dishonest behavior will result in a zero for your test or quiz.

- The use of cell phones and text messaging is not allowed in class. Please mute your phones and keep them in your bag.

- Dates, times, assignments and readings may change depending on class input and my discretion. You are responsible for announcements made in class.

- Post general questions to the Discussion area on Desire2Learn – other students may be able to answer your question. You can email me through Desire2Learn, but if you need an immediate response (i.e.- within 24-48 hours), please email me at srthomp@pdx.edu

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Schedule: Please remember that the reading is required PRIOR to the class.

DATE READING HOMEWORK DUE Mar 31 Introduction Apr 7 Chapters 1-3

Quiz #1 1Critical Thinking Question: 1,6,11 2CTQ: 1,2,5 2Problems: 1,2,3,4,8,15,16 3CTQ: 2,4,5

Apr 14 Chapter 4 Quiz #2

3P: 1,2,4,5,6,9,17,22 4CTQ: 1,5,6,7,9

Apr 21 Chapter 5,6 Quiz #3

4P: 1,2,9,10,11,25,26,27 5CTQ: 1,6,9 6CTQ: 1,2,3

Apr 28 Chapters 7,8 Quiz #4

5P: 2,3,4,5,11,13,15 6P: 1,3,4,12,27,28,36,46,52 7CTQ: 1,6,8 8CTQ: 1,2,3,11

May 5 Chapter 9 Quiz #5

7P: 2,3,4,5,17,19,23 8P: 1,2,5,9,10,17,19 9CTQ: 1,2,6

May 12 Chapter 10 Quiz #6

9P: 2,4,10,11,12,17 10CTQ: 1,2,8,10

May 19 Chapters 11,12 Quiz #7

10P: 1,3,7,9,10,11,12,13 11CTQ: 2,3,4 12CTQ: 4,8

May 26 Chapters 13,14 Quiz #8

11P: 1,3,4,20,21 12P: 1,2,4 13CTQ: 3,4 14CTQ: 1 13P: 3,6,17 14P: 1,6,9a

June 2 Review June 9 Final