1) An HP-10BII calculator, which costs around $40, is also a good choice.
2) The HP-12c financial calculator (about $90), is the "old standby" in the finance industry.
3) I have not used, but have instructions for, the TI BA-II calculator on my website. If you have this calculator, it should work. If you do not have it, please consider buying one of those listed above.
4) I have posted additional calculator sheets for the HP17 and HP19 calculators, in case you have them.

I have a handout that shows the keystrokes for doing financial problems with each of these calculators. To get a preview of this, check my website , Using HP calculators for financial functions. I will not show them for other calculators-though if you already have a calculator and know how to use it, that will not be a detriment to you. I will not be able to help you learn to use other calculators (because I don't know them). Please come to each class with your calculator.

If you have an old financial calculator at your house that is not one of the ones listed above and you don't know how to use it, please buy a new one-you will use this calculator a lot and the price of a slow start is high.

Buy the calculator at the place it is cheapest. Search the web for good buys.

Business Analysis Using Financial Statements
MBA 600-Thursday, Room OCC 400
Fall, 2008
Dr. Michael Kinsman
(949) 223-2533
MKinsman@pepperdine.edu

Prerequisite: MBFE 652 and MBFE 655 or equivalent. No exceptions.

The text for the course is:

• Palepu, Krishna G.,et al., Business Analysis & Valuation Using Financial Statements, Text and Cases, (4th edition, Cincinnati, Ohio: Southwestern Publishing Company), 2007. Listed below as PBH.

Please prepare the readings and materials listed below each session for that session.

PREPARE, listed below, means that at a minimum you should read the case and prepare the questions listed, usually with numbers and exhibits. PREPARE does not mean write for turn in, although I may, on occasion, choose to collect your notes. You will be assumed prepared unless you tell me otherwise. It is very important that you be prepared for each session--important to you and to our learning team.

Students have told me that working in groups of three to five in preparing the cases was very helpful--in fact, many of those students have told me that they would require such groups, although at the start of class they would have resisted such an assignment. I do not plan to assign such groups. but I strongly urge you to get into a study group for these cases. However, if you are not participating in your group, or are the only one participating in your group, you are in the wrong group.

If I were studying for the class, I would do the reading first and then would prepare the cases. You may be interested in checking out my "Useful Finance and Accounting Websites" data page. I believe you will find this a good source of information.

We all need to be aware of the need for flexibility as we work through this course together. If something is not working for you, I am willing to make changes to make this the best course it can possibly be for you and for our group. A number of changes have been made from the first time through, based on student input. It is my intention that this be one of the best courses you have ever taken. If something is occurring that is different from that, please let me know.

Grading and attendance: Please see the last page of this syllabus regarding grading and attendance issues.

Conduct: The Graziadio School of Business and Management has asked me to direct your attention to pages 203-216 of the catalog, regarding conduct expected of a graduate student and of an employee of the University.

Policy on disabilities: The Graziadio School of Business and Management has asked me to direct your attention to page 37 of the catalog, regarding assistance for students with disabilities.

Session I--August 28--Strategic aspects of the firm, ratio analysis, and management communication of results

Read:

PBH, pp. 1-1 to 1-10 (ch. 1)
PBH, pp. 2-1 to 2-16 (ch. 2)
PBH, pp. 5-1 to 5-31 (ch. 5)
PBH, pp. 12-1 to 12-18 (ch. 12)

Introduction to the course
Reasons for this course
How does the analysis of a business fit into corporate strategy?
Analysis of a business and its prospects
The economics of businesses
Competitive strategies: The importance of being competitive
Ratio analysis
Cash flow analysis
Decomposing ratios
Is management getting its message across?
Communicating through reports
Other forms of communication

Prepare: America Online, Inc. (p. 1)
For all cases, see the class notes for helpful study questions

Session II--September 4--Accounting analysis of the firm; balance sheets; problems with balance sheet numbers; income statements; problems with income statement numbers

Read:

PBH, pp. 3-1 to 3-14 (ch. 3)
PBH, pp. 4-1 to 4-32 (ch. 4)

How can accounting numbers be made to "cheat?"
Rules that proscribe "cheating"
Standards setting
Accounting analysis
Balance sheets: Assets
Balance sheets: Liabilities and equities
Problems in measuring assets, liabilities and equities Income statements: Revenues
Income statements: Expenses
The overall entity

Prepare: The Home Depot, Inc. (p. 213)

Session III--September 11--Financial analysis of the firm (current and forecasted) Valuation of the firm

Read:

PBH, pp. 6-1 to 6-18 (see also appendix) (ch. 6)
PBH, pp. 7-1 to 7-16 (see also appendix) (ch. 7)
PBH, pp. 8-1 to 8-17 (ch. 8)

Discounted cash flows using free cash flow
Sustainable growth
Forecasting the health of the firm
Sensitivity analysis for your forecast
Risk in the discounting model
Accounting based methods for valuing firms: Discounted abnormal earnings
Price multiples and adjusting data

Prepare: Home Depot, Inc., in the New Millenium (8-20)

Session IV--September 18--Analysis of equity securities; credit analysis and distress prediction

Read:

PBH, pp. 9-1 to 9-13 (ch. 9)
PBH, pp. 10-1 to 10-16 (ch. 10)

Does market efficiency make analysis bogus for equities?
Can I make money by doing analysis?
Using financial analysis to assess credit worthiness
Using financial analysis to rate debt
A methodology for assessing financial health of companies

Prepare: Wheel City (handed out)

Session V--September 25--Mergers and acquisitions; capital structure; dividends

Read:

PBH, pp. 11-1 to 11-17 (ch. 11)
PBH, pp. 12-1 to 12-13 (ch. 12)

Regulation of the financial markets
Why acquire or merge?
How do you establish terms of the merger?
Financing mergers

Prepare: Schneider and Square D (11-21)

Session VI-October 2-Preparation for team class presentations
Session VII--October 9-Class report presentations

For each of you, the final examination will be a team presentation of a case handed out in class at about week 4. Each team will present for 35 minutes; each team will critique another team for 15 minutes.