FIN601

FINANCIAL MANAGEMENT - FIN 601

Dr. Chong Y. Kim

Le Moyne College, Syracuse, NY, Spring 2002, Phone: (315)445-4391,
E-Mail:Kim@lemoyne.edu, Fax: 445-4787, Room: RH-309

PREREQUISITES: QUA 501 & ACT 501

COURSE DESCRIPTON

This course is designed to help students develop basic financial management tools necessary for evaluating and analyzing strategic and financial issues of corporations. The application of these tools to real world problems is an important part of the course. Specific areas of concentration include:

1. Cash flow forecasting and valuation - NPV.
2. Capital budgeting and risk and return.
3. Capital structure and cost of capital.
4. Long-term financing-equity and debt.

REQUIRED

1. Bodie and Merton, Finance,1st ed.(Prentice Hall, 2000)
2. Daily reading of The Wall Street Journal.

RECOMMENDED

Business Week, Fortune, Forbes, the NYTimes

GRADING

Course requirements consist of participation in each class session, reading assignments, a midterm (30%), final (30%.), research project (30%), and contributions to class discussions (10%). This course considers group work an important element of learning process. Groups of 4-5 members will be formed by the 2nd week into the semester, and it is advised to set ground rules on how to network and study together.

Class discussions: Although daily readings of article, "Heard on the street" which appears in section C of the WSJ is required, class discussions will focus on the Tue. article. Every student is expected to have read the articles and contribute to the class discussions.

Research Project: Each team must choose a large public firm to make sure annual reports and other financial data are available for its financial analysis. Following assignments are provided to ficilitate your research and analysis.

1. Each team should submit the names of team members by 1/23. Pick a firm and get it cleared with the instructor for non-duplication.
2. By 1/30, submit a preliminary report on your firm. The instructor will keep this report until the end of the semester. The report should include:

a. Name of the firm
b. Name of the CEO or chair of the board
c. A short history of the firm
d. Line of business
e. Sales, NI, & TA for the last 5 years(97-01)
3. Chart and table (dates to cover: 2/4-4/5)

a. Construct a table containing two series of daily figures for S&P 500 and stock price of your firm reported in the WSJ.
Series 1: reported values;
Series 2: indexed value with 100 for 2/4.
b. Construct a line chart using the 2nd series (indexed) values. Use a spreadsheet software.
4. Articles (dates: 2/4-4/5)

a. Collect articles from the WSJ which deal with your chosen firm or industry developments.
b. Choose the 5 most important articles from your collection and put each on a separate sheet of paper and write a brief description (a paragraph) explaining why the article is important for undersranding your firm.
5. The report is due by 4/24---Write a double-spaced, typewritten, 5 page research report which analyzes your firm's performances including, but not limited to:
a. financial ratios of your firm and 1 competitor over the 5-year period of investigation (97-01)
b. financial weakness and strength of the firm(current).
c. future course of financial performances(expected) - based on internal and external conditions.
d. recommendations for improvement to the CEO or CFO of the firm.
6. Attach the chart, table, articles from 3 and 4 above, and any appendices.

* Warning: Make sure this is a Financial, not a Marketing research project.

TENTATIVE SCHEDULE

Date Topics Assignments

Jan. 16, 23 ch.1, Introduction to finance
ch.2, Financial system
ch.3, Financial statements
1-1,2,7
2-2,3,11,14
3-9,12,15

30

Feb. 6 ch.4, Time value of money
ch.6, Analysis of investment project 4-1,2,10

12, 20

ch.6, continued
ch.8, Bond valuation 6-1,2,5

27

ch.8, continued 8-1,2,10

Feb 27 - Exam 1: ch. 1,2,3,4,6

Mar. 6,13 ch.9, Stock valuation
ch.10, Risk management 9-1,2,3,10,12

20

Apr. 3 ch.10, continued
ch.11, Hedging and insurance 10-2,3,10

10, 17
ch.11, continued
ch.12, Portfolio investment
(ch.14, Forward and fututures prices) 11-1,3,5
12-1,2,3
(14-1,3,9)

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Date	Topics	Assignments
Jan. 16, 23	ch.1, Introduction to finance ch.2, Financial system ch.3, Financial statements	1-1,2,7 2-2,3,11,14 3-9,12,15
30 Feb. 6	ch.4, Time value of money ch.6, Analysis of investment project	4-1,2,10
12, 20	ch.6, continued ch.8, Bond valuation	6-1,2,5
27	ch.8, continued	8-1,2,10
	Feb 27 - Exam 1: ch. 1,2,3,4,6
Mar. 6,13	ch.9, Stock valuation ch.10, Risk management	9-1,2,3,10,12
20 Apr. 3	ch.10, continued ch.11, Hedging and insurance	10-2,3,10
10, 17	ch.11, continued ch.12, Portfolio investment (ch.14, Forward and fututures prices)	11-1,3,5 12-1,2,3 (14-1,3,9)