ACCT 416 | Financial Reporting & Analysis

Syllabus – Spring, 2013

14105R Lecture 2:00-3:50am Tuesday &, Thursday ACC 310 14106R Lecture 4:00-5:50am Tuesday &, Thursday ACC 310

Professor: Thomas P. Ryan Email: thomasry@marshall.usc.eduOffice: ACC 213 Phone: 818 219 4285

Office HoursMondays 1:30 – 3:30TuesdaysWednesdaysThursdays

11:00 – 12:00 1:30 – 3:30 11:00 – 12:00 If these hours conflict with your classes, please contact me

Overview and Tie to USC Marshall School of Business Strategic Plan : Per the USC Marshall School of Business “Strategic Vision for Marshall” “…..The USC Marshall School of Business aims to be a leader in educating tomorrow’s global business leaders, creating knowledge of management and the business environment, and addressing critical problems facing business and society, both locally and across the world.”

While the course will rest on a foundation of accumulation of knowledge of Financial Reporting and Analysis, we will seek to avoid focus of learning solely from a “numbers and data” perspective. Rather, students and professor together will jointly endeavor to consider career related implications; consider how accounting data in conjunction with financial analysis and particularly for projections and valuation is used in management and the business environment. We will seek to intermittently tie the subject matter to contemporaneous events that may occur during the course. While the course syllabus identifies target subjects for focus, if and when relevant important current events occur, or should relevant guest speakers become available, consistent with course objectives, changes to the course organization and format may occur. For example, discussion of financial analysis matters coincident with significant Initial Public Offerings, Acquisitions or Divestitures may merit a change to the initial course plan.

Course Introduction and Objective

This course examines the role of financial statement analysis in the prediction of a firm's future financial performance.

The course is designed to provide (1) skills to analyze financial statements; (2) exposure to public sources of financial information used in the capital markets; and (3) an appreciation for the usefulness and limitations of financial statement analysis in specific decision contexts. The course will focus on fundamental analysis and forecasting. The course will include limited depth use of analysis and forecasting in a valuation context.

Learning Objectives

By the time students finish this course, they should be able to:

demonstrate an understanding of typical decisions in which financial analysis plays a key role; the dependency of the analysis on historic financial data filings for the analysis; and the pivotal role of financial analysis in the projection of future performance as a key to relevant for decision making by in class discussion.

demonstrate an understanding of the importance to financial analysis of filings required of publicly traded companies, such as Forms 10-K, 10-Q, S-1, segment disclosure requirements; demonstrate familiarity with subject matter included in filings, by active participation in class discussion and completing quiz materials focusing on these matters

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demonstrate an understanding of the limitations of financial analysis, recognize the impact of bias, discuss the poor comparative track record of financial advisors relative to the overall market performance and the historic pattern of relatively poor economic results relative to purchase prices paid from major acquisitions through class discussion.

recognize and discuss the varying contexts in which in accounting data, in conjunction with financial analysis, and particularly for projections and valuation, is used in management and the business environment: (Acquisition deliberations, Disposition deliberations, Investment in initial public offerings, Assessment of the value of publicly traded stocks as compared to trading price, Bankruptcy, Federal Tax reporting, Financial Statement reporting) through in class discussions.

demonstrate an understanding of the intertwined nature of metric based analysis and considerations of the subject company’s business strategy and economic drivers as a foundation of the overall analysis exercise through classroom discussion, test materials, and work on group projects.

demonstrate an intermediate level understanding of ratio analysis of the subject company and benchmark comparable companies by active participation in class discussion and completing both homework materials and group project efforts including these matters

demonstrate familiarity with the theory underlying the selection of Benchmark Comparable Companies and the use of either the OSIRIS or Compustat databases to gather data as a beginning to the financial analysis process, through active use of these databases for homework and team assignments.

recognize and discuss the methodologies and tools used in efforts to assess, and potentially make accounting adjustments and changes to categorization of costs, between the benchmark companies and the subject company being analyzed to assure consistency through in class discussion, and team assignments.

demonstrate knowledge of the process of using financial analysis as a foundation for forecasting as a key step to the assessment of various insights leading to a conclusion of value through class discussion and team project assignments.

demonstrate recognition of the differences in accounting metrics, and accounting related adjustments that may be appropriate for financial analysis focus based on varying industry sectors, company life stage or purpose of analysis, through discussion of team presentations and by completing quiz materials on these matters.

demonstrate a basic level of familiarity with the business valuation methodologies within the general three categories: Earnings Approach / Discounted Cash Flow; Benchmark/Market Comparable Approach, and Underlying Assets Approach through homework assignments and team assignments.

The course will include review of most chapters of the Palepu & Healy (PH) text “Business Analysis & Valuation using Financial Statements.” For a majority of class sessions, students will be assigned readings constituting a portion of a particular chapter of the text, or alternative materials that will be posted on blackboard. As described below, homework assignments and quizzes will include material from the readings in preparation for class lecture on the topics.

A tentative schedule of the week by week activities and assignments for the class is included later in this document.

Required Materials

Business Analysis and Valuation Using Financial Statements, 4th Edition (4E) by Palepu & Healy (PH). This is the soft cover version of the text being and does not include case studies.

The course will include discussion of contemporary news events tied to the course subject matter. While not a significant time commitment, students should plan to spend not less than 15 minutes before each class session developing a cursory level awareness of current financial events through readings from sources such as the Wall Street Journal, or through access typical financial websites such as Yahoo finance

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Materials on Blackboard, and homework materials submitted via Blackboard, are critically important to student success in the course. Students very likely are familiar with Blackboard from prior study at USC. Self instruction related to Blackboard is available at http://www.usc.edu/

Prerequisites:

1 from BUAD 215 or BUAD 306 and 1 from ACCT 370 or ACCT 370B or ACCT 415

Course Notes: Most lecture slides will be available through Blackboard.

Grading Summary:Assignments % of Grade

Homework 20%Quizzes 20%Final Exam 20%Team project 30%Professionalism and participation 10% Total 100%

Final grades represent how you perform in the class relative to other students. Your grade will not be based on a mandated target, but on your performance. Historically, the average grade for this class is about 3.3 (i.e., B+). Three items are considered when assigning final grades:

1. Your average weighted score as a percentage of the available points for all assignments (the points you receive divided by the number of points possible).

2. The overall average percentage score within the class. 3. Your ranking among all students in the class

Undergraduate Program Learning Objectives

Below are the five Undergraduate Program Learning Objectives developed for the Undergraduate accounting program by the USC Leventhal faculty and the level each is covered in this course:

Objective 1-Technical Knowledge: Students will demonstrate technical proficiency in gathering financial data from public sources, and utilizing that data in financial analysis to derive projections leading to valuation related decision making. High

Objective 2-Research, Analysis and Critical Thinking: Students will demonstrate the ability to research, critically analyze, synthesize, and evaluate information related to financial data and company strategy. High

Objective 3-Ethical Decision Making: Students will demonstrate an understanding of ethics, ethical behavior and ethical decision making. Low

Objective 4-Communication: Students will demonstrate the ability to communicate ideas both orally and in writing in a clear, organized and persuasive manner. Medium

Objective 5-Leadership, Collaboration and Professionalism: Students will demonstrate leadership skills and the ability to work cooperatively and productively to accomplish established goals. Medium

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ASSIGNMENTS AND GRADING DETAIL

Readings, Homework and Quizzes

The class is organized based on the premise that student comprehension and retention of knowledge are best achieved when a five step process is used: 1) students allocate time in advance of lectures to read course materials, with either homework assignments or quizzes completed prior to the class related to the homework reading, 2) in class lecture and discussion, 3) access to class lecture slides on Blackboard by students after class, and 4) work on a team project basis, and 5) testing via the final exam.

There are sixteen class sessions in the eight weeks of this course. It is anticipated that there will be between four and six, short 15 minute quizzes that will be given typically at the beginning of Tuesday classes during the first seven weeks of the course. The lowest quiz grade will be deleted from the computation of the final course grade. For example, if five quizzes actually are given and the student completes all five, the lowest grade will be deleted. If five quizzes are given and the student is absent for one, the zero grade for the missed quiz will be deleted. If five quizzes are given and a student misses two classes, the grades for the three completed quizzes will be added to the grade zero for the fourth quiz in computing the overall quiz grade. In order to treat all students equally and fairly, no “make up” quizzes will be given.

It is anticipated that there will be either 4 or 5 homework assignments due at the beginning of class typically on Thursdays during the first six weeks of the course. Students are expected to complete all homework assignments. Homework assignments submitted after the beginning of the class when they are due will have credit reduced by 50%. At the option of the professor, some or all homework assignments may be required to be submitted by Blackboard.

A significant portion of the course grade ties to the homework and quizzes. Given the dependency of the overall grade on the relative weighting of each grade component, it is a mathematical truth that students may undermine their final overall course grade if they fail to perform homework assignments or completing them late.

Per the above, it should be clear that students are expected to arrive at class having completed the reading, thus having a basic familiarity with the materials. Decks used in class will be posted on Blackboard after class.

Final Exam

The final exam will emphasize material covered in lectures, discussions by guest speakers, class team presentations, homework assignments, and the assigned readings in the text.

The final exam occurs after the team presentations by students and it is anticipated that subject matter from the team presentations may be included in the final exam questions.

Generally, the final exam will be broken into three portions: 1) Multiple choice questions with 70% to 80% or possibly more of the point value, and 2) Questions where students will complete entries, analysis or computations with perhaps as much as 20% to 30% of the point value .

Team Project

The team project will be 30% of the final grade. The team project has a primary theme of work by students to gather relevant profile data on a company, perform financial analysis, develop projections and derive an estimate of value.

The results of the team project will be evaluated in three ways: 1) completion of a company specific analysis write up of no more than 8 pages maximum and no more than 6 pages of text, 2) an oral team presentation of the analysis tentatively scheduled to occur during the 14th and 15th class sessions, and 3) by the ratings by fellow team members.

In addition to the financial analysis skills, the team project includes as an objective the advancement of skills associated with working as a team, particularly seeking to advance skills where meetings do not occur in a face to face arrangement.

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In the team project, student meetings through conference calls, and through use of online collaboration tools, is encouraged.

The two sessions of the 416 course each have a starting enrollment of approximately 50 students. In past semesters, student “drops” have lowered enrollment substantially. With 50 students per class, assigning 5 students per team, and considering the likely drops there may be 7 to 10 teams per class.

By the beginning of week 5, three to five companies will be chosen for the group project analysis, representing three to five different industry sectors, stages of development, or profile of valuation assignment. It is intended that these different categories reflect a potential variety of differing relevant value drivers, strategic considerations, sources of data, financial metrics, and relevant methodologies to valuation.

There are two sessions of the class offered during the semester. As a result, perhaps two to four teams will be presenting on each company selected. Each team should is expected to work independently.

We will be seeking three five University of Southern California supporters with category specific financial analysis and valuation expertise to act as guest lecturers and to participate tentatively during week 6, in classes on Tuesday February 19 and Thursday February 21. Participation by the guest lecturers may be either in person, or by internet based meeting.

The final choice of the company categories and companies will depend upon final commitments from the guest lecturers and will be finalized by the professor. Possible example categories: Publicly held companies: Biotech, Social Media, Internet Retailing, Initial Public Offering (IPO) related. Privately held company: possibly for Employee Stock Ownership Plan (ESOP) purposes. During week 5, teams will be assigned to each of the categories by the Professor using random selection.

The final class team presentations are tentatively scheduled to occur the 14 th and 15th class sessions: Thursday February 28 and Tuesday March 5. Team presentations will be limited to 10 to 15 minutes each, with perhaps 4 to 6 teams presenting in each class on each day. It is expected that each member of the team will participate in the oral presentation. Assignments will be graded on the quality of content as well as the organization and presentation of your analysis.

Again, just like in real life … the quality of your analysis (i.e., what you present) and how you present it are each an important component of how you are evaluated. The content of the presentation, as well as the effectiveness of the presentation will be considerations in the grading of the oral presentation. Business attire is recommended.

The guest lecturers by company category may participate in the evaluation of the team presentations for their specialist category either in person, via internet meeting, or via review of DVD of the team presentations.

Success in your careers will in part depend upon your ability to participate effectively at part of a team where the interaction does not occur on a face to face basis. In business today, individual success depends on effective collaborative interaction which occurs in via team conference calls, via internet meetings and perhaps through collaborative document development or review via the internet. One of the team project objectives is to advance each student skills in these collaborative areas. Furthermore, diminished use of face to face meetings, and increased use of these other tools increases the chances for high levels of participation by all team members whose physical location may be dispersed on or off campus during the semester.

Consistent with the themes above, the third portion of each individual’s team grade will depend on feedback from fellow team members. One of the objectives here is to encourage full participation by each team member. A questionnaire form will be due to be completed and submitted by each individual on the date of the team presentation. It is intended that the evaluations will be submitted in a manner through Blackboard that will retain the confidentiality of submissions made by one individual from the other individuals in the team being rated. The format of the questions and submissions may be something along the following lines:

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Please provide rating on a scale from 1 to 5 with 5 reflecting outstanding performance and 1 reflecting very poor performance

Names Your name: John Mary Jung Evan

Attendance at team meetings

Quality of preparation for the meetings Quality of materials contributed to team Ability to participate and contribute collaboratively via netmeetings, conference calls, shared internet real time document development, non face to face settings

Overall contribution rating

Professionalism, Attendance, Participation, Guest Speakers

Professionalism and Attendance: Consistent with the themes touched on as part of the Marshall School Strategic plan, we will seek to advance the level of students’ professionalism as part of the class. Similar to business settings of potential careers, professional conduct is expected from all students in class. Professional conduct is expected from all students in interactions with me on class related matters, both in class, and outside of class. Class related interaction occurring outside of class hours may include for example: email, telephone, voicemail, or office hours.

In each circumstance that you need to be absent, you are expected to send an e-mail message to me prior to the start of class. This is the minimum standard that you can expect to encounter in your career. Please note, while you may offer an explanation, you do not need to tell me why you will be absent. Failure to notify by email that your will miss “our meeting / class” may be viewed as unprofessional behavior.

Keep in mind that an e-mail in advance of class does not “excuse” your absence – it simply shows me that you are taking an appropriate professional stance and responsibility for choosing to do something else during class time. Students with more than two absences are likely to begin impact on their performance. Multiple absences, even when accompanied by conscientious notification, may be viewed as unprofessional behavior.

If you miss a class session, you still need to come to the next class fully prepared. You may have access to PowerPoint slides from the class if I have posted them on either Blackboard. Please contact a classmate before the next class meeting. Ask them for announcements, lecture notes, readings, assignments, etc. If you discussed the missed class session with a classmate, and you still feel you need further clarification or interpretation of the material covered, I will be glad to help. Please don’t send me an e-mail asking me to tell you what you missed in class. Of course, if a major illness or emergency arises, I will work with you to accommodate the situation. In many instances the class sessions may be recorded. At my option, and at your email request, I may provide an email to the link of the recording.

Conceptually, a pattern of absence from class, a pattern of lateness, or lack of participation and/or inattention will adversely affect your grade in the same way that such behavior would adversely affect your performance evaluations in a career setting.

Please note the guidance provided in the section of this syllabus focusing on “technology policy” for insights related to activities which may be viewed as non professional

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Participation: Class will be conducted in a manner similar to how participation is expected and treated in a career business environment. In your careers you will be expected to be paying attention and actively participating. Similarly, students are expected to actively participate in class. Class sessions will be conducted in a manner where I interweave questions to individual students with lecture on the material. Failure to provide a cogent response to any particular question will not be viewed as poor performance. However, if a student displays a pattern of not recognizing what question is being asked of them, or exhibits a lack of knowledge or lack of recognition of topical points made a few moments earlier in the lecture, that may be viewed as not actively participating in the class. The same would be expected in a career environment.

In your careers, multitasking will be required to be effective. You will need to be able to intermittently stay connected with email and texts while attending meetings. On the other hand, if email and texts undermine your effective participation in meetings, your career will suffer. Similarly, students may occasionally check computers and cell phones during class. However, if the professor observes a pattern of a student excessively focusing on computer based activities and thus not able to answer questions or appropriately participate, that may be viewed as unprofessional.

One of the objectives of the class involves tying the subject of accounting to students’ prospective career paths. To facilitate meeting that objective and to advance students deliberation on this connection we will be discussing contemporaneous news events involving accounting as a regular part of each class.

Reading of online or hard copy finance oriented sites, such as the Wall Street Journal, for not less than 10 or 15 minutes prior to the class sessions, is expected of each student for each class. Classes may include an inquiry by the Professor addressed to students chosen at random seeking insights about current events potentially relevant to the class. Outside readings by students provide a foundation of knowledge of current events, and the resulting ability to participate in class dialogue, is an important part of the learning process for this course material. Perhaps as important, developing a habit of this type of reading, and developing an area of personal business interest, is important to each student’s career.

Fellow Students in Course and the USC Family: The experience as part of the Marshall School of Business is not simply learning about facts, procedures and analysis. You are expected to get to know your fellow students in the class. Many students will have travelled thousands of miles to attend USC and this class with you. From a purely self centered, hardnosed economic perspective, it is not unlikely that your future careers could be positively impacted by that fact that one or more of the students in this course may be in positions of great authority and responsibility 20 years from now.

Name “Tents”: I will provide “name tents” and marking pens on the first day of class. There is a possibility that you names will have already been printed on these tents. If there is a first name that you prefer to use, please show it on the name tent. If student names are not pre-printed on the tents, use these materials to write the first name and last name that you wish to be called by in very large block letters.

The “name tents,” will be used for all class sessions. These will facilitate ability to call on students by name, assess participation, and should advance the ability of students to get to know one another. Naturally, it is the responsibility of students to keep the name tent in a visible location in front of them, so that I, and other students, can facilitate student participation. There are over 150 students in my 4 classes this semester. While I aspire to remember each person’s name, please help me by stating your name and class session when we happen to meet.

The name tents will also be used to facilitate recording attendance, and they must be returned to me at the end of each class. I will bring tents back to the next class for your use again. It is your obligation to pick up the name tent while in attendance to have your attendance recorded. It is your obligation to return the name tent before your departure from class to enable proper recording of your attendance. After the first class or two there will be no “verbal roll call” but attendance records will be gathered.

MARSHALL GUIDELINES

Add/Drop Process In compliance with USC and Marshall’s policies classes are open enrollment (R-clearance) through the first week of class. All classes are closed (switched to D-clearance) at the end of the first week. This policy minimizes the complexity of the

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registration process for students by standardizing across classes.  I can drop you from my class if you don’t attend the first two sessions. Please note: If you decide to drop, or if you choose not to attend the first two session and are dropped, you risk being not being able to add to another section this semester, since they might reach capacity. You can only add a class after the first week of classes if you receive approval from the instructor. For further details see http://www.usc.edu/dept/publications/cat2011/academic/policies.html If you are absent six or more times prior to April 15, (the last day to withdraw from a course with a grade of “W”), I may ask you to withdraw from the class by that date. These policies maintain professionalism and ensure a system that is fair to all students.

Marshall Grading Guidelines Course Grading Policy: Marshall’s target mean GPA is 3.0 for required classes and 3.3 for electives. The mean target for graduate classes is 3.3. Assignment/Exam Grading Policy: the instructor determines what qualifies as an accurate grade on an assignment, exam, or other deliverable, and the instructor’s evaluation of the performance of each individual student is the final basis for assigning grades for the course. Final exams and all other graded work which affected the course grade will be retained for one year after the end of the course if the graded work has not been returned to the student; i.e., if I returned a graded paper to you, it is your responsibility to file it, not mine.

Technology Policy

One objective of the technology policy in this course is to aid in your selection of personal technology usage patterns that will be effective in your chosen career after departure from USC. In your career, effective choices involve the application of “timing and level” of technology usage. Similar to the “public” classroom setting, your use of technology in public areas in your career may impact your “personal brand / business reputation.” Finally, your technology usage in work and scholastic settings may impact the effectiveness of those around you.

In your future career environment you will likely experience significant demands on your time and attention. In many environments it is not unusual to receive 60 or more business emails per day, 20 or more business voicemails, and large volumes of business associated text type messages. To be effective, an individual must strike a balance between remaining connected to these messages, while concurrently remaining focused on tasks, analysis, meetings, phone calls, worthy of and requiring devoted attention.

To be effective in your future careers you will need to be able to “tactfully” “balance” the challenge of “remaining connected” to technology, while also devoting high quality focus and attention to matters you are handling via meetings, phone calls and analysis through the day.

Consistent with this general background, I will initially permit all students use laptops, and other devices, including Internet access during lectures. No such devices will be allowed during examinations. Each student is expected to utilize this freedom in a manner that is compatible with the concepts above and consistent with a future career environment.

The following insights may be relevant in defining some general boundaries.

Unacceptable actions during class at any time: playing video games; shopping online.

Acceptable actions: Very occasional checking of texts and / or emails in a discrete manner and very brief limited replies i.e. perhaps twice in a two hour class. Loading the PowerPoint or Word documents tied to class presentations and taking notes on your computer during class is an excellent use of technology. Occasional searching of the internet for content relevant to that day’s lecture is acceptable and may add value for all in the course. Discrete occasional course related communication with fellow team members for planning of assignments is acceptable.

Statement for Students with Disabilities Any student requesting academic accommodations based on a disability is required to register with Disability Services and Programs (DSP) each semester. A letter of verification for approved accommodations can be obtained from DSP. Please be sure the letter is delivered to me (or to your TA) as early in the semester as possible. DSP is located in STU 301

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and is open 8:30 a.m.–5:00 p.m., Monday through Friday. The phone number for DSP is (213) 740-0776. For more information visit www.usc.edu/disability .

Statement on Academic Integrity

Please see details later in this syllabus related to the Leventhal School of Accounting Student Honor Code. 

Emergency Preparedness/Course Continuity In case of a declared emergency if travel to campus is not feasible, USC executive leadership will announce an electronic way for instructors to teach students in their residence halls or homes using a combination of Blackboard, teleconferencing, and other technologies.

Please activate your course in Blackboard with access to the course syllabus. Whether or not you use Blackboard regularly, these preparations will be crucial in an emergency. USC's Blackboard learning management system and support information is available at blackboard.usc.edu.

Evaluation of Your Work

You may regard each of your submissions as an “exam” in which you apply what you’ve learned according to the assignment. I will do my best to make my expectations for the various assignments clear and to evaluate them as fairly and objectively as I can. If you feel that an error has occurred in the grading of any assignment, you may, within one week of the date the assignment is returned to you, write me a memo in which you request that I re-evaluate the assignment. Attach the original assignment to the memo and explain fully and carefully why you think the assignment should be re-graded. Be aware that the re-evaluation process can result in three types of grade adjustments: positive, none, or negative.

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COURSE READINGS/CLASS SESSIONS

ACC 416

Daily activities, Tasks, Readings, Due Dates:

Class 1

1/15/2013 Week 1 Introduction and Course organization. Detail of Course Grading. Tie to career environment, critical thinking and personal strategy. Background context to the course: What students can expect from use of the tools developed in this course. Varying contexts into which financial analysis is used. Dual Importance of Strategy Assessment and Accounting based Financial Analysis.

Class 2

1/17/2013 Homework 1 due. Readings: PH Chapter 1, A Framework for Business Analysis and Valuation Using Financial Statements (10 pages) and PH Chapter 2, Strategy Analysis (17 pages); Check Blackboard for "Internal Revenue Service Revenue Ruling 59-60" (6 pages). Particular focus on Sec 3 "Approach to Valuation" and Sec 4 "Factors to Consider” Lecture: Discussion of the intertwined nature of metric based analysis and considerations of the subject company’s business strategy and economic drivers as a foundation for the financial analysis exercise. Discussion of key public filings required of publicly traded companies such as Forms 10-K, 10-Q, S-1 and segment disclosure requirements, as well as the subject matter contents included these filings. Beginning of discussion of accounting data used in metric based financial analysis.

1/21/2013 Martin Luther King Birthday, University Holiday. Last day to add or drop without a "W" for Session 431.

Class 3

1/22/2013 Week 2 Quiz 1. Readings PH Chapter 3, Overview of Accounting Analysis. Example, Professional Society Standards: Review of American Society of Appraisers Standards BVS-II Financial Statement Adjustments http://www.appraisers.org/Libraries/BV_Discipline/2009_BV_Standards.sflb.ashx Selection of Benchmark Comparable Companies and Ratio Analysis : Selection of benchmark comparable companies, development and comparison of financial ratios, accounting factors necessary to consider in assessing the conclusions to be drawn from these ratios analysis.

Class 4

1/24/2013 Homework 2 due. Reading PH Chapter 4, Implementing Accounting Analysis. Use of either the OSIRIS or Compustat databases to obtain data on benchmark comparable companies. Methodologies and tools used in efforts to assess, and potentially make changes to categorization of costs, between the benchmark companies and the subject company being analyzed to assure consistency.

1/28/2013 Monday, January 28 - Friday, February 1 USC Career Fest. Class 5

1/29/2013 Week 3 Quiz 2. Reading: PH Chapter 5, Financial Analysis. Also Deck to be placed on Blackboard ... Excerpts from EY valuation materials: Three Approaches to Valuation as per "Fair_value_advanced_section_5_slides Performing ValAnalysis.ppt." Business Analysis and Valuation models: Review of primary business valuation models within the general three categories: DCF, Benchmark/Comparable, and Underlying Assets

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Class 6

1/31/2013 Homework 3 due. Readings on Blackboard ..Excerpts from EY Slide Deck: DCF WACC, CAPM as per "Fair_value_advanced_section_3_slides Valuation Framework and models.ppt." Continued Discussion of Business Analysis and Valuation models: Review of primary business valuation models within the general three categories: DCF, Benchmark/Comparable, and Underlying Assets

Class 7

2/5/2013 Week 4 Quiz 3: Chapter 6, Prospective Analysis: Forecasting Excerpts from EY Slide Deck Section 6: Valuation process: complete reconciliation and conclude on opinion of value. Accounting Adjustments: Checklist, and Relative Importance, Adjustments to the Subject Company and Benchmark Companies.

Class 8

2/7/2013 February 7 : USC Career Day. Homework 4 . Reading: Chapter 7, Prospective Analysis: Valuation Theory and Concepts. Differences in accounting metrics, and accounting related adjustments that may be appropriate for financial analysis based on varying industry sectors, company life stage or purpose of analysis.

Class 9

2/12/2013 Week 5 Quiz 4: Chapter 8, Prospective Analysis: Valuation Implementation Final choices to be made by the beginning of Week 5 of the five categories of companies to be used in the group projects. Professor to announce the members of each team during this week, primarily assigned through random drawing process. Each team to be assigned to a specific category of company through random drawing process. Lecture: Projection of the Income Statement, Cash Flows and Balance Sheet. February 12: USC "Meet the Firms" California Science Center (Accounting Society)

Class 10

2/14/2013 Homework 5. Reading: Chapter 9, Equity Security Analysis. Beginning of student teams’ work on “outside of class” specific companies by industry sector

2/18/2013 President's Day: University Holiday Last day to drop with a "W"

Class 11

2/19/2013 Week 6 Possible Quiz 5. Reading to be assigned and focusing on accounting and valuation metrics of particular relevance by industry sector. Five Industry Sectors Focus on February 19 and 21. Five guest lecturers of approximately 25 minutes each during these classes and focusing on financial analysis and valuation by company category consistent with the team assignments. Guests to participate either in person or via internet meeting. The final choice of the company categories and companies will depend upon final commitments from the guest lecturers and assessment by the professor. After guest lecturers and in remaining class time, student teams to work on their specific companies and including visits to the teams by the Professor. February 19 Last Day to Drop with a “W”.

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Class 12

2/21/2013 Reading to be assigned and focusing on accounting and valuation metrics of particular relevance by industry sector. Continuation of Five Industry Sectors Focus from February 19. Remaining presentations from original group of five guest lectures. Approximately 25 minutes each during these classes and focusing on financial analysis and valuation by company category consistent with the team assignments. Guests to participate either in person or via internet meeting. The final choice of the company categories and companies will depend upon final commitments from the guest lecturers and assessment by the professor. After guest lecturers and in remaining class time, student teams to work on their specific companies and including visits to the teams by the Professor.

Class 13

2/26/2013 Week 7 Quiz 6. Readings posted on Blackboard. In Class Valuation efforts by teams with Professor moving from team to team: Market Comparable, DCF and Underlying Assets

Class 14

2/28/2013 Possible guest lecture. Initial Team presentations.

Class 15

3/5/2013 Week 8 Final Team Presentations

Class 16

3/7/2013 Final Exam

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LEVENTHAL SCHOOL OF ACCOUNTINGGRADING AND ACADEMIC STANDARDS

FOR UNDERGRADUATE STUDENTS

The Leventhal School of Accounting adheres strictly to the grading standards of the University and the School of Business Administration. Additionally, the Leventhal School of Accounting has supplemented those standards with certain others. For students' convenience, and to prevent misunderstanding, these additional standards are summarized below.

GRADING STANDARDS

The following grades are used: A - excellent; B - good; C - fair; D - minimum passing; F - failure. The grade of F is awarded for failing work at the end of the semester. The assignment of minuses and pluses when earned is required.

The grade of W (Withdraw) is assigned if the student officially withdraws after the third week but before the end of the twelfth week of the semester. No withdrawals will be permitted after the end of the twelfth week except by student petition to the University's Committee on Academic Policies and Procedures.

Students may elect to audit courses during the first three weeks of the semester. A course taken for audit (V) will be assessed at the current tuition rate. A course taken for audit (V) will not receive credit and will not appear on the USC transcript or grade report. Under no circumstances will the University allow a change in the registration status of a course from letter grade or credit to audit (V) or vice versa after the third week of a given semester.

Incomplete Grades Explanation An incomplete (IN) grade may be assigned due to an “emergency” that occurs after the 6 th week of classes for half semester courses or the 12th week for full-semester courses.. An “emergency” is defined as a serious documented illness, or an unforeseen situation that is beyond the student’s control, that prevents a student from completing the semester. Prior to the 6th or 12th week, the student still has the option of dropping the class. Arrangements for completing an IN course should be initiated by the student, and negotiated with the instructor. Class work to complete the course should be completed within one calendar year from the date the IN was assigned. The IN mark will be converted to an F grade should the course not be completed.

Academic Integrity – Leventhal School of Accounting Honor CodeStudents enrolled in any class offered by the Leventhal School of Accounting are expected to uphold and adhere to the standards of academic integrity established by the Leventhal School of Accounting Student Honor Code. Students are responsible for obtaining, reading, and understanding the Honor Code System handbook. Students who are found to have violated the Code will be subject to disciplinary action as described in the handbook. For more specific information, please refer to the Student Honor Code System handbook, available in class or from the receptionist in ACC 101.

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G.P.A. PREREQUISITES FOR UNDERGRADUATE ACCOUNTING COURSES

The grade point average prerequisites for any undergraduate student enrolled in any accounting course is a minimum 2.5 gpa for all completed accounting courses. In computing grade point average prerequisites, BUAD 250ab, 280, 281, 305 and 302T are considered accounting courses.

Grades in accounting courses taken at other institutions will not be included in the computation of the cumulative accounting grade point average.

When a student's cumulative accounting grade point average falls below 2.5, the student is placed on probation. If a student on probation does not regain a minimum accounting cumulative GPA of 2.5 after completing the next 12 semester hours in all courses (including accounting courses) attempted within the University, that student will not be permitted to continue as an accounting major in the Leventhal School of Accounting. Exceptions to this policy may be granted only in unusual circumstances by the Academic Standards Committee of the Leventhal School of Accounting. Decisions of the Academic Standards Committee are final.

To be removed from probationary status, a student may elect either to take another accounting course or courses for which prerequisites are met or to repeat an accounting course or courses in an attempt to earn a higher grade. Regardless of the course of action taken, all courses completed will be counted in computing the cumulative accounting grade point average.

The grade of "W" in an accounting course taken while a student is on probation will not extend probation. The probation period ends at the end of that semester during which the student completes a cumulative total of 12 semester hours of courses in any subject(s) at the university. Under no conditions will the student be permitted more than two successive semesters, including the summer semester, to complete the 12 semester hours of courses.

Students must attain a minimum 2.5 cumulative accounting grade point average to graduate with a Bachelor of Science in Accounting degree.

See the USC Catalogue for further restrictions on including grades in repeated classes in the overall grade point average computation.

OTHER ACADEMIC STANDARDS

1. The ability of students to write clearly and concisely is a necessary prerequisite to success in accounting work. Accordingly, students will be required to demonstrate writing capability in all accounting courses. This may be accomplished primarily through the inclusion of essay-type questions on course examinations.

Important Dates for Spring 2013

First Day of Class Monday, January 14

Martin Luther King Day, University Holiday Monday, January 21

Last Day to Add or Drop w/out a “W” (Session 431) Tuesday, January 22

Resumes for Resume Book Due Wednesday, January 30 at 5pm

Last Day to Add or Drop w/out a “W” (Regular session) Friday, February 1

Meet the Firms Thursday, February 12, 6pm-9pm

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Presidents’ Day Monday, February 18

Last Day to Drop with a “W” for ACCT courses (Session 431) Tuesday, February 19

Final Exams for ACCT courses (Session 431)

Friday of Classes for ACCT courses (Session 442)

Spring Break

Monday, March 4 - Friday, March 8

Monday, March 11

Monday, March 18 – Friday, March 22

Last Day to Add or Drop w/out a “W” for ACCT courses Session 442)

Monday, Monday, March 18

Last Day to Drop with a “W” for regular session classes Friday, April 12

Last Day to Drop with a “W” for ACCT courses (Session 442) Monday, April 15

Last Class Meeting

Study Days

Friday, May 3

Monday & Tuesday, May 6 & 7

Final Examinations Wed., May 8 – Wed. May 15

Commencement Friday, May 17

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