BA 528 – Financial & Cost Analysis (3 Credits)
Course Syllabus – Fall 2007
Professor: Monica Banyi, Ph.D., CPA
Office: 224D Bexell Hall
Class Times: Section 1: W 12pm – 2:50
Section 2: W 6pm – 8:50
Office Hours: Mon 3:00 – 4:00; T 4:30 – 5:30; Weds 10:00 – 11:00;
Or by appointment
Prerequisites: BA 211, BA 213
BA 528 is designed for students with a basic foundation in financial and managerial accounting concepts
which are obtained in the prerequisite courses, BA 211 and BA 213. This course will prepare
professionals to use financial and managerial accounting information to make effective business
decisions, to identify opportunities in the business world, and to take advantage of those opportunities.
The course will provide a framework to help understand the nature, purpose and importance of decision-
useful and decision-facilitating financial and managerial accounting information; appreciate the
limitations of financial accounting information; understand how economic transactions map into financial
statements; and understand how cost information is used in internal operational and strategic decision
making. This framework will consist of four components: (1) business strategy analysis, (2) accounting
analysis, (3) financial (ratio and cash flow) analysis, and (4) prospective (forecasting) analysis.
BA 528 is a core course in the MBA program. Although the primary purpose of this course is to provide
you with the financial and managerial accounting knowledge applicable to many careers, it is secondarily
intended to provide you with the tools necessary to complete portions of the IBP project.
• Distinguish the business strategies adopted by different businesses to create value for their
• Demonstrate the ability to analyze, interpret and use financial statements and cost information
effectively, both from a manager’s and investor’s perspective.
• Recognize the limitations of financial statement information and how managerial estimates,
judgments, and conflicting motivations impact the quality of financial information and can
disguise true economic performance.
• Using the knowledge and interpretations gained from a financial and business analysis, develop,
appraise, and combine a model to forecast future earnings and cash flow performance.
Regular attendance and active participation are imperative if this class is to be a meaningful experience
for all students. An excessive number of absences and/or lack of active participation will be considered
when determining the final grade in this course. Students are expected to treat their fellow students and
instructor with respect. Professionalism will pervade our classroom conduct. It is not professional to
impede a colleague’s desire to learn. The following rules are a basis of the professional behavior within
• Students are expected to attend and be prepared for all regularly scheduled classes. Timely and
sustained presence is mandatory – please do not disrupt class by walking in late or walking in and
out of the room.
• Students are expected to participate in class discussion of assigned homework and case material.
• Please turn off all cell phones, pagers, laptops, etc. before class begins.
• Private discussions, comments, etc. are not appropriate in the classroom unless they are with your
group during the assigned time.
• Students will abide by the University’s academic misconduct rules and procedures.
All efforts to promote a friendly, constructive learning environment (attend all classes, frequently
participate in class), are greatly appreciated and will enhance your grade. Alternatively, actions that can
damage the learning environment of the class are strongly discouraged as they can hurt other students’
learning and grades. Achieving the course objectives will require a great deal of effort on both of our
The class will consist of lectures, discussion of assigned readings and homework problems, and cases.
Large lecture classes are not always conducive to learning. In an effort to overcome this, you will be
assigned to smaller study and project groups. You will sit together in class, complete group projects, and,
hopefully, support each other in completing this course. At the end of the term, I will ask you to
anonymously evaluate your fellow group members’ contributions to the group learning environment.
One group project will be due (in two phases) during the term. Each phase will be collected at the
beginning of class (with portions distributed to your classmates) on the due date. Electronic submissions
are not accepted. The specific requirements and expectations of the project will be discussed in detail in a
separate document. See the attached assignment schedule for assignment due dates.
Oral “Issue” Presentation
Once during the term, each group will make a 10-15 minute presentation where it describes an accounting
issue (as selected by the instructor) of its assigned companies. These presentations should include a
description of issue or problem, an explanation of the financial statement impact, and an assessment of
the issue’s impact on a user’s ability to assess future financial performance. It is recommended that the
group meet with the instructor at least one week prior to the presentation.
Text book knowledge does not provide a complete set of solutions to real-world accounting issues. In
order to experience how managerial decisions impact and are impacted by accounting information, we
will frequently uses accounting cases to illustrate concepts discussed in class. Written evidence of your
case preparation is required and a copy must be submitted at the beginning of the class session. This
requirement comprises a portion of your participation points outlined below.
Assigned Homework Problems
To understand how accounting information impacts managers, an understanding of the mechanics behind
the construction of financial and managerial information is necessary. Each week, a selected set of
problems may be assigned to familiarize the student with computations necessary to prepare accounting
information. These problems will function as a basis of our class discussions.
BA 528 is not a student’s first accounting course. As students come from diverse backgrounds and
experiences, it is important to establish a baseline of prerequisite knowledge required of all class
members. Without a solid understanding of the prerequisite material, BA 528 will prove very difficult.
The prerequisite assessments are administered on Blackboard and will allow students to evaluate their
own preparation for the course. Students must meet the prerequisite requirements (i.e. passing the
assessments or completing all attempts) by 5pm, Friday September 28th or will receive a 5% deduction
in their final course grade.
Individual Assignments: Two individual assignments will be distributed during the term. These
assignments are more “technical” in nature in that they assess how well a student can summarize and
prepare financial and cost information, focusing on the accounting knowledge that is minimally necessary
to complete the IBP project. The first case will assess your ability to prepare financial statements for a
business, while the second case will ask you to prepare costs analyses and operational budgets for a
Your class participation score is based on the following: quality of written evidence of weekly
preparation (if collected); quality (not quantity) of responses during class discussions; evidence of
preparation in classes, and attendance in class. In-class participation is graded on a scale from 0 (lowest)
through 4 (highest). The criteria focus on what you demonstrate and do not presume to guess at what you
know but do not demonstrate. I expect the average level of participation to satisfy the criteria for a “3”.
Evaluation of Student Performance: The following items may comprise your final grade:
Class Participation 15%
Individual Assignments 10%
Group Project 30% (5% oral “issue” presentation)
Mid-term Exam 15%
Final Exam (12/05) 30%
The midterm and final examinations will address material discussed over the term. The mid-term exam
will been an INDIVIDUAL, open resource assessment while the final is a closed-book examination
offered on the regularly scheduled examination date. Further information on these examinations will be
given to you at the appropriate times.
At the end of the course, after the final exam, letter grades will be assigned based on a percentage of
points earned to total points available. It is the responsibility of the student to withdraw from the course
on or before the deadline. Failure to complete minimum requirements will result in a failing grade.
REQUIRED: Leonard Soffer and Robin Soffer, Financial Statement Analysis: A Valuation Approach
(Prentice Hall, NJ 2003)
RECOMMENDED: An introductory financial and managerial accounting book
Additional Course Information:
Academic Integrity: Academic dishonesty is not tolerated in any form. The instructor will enforce the
University’s academic integrity rules to the fullest extent and this may result in a student receiving a
failing grade for the course. For detail of the University’s policy of academic integrity, please see
Spreadsheet Policy: Over the term, students will need to use spreadsheet software packages to prepare
financial statements and financial analyses, both for class preparation activities and for graded
assignments. All spreadsheets must be original, created by the student turning in the spreadsheet, and
not previously prepared for any other purpose. The use of “canned” spreadsheets or those prepared by
business associates and past MBA students do not further the learning activities in our course. The
instructor considers the violation of this policy as a reason to award a failing grade on the assignment or
Use of Analyst Reports: Each group will prepare a formal analysis on a publicly traded company. It is
required that students only consult information that is freely (i.e. at no monetary cost) available to an
enrolled OSU student. Thus, information obtained from the site license of Standard & Poor’s Net
Advantage is a legitimate use of information; the use of analyst reports obtained from your brokerage
account which are not freely available to all other students are considered unauthorized sources. The
instructor considers the violation of this policy as a reason to award a failing grade on the assignment.
Availability of Graded Assignments and Grading Errors: Graded assignments are returned during class.
If you miss class when an assignment is returned, please see the instructor during office hours. All
graded exams remain the property of the instructor. Students may examine graded tests at any time
during the term during office hours or by appointment. Students have two weeks after an exam or other
graded assignment is returned to bring grading errors to the instructor’s attention.
Statement Regarding Students with Disabilities: Accommodations are collaborative efforts between
students, faculty and Services for Students with Disabilities (SSD). Students with accommodations
approved through SSD are responsible for contacting the faculty member in charge of the course prior to
or during the first week of term to discuss accommodations. Students who believe they are eligible for
accommodations who have not yet obtained approval through SSD should contact SSD immediately at
The instructor reserves the right to make changes to this syllabus and course schedule as necessary.
Students are responsible for all material covered in class and any announcements made during class
or through e-mail.
Course Schedule -- BA 528
*Please consult group presentation schedule for your individual section.
Date Event Topics Readings
Week 1 Course Introduction Chapter 1
Chapter 1 – Introduction to security analysis
Week 2 Business Analysis Chapter 3, 4
Assignment #1 Accounting Analysis and the Financial Statements: Reading Handout
DUE Operating Income
Week 3 Accounting Analysis and the Financial Statements: Chapter 4, 5
Operating Assets, Owner Financing
Week 4 Accounting Analysis and the Financial Statements Chapter 4, 5
Non-owner financing and Off-Balance Sheet Financing
Week 5 Phase 1 DUE Inventory Issues & Operational Budgeting and Profit Planning
Week 6 Mid-Term Tax Issues for Small Business Enterprises
** DUE ** Guest Lecturer: Larry Brown, Executive in Residence
Week 7 Economic Balance Sheet Chapter 6
Week 8 Assignment #2 Free Cash Flow Model and Analysis Chapter 9
Week 9 Adjusting and Forecasting Financial Statements Chapter 10
Week 10 Phase 2 DUE A “Theory of Multiples” Chapter 16
Dec. 5th Final Exam
BA 528 – Survey
Name for nameplate: Hometown:
Where did you fulfill your introductory financial and managerial courses? How long ago?
Are you a full or part-time MBA student?
Please briefly describe your education and work experiences over the past five years.
For MBA students: What is your main reason for pursuing an MBA? at Oregon State?
For other graduate students: How does this course fit into your educational program?
What is your main goal for this course?
What is your biggest fear about this course?