MBAD 6234-ON FINANCIAL MANAGEMENT

March 16-May 3, 2015

SYLLABUS

This module follows MBAD 6233-ON Financial Markets.

Notify me immediately if you did not take that module in Jan-Feb 2015.

PROFESSOR NEIL G. COHEN, DBA, CFA

Office: 501B Funger Hall; 2201 G St. NW; Washington, DC 20052; USA
Office Hours: Telephone and Skype meetings arranged vie e-mail.
Email: ngcohen@gwu.edu

INSTRUCTORS

Section N30: Facilitated by Neil G. Cohen, the lead professor for this course.
Section N31: Facilitated by Davide Sonzogni, an adjunct professor working with
Professor Cohen.

MBAD 6234 - FINANCIAL MANAGEMENT (1.5 CREDITS)

Catalog D e s c r i p t i o n : This c o u r s e i s th e s e c o n d f i n a n c e m o d u l e o f tw o r e q u i r e d f o r
M B A students. It may not be used to satisfy a second-level requirement. Theory, policy and
practice in financial management are emphasized. Financial analysis, sources of funds, investing,
capital planning
and
budgeting, and dividend policy and working capital management
are
also covered.
Key Prerequisites: Financial Accounting and Basic Statistics, Financial
Management
In plain English, this course is about the techniques of financial analysis and decision making as
practiced by corporate financial managers (inside t h e c o m p a n y ) a n d t h e c o m m e r c i a l a n d
investment bankers (outside the company) who advise them in raising the funds they need. Its
objective is to give you working knowledge of working capital policy, capital budgeting, financing
with debt and equity, project finance, dividend policy, valuation, and investment banking (venture
capital, private equity, initial public offering, leveraged buyout, a n d m a n a g e m e n t buyout). The
course follows a hands-on, learn-by-doing, workshop approach with assignments built around
case studies. The emphasis is on practical applications for analysis and decision- making. Two
of t h e t h r e e c a s e s t u d i e s , a n d m a n y o f t h e a r t i c l e s , a r e a b o u t h e a l t h c a r e
applications t o help you learn m o re a b o u t th e healthcare b u s i n e s s a s you learn fin a n c ia l
analysis and decision-making.

PREREQUISITES
The administrators t e l l me that every student in this course has completed the accounting
course, so that knowledge is assumed, which means that you learned Time Value of Money in
addition to accounting basics. You must also have completed MBAD 6233 Financial Markets;
6233 and 6234 are two modules of the core course in Finance.

MBAD 6234 FINANCIAL MANAGEMENT COURSE OBJECTIVES

At the end
1.
2.
3.
4.
5.
6.
7.
8.

of the course, you will be able to:

Size up companies using their financial statements and financial ratios
Forecast cash flows intelligently, i.e., be able to do cash flow analysis
Use cash flow analysis to determining if project proposals create or destroy value
Know how to measure debt capacity and decide whether to finance growth with debt
or equity
Know how to value businesses and parts of businesses
Understand strengths and weaknesses of cash flow analysis done by you or
presented to you by others.
Appreciate the above in the context of healthcare industry examples
Understand that the techniques of financial decision making apply to non-profits,
government organizations, and NGOs as well as to for-profit businesses.

THE BIG DIFFERENCE

BETWEEN MBAD 6233 FINANCIAL MARKETS
AND MBAD 6234 FINANCIAL MANAGEMENT
Financial M a n a g e m e n t 6 2 3 4 i s b u i l t a r o u n d c a s e s t u d i e s , a l e a r n -by-doing
a p p r o a c h , t o accomplish t h e c o u r s e o b j e c t i v e s l i s t e d a b o v e . You w o r k i n
E x c e l s p r e a d s h e e t s , make calculations leading to numerical results, and then use those
results to guide yourself to a decision/recommendation where you put yourself in the shoes of
the managers in the case. Where Financial Markets 6233 asked you to do calculations to
straightforward questions with (mostly) definite answers, in Financial Management 6234 there is
no definite right answer; thats why the weekly Guideline Answer document is called Guideline
Solutions, to emphasize that there is no single right answer. Often, when managers make a
decision, it may take months or years before they know if their decision was the right one. Often,
among a group of managers, they find it hard to agree on a decision.
The emphasis is on learning the process of financial analysis so you can put the numbers
together and get results. Then you interpret those numbers, applying judgment and critical
thinking, incorporating the facts in the case, and arrive at a decision which you must justify using
the analysis you did. This is the practitioner approach very close to what goes on inside
companies. Different people may interpret the same data in different ways depending on their
backgrounds, biases, and attitudes about risk. That is normal and to be expected!
Effective managers must know how to use, and avoid misusing, financial information. Effective
managers must know how to ask the right questions when financial information is presented to
them by internal financial people and by external financial advisers. Financial Management
6234 gives you that knowledge.

REQUIRED TEXTBOOK & CASE STUDIES

1. Cohen Finance Workbook PDF: Financial Analysis and Decision Making
Handbook: Text and Excel Templates (gratis download from Cohen Finance
Workbook link on main course menu)
2. Case studies downloaded as a custom Coursepack from Harvard Business
Publishing. You pay $3.95 per case. Register first, then go to the Coursepack
site and pay for the four cases and download them. The link is posted on
Blackboard as How to Buy Cases.

Other Materials

The Wall Street Journal. Because of your heavy workload, I cant and wont make
this a requirement, but, if you have the time to scan the paper daily, there is much to
be gained. To get a generous student discount on The Wall Street Journal, go online to
find heavily discounted student rates. http://wsj.com/studentoffer
The business section of The New York T i m e s i s a good alternative to The Wall
Street Journal.
Financial Times is efficient with tightly written, often shorter articles than WSJ and
NYT.GWSB students get a free online subscription to Financial Times. To my
amazement, you must visit a computer lab in Duques Hall to go online and register for
your free subscription. Its worth the trouble, unless you dont live in the DC area. (If
you dont, ask the Dean what can be done to get your subscription.)

COMMUNICATIONS
Communication takes place via e-mail and the Blackboard Announcements page. You are
encouraged to email me freely. I welcome it. Most emails are answered quickly. Be 100% sure
that you are receiving the email messages sent via Blackboard. If you dont check your GWU
email account daily, forward that email to your everyday account. (To set up forwarding, from
your o w n G W e m a i l w e b p a g e , c l i c k S e t t i n g s
(geared w h e e l i n u p p e r -right
c o r n e r ), t h e n Forwarding and POP/IMAP, then forwarding (one line down), and follow
instructions

CRITICAL THINKING AND ANALYTICAL WRITING

Imagine that the audience (reader) for your assignment write-ups is a real workplace colleague
or supervisor, or a client - not a professor. Frame it as if your boss or client is reading it. The
focus is on analysis, interpretations and judgments. Do not copy the information in the assigned
material; its your interpretation/decision/recommendation that I want to hear.

WORKLOAD & DEADLINES

I know that most of you are taking this course along with other courses, plus your job, plus your
personal responsibilities. The workload for this course is planned to average six hours per work,
but individual differences can make it higher or lower. You are expected to be aware of the
deadlines for deliverables and to plan ahead. There is no slack time; avoid getting behind.
The weekly deadline for submitting assignments is Sundays at 11:59PM in your own time zone.
Some flexibility can be accorded, if necessary, with an unofficial last-minute deadline of
Tuesdays at 9:00AM Eastern time. Once the Guideline Solutions file is posted, assignments are
considered late and cannot receive credit.

WISE STUDENTS WORK BACKWARDS

Avoid reading a chapter in the Cohen Finance Workbook from start to finish, highlighter in
hand. Instead, read the assignment advice in Blackboard, scan the reading, and digest the
scope of the work required, i.e., assignment questions and/or discussion. Then, do the reading
with focus, selectively, to learn how to do the work. Dont spin wheels! If you dont understand
something after a reasonable effort, ask me. If you dont know the meaning of a term or
concept, look it up in the Cohen Finance Workbook, Google, or Wikipedia.

EXCEL SKILLS & OPENING EXCEL FILES

1. Excel templates are used throughout the course, and all assignments are completed in
Excel templates. If you need help with Excel, the Custom Excel Tutorial is posted on the
Bb Main Course P a g e u n d e r Excel I s s u e s . Be careful a b o u t using o th e r
tutorials because they can go far beyond the skills needed for this course. If you need
help with Excel, ask!
2. Be aware of the workarounds if you have trouble downloading an Excel file or the tabs at
the bottom of the file are not visible (chances are its a problem with your computer
settings rather than a problem with the Excel file).
o Workaround 1- right clicks on the link, save the file to your hard drive, and open it
from there.
o Workaround 2- clicks WINDOWS in the Excel menu at the top of the screen, and
then clicks NEW WINDOW.
o Workaround 3- click VIEW in the Excel menu at the top of the screen, then
click FULL SCREEN. You can also manipulate the little boxes at the top of the
screen to maximize or minimize the screen view. Also, get in the habit of saving
all files with your name in the file name, and saving them to a known folder so
they do not get lost.
One caveat: I cant troubleshoot your hardware, software, and broadband connection. Years
ago, I was much better at IT than I am now. But now, there are too many combinations of
browsers, settings, firewalls, popup blockers, versions of MS Office and ISP settings for me to
conquer. I offer any and all aid possible on finance; managing your computer is your own
responsibility.

PREPARATION IS WORK-IN-PROCESS NOT FINISHED PRODUCT

You are not expected to produce perfect results in your problem assignments and case study
analysis and recommendations. They will come out less than perfect, especially early in the
course. They are the basis for your learning, combined with the annotated narrative in the
guideline solutions that you receive following submission of your homework. It is all about
practice. Your ability will escalate as the course progresses. Think of financial analysis and
decision making as a skill like playing tennis; the more you practice, the better you get. Did
Venus Williams become a tennis champion by listening to lectures and watching others? How
do you get to Carnegie Hall?

SCHEDULE & POINT ALLOCATION

SPRING 2015 MBAD 6234
WEEK
1-Mar 16-22
2-Mar 23-29
3-Mar 30-Apr 5
4-Apr 6-12
5-Apr 13-19
6-Apr 20-27
7-Apr 27-May 3

ASSIGNMENT
LIVE
TEMPLATE
DISCUSSION
TOPIC
Financial Ratio Analysis
6.0%
Financial Statement Forecasting
7.0%
8.0%
Capital Budgeting I
8.0%
Capital Budgeting II
10.0%
8.0%
Equity Valuation
10.0%
Financing wirh Debt & Equity
10.0%
8.0%
Merger & Acquisition
100.0%
51.0%
24.0%

LEVEL OF
DIFFICULTY
easy to medium
medium
demanding
demanding
medium
medium
25.0% demanding
25.0%

EXAM

Notice that weights on the early assignments are lower, increasing as your skills increase.

NO EXTRA WORK IS OFFERED! Allowing some students to submit extra work is not equitable
to the others.

GRADING
The Business School MBA Faculty Task Force recommends a final grade distribution averaging
between 3.2 and 3.4 (B=3.0; A=4.0) with no more than 20% of the class receiving a grade of A.
Adjustments may occur if warranted by the distribution of grades. Write ups, discussions, and
the project are graded based on 100 points each, using the conversion scale below.

Point to Letter Grade Conversion

100-95
94-90
89-86
85-81
80-78
77-74
73-70
69-65
Below 65

A
AB+
B
BC+
C
CF

MAINTAINING ACADEMIC INTEGRITY

This course observes the regulations for academic integrity published by the University.
http://www.gwu.edu/~ntegrity/code.html Any violation of the code is grounds for a
course grade of "F". Submitted work derived from teamwork, if any, requires attribution
about who did what. All sources must be cited on all submissions.
Assignments you submit may be run through Safe
Assign.
You may be asked to sign a pledge of academic integrity on each assignment you
submit.

ABOUT PROFESSOR COHEN

On the finance faculty at GWU since 1979, Professor Cohen specializes in an active style of
teaching using the case method, where students learn-by-doing as they evaluate real financial
problems and m a k e r e c o m m e n d a t i o n s for a c t i o n . He u s e s t h i s p e d a g o g y
in p r o g r a m s throughout the School: BBA, MBA, Executive MBA, Masters of Science in
Finance, the online Health Care MBA, and Online Learning Initiative, as well as in short courses
for managers and executives.
Professor Cohen is the author, co-author, or supervising advisor of case studies in the fields of
corporate f i n a n c e , i n v e s t m e n t s a n d p o r t f o l i o m a n a g e m e n t , a n d p e r s o n a l f i n a n c e .
He i s a member o f t h e E d i t o r i a l B o a r d o f t h e C a s e R e s e a r c h J o u r n a l . Many o f
h i s c a s e s a n d collaborations were written about companies in Central and Eastern Europe.
Professor C o h e n w r o t e o n e o f the f i r s t b o o k s c o m b i n i n g c o m p u t e r i z e d
s p r e a d s h e e t s a n d financial analysis. This book was translated into Hungarian and published
by the Hungarian- American Enterprise Fund. He was the impresario and editor for a
casebook Obstacles to Trade, G r o w t h , I n v e s t m e n t a n d C o m p e t i t i v e n e s s about
b u s i n e s s e s i n A l b a n i a , B u l g a r i a , Kosovo, Macedonia, and Montenegro, guiding local
experts who assembled data and interviewed managers. His manuscript Personal Financial
Advising: Concepts and Cases is the basis of an academic course designed to train
professional personal financial advisors. An innovator in online teaching, he designed and
directs two courses for the Business Schools Health Care MBA Program using video and audio
modules to enhance the text-based lectures.
He was a visiting professor at the Central European University Business School in Budapest,
where he first taught in 1994 as a Fulbright professor, and is a visiting professor at Stockholm
School of Economics Riga. He lead management development programs in business finance
and investments for companies such as ABB Prague, Coca-Cola Moscow, Creditanstaldt, Kraft
Jacobs Suchard, MOL (Hungarian Oil & Gas Company), US Steel Slovakia, and Oracle, as well
as open programs in Bratislava, Prague, Zagreb and Riga.

He earned an MBA from the University of Michigan, a DBA from the Darden School at the
University of Virginia, and a CFA from the Chartered Financial Analyst Institute.