THE MCDONOUGH SCHOOL OF BUSINESS, GEORGETOWN UNIVERSITY

ACCOUNTING 555
FINANCIAL ANALYSIS FOR MANAGERS AND INVESTORS
Hariri 340, Spring 2020

Jason Schloetzer, Sonneborn Term Associate Professor of Business Administration

Hariri #521

Course Description

This course focuses on financial decision making and performance evaluation within firms.
You will learn techniques used by organizations to transform data from internal accounting
systems into information that supports corporate strategy implementation. The focus is on
effective business management, including how leaders allocate resources to maximize
value, control production, inform product pricing, and evaluate the performance of business
units and personnel. What you learn in this course will help you understand the inner-
workings of your future employer (enabling you to be more successful), and help you
understand other organizations you encounter in your role as consultant, competitor, or
investor.

Course Take-Aways

 Acquire knowledge of how leaders control and coordinate functions across the company
 Identify the information you need to make value-added operating decisions
 Understand how cost allocation can obscure product and customer profitability
 Develop the skills needed to correctly analyze budgeted versus actual performance
 Reinforce the philosophy of management that people matter and “make things happen.”

Learning Materials (listed in order of importance for this course)

 Lecture slides presented in class (available on Canvas)

 Textbook practice problems and readings (available on Canvas)
 Selected chapters from “Managerial Accounting: An Introduction to Concepts, Methods,
and Uses” 11th Edition by M. Maher, C. Stickney, and R. Weil. These are listed on Canvas as
“Canvas textbook reading” with associated “Canvas textbook practice problems” for each
topic (available on Canvas).

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Performance Evaluation

Your course grade is determined as follows:

Four Quizzes on Canvas (drop lowest quiz score) 36 %

Comprehensive final exam 64 %
100 %

Grades are calculated after applying the appropriate weights to each of the components, and
then applying a curve based on the following from the MSB MBA Student Handbook:

“The maximum mean grade is 3.50 for each MBA core and elective course at
McDonough. All daytime sections of a particular course taught by the same instructor
are combined for the purpose of determining the max mean...There are no
requirements regarding the distribution of grades around the mean; simply, the
mean may not exceed the maximum.”

Quizzes

There will be four quizzes administered via Canvas. The quizzes will occur outside of class
time. Quizzes will be open book, open notes, and you may work with another classmate. I will
create multiple versions of the quiz by randomly selecting questions from a database stored in
Canvas. Make-up quizzes are only permitted if the MBA Program Office contacts me to
confirm you have an approved conflict. I will drop the lowest quiz score, so only three of
the four quizzes will contribute toward your final course grade.

Final Exam

The final exam will reflect the material covered in class and is designed to be challenging.
You will need your own calculator—mobile phones, tablets, laptops, graphing calculators,
and/or other electronic devices are not permitted during the exam. You can bring one 8 ½ X
11 sheet of paper (front and back) of notes to the exam. Make-up exams are only permitted
if the MBA Program Office contacts me to confirm you have an approved conflict.

Fairness and Integrity

I emphasize fairness to all students taking the course. Please do not be unfair to other
students, or ask me to make exceptions that are unfair to other students. In order to ensure
fairness and on behalf of the overwhelming majority of honest students, I will refer anyone
suspected of cheating to the MBA Program Office. Cheating is wrong from an ethical
standpoint, and cheating does not make sense practically, because the expected costs to the
cheater far outweigh any small benefits.

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Additional Information

MSB Community Standards

Please see the ‘Community Standards of Conduct’ section of the MSB MBA Student
Handbook 2018-2019. Students found guilty of community standards violations are subject
to sanctions that can include failing the class, a permanent notation on academic
transcripts, and/or dismissal from the MBA Program.

Academic Accommodations

Please see the ‘Accommodations for Disabilities’ section of the MSB MBA Student Handbook
2018-2019.

Religious Observances

Please see the ‘Religious Holiday Observances’ section of the MSB MBA Student Handbook
2018-2019.

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 COST-BASED STRATEGIC DECISION MAKING
Class Date Topic Readings and other materials posted to Canvas
Reading: The parable of red pens and blue pens

1 March 16 The Nature of Costs

Canvas textbook practice problems: Chapter 5: 8, 19-22; 29(b)
Canvas textbook reading: Cost Drivers and Cost Behavior
Canvas textbook practice problems: Chapter 7: 22-3, 27, 29, 34, 37-8
2 March 18 Cost-based Strategic Decision Making
Canvas textbook reading: Differential Analysis of Relevant Costs

March 20-22 Quiz 1 to be completed via Canvas

MEASURING AND MANAGING CUSTOMER AND PRODUCT PROFITABILITY

Class Date Topic Readings and other materials posted to Canvas
Reading: Measuring and managing customer profitability

3 March 23 Estimating Customer & Product Profitability

Canvas textbook practice problems: Chapter 2: 19-22
Canvas textbook reading: Measuring Product Costs
Canvas textbook practice problems: Chapter 3: 26-7, 29, 35
4 March 25 Estimating Customer & Product Profitability
Canvas textbook reading: Activity-Based Costing/Management

March 27-29 Quiz 2 to be completed via Canvas

Canvas textbook practice problems: Chapter 3: 26-7, 29, 35

5 March 30 Estimating Customer & Product Profitability
Canvas textbook reading: Activity-Based Costing/Management
EVALUATING MANAGERS AND THEIR DECISIONS
Class Date Topic Readings and other materials posted to Canvas
6 April 1 Profit & Cost Center Performance Evaluation Readings: McKinsey & Company regarding zero-based budgeting

Canvas textbook practice problems: Chapter 9: 25-6, 31, 34, 40

 Canvas textbook reading: Profit Planning and Budgeting

April 3-5 Quiz 3 to be completed via Canvas

Practice problems: Chapter 10: 24, 42, 47, 62

7 April 6 Profit & Cost Center Performance Evaluation
Canvas textbook reading: Profit and Cost Center Performance Eval.

Practice problems: Chapter 10: 24, 42, 47, 62

8 April 8 Profit & Cost Center Performance Evaluation
Canvas textbook reading: Profit and Cost Center Performance Eval.
Practice problems: Chapter 10: 24, 42, 47, 62
9 April 15 Profit & Cost Center Performance Evaluation
Canvas textbook reading: Profit and Cost Center Performance Eval.

April 17-19 Quiz 4 to be completed via Canvas

Canvas textbook practice problems: Chapter 11: 22, 27, 37

10 April 20 Investment Center Performance Evaluation
Canvas textbook reading: Investment Center Performance Evaluation
Canvas textbook practice problems: Chapter 11: 22, 27, 37
11 April 22 Investment Center Performance Evaluation
Canvas textbook reading: Investment Center Performance Evaluation
Readings: Current events on transfer pricing and corporate taxation

12 April 27 Transfer Pricing

Canvas textbook practice problems: Chapter 11: 21, 29, 34
Canvas textbook reading: Investment Center Performance Evaluation

May 1 Comprehensive Final Exam 9am-12pm