Modeling Financial Statements: ACCT-GB.3304
Fall: Monday morning, Monday evening, Sunday afternoon
Winter: None [This is different from prior years.]
Spring: M-W morning, M-W afternoon, W evening
Various management disciplines teach you how to analyze and forecast
parts of a business. Building on this foundation, this course will
help you weave your forecasts into coherent spreadsheet-based pro-forma
financials. Modeling and projecting comprehensive financial statements
provides a reality check on the forecasts, enables "what if"
analysis, provides an integrated view of the business, and is a
key step in valuation.
The course will start from conceptual examples that illustrate the key intuition
and explain linkages between financial statements. It will then build on these
examples to forecast the financial statements of real companies.
This course is highly relevant to if you are pursuing any career
that requires you to understand or build models. Examples of such careers are investment banking, private equity,
buy-side or sell-side research, credit research, corporate finance, and valuation. First year and second year
students can both take this course. Those who took it in their first year have told me that this course gave them
a significant competitive edge during their interviews and summer internships.
- You need to be in the following systems before the start of the first class:
- NYU Classes
- Stern AIS
- If you are a non-Stern student, you must know how to access Stern email and Stern wi-fi
- Google groups for the class
- Even your access to dgode.stern.nyu.edu is not controlled by me. It is linked to
whatever Stern has entered in the class roster. I cannot override it.
- If you are not in the above systems (which is quite likely if you registered late), you will not be able to access the class materials during the first class and will miss out on important announcements.
- Please do NOT contact me regarding access to any of the above systems. If it takes time for the systems to be updated, complain to the school administration, not me. If someone in IT or Student Affairs tells you that I can add students, they are wrong. I am a professor, not an administrator. It is their job to fix these issues.
- Only registered students will be allowed to sit in this class. I will not grant permissions to anyone to sit in
the course without being registered in it.
- Classes are not videotaped unless there is a special session.
- If you are in the Langone section, please make sure that you can attend the last class because there will be a
final exam in the last class. The exam cannot be rescheduled.
- You need to be able to devote 6-8 hours every week to do the required assignments.
- You need to bring a laptop to every class with sufficient battery power to last three hours. If you have any technical questions, please contact the IT department (212-998-0180), NOT me.
- Excel 2010 or above is required. I will NOT be pointing out how to do replicate Excel Windows on Excel Mac. Students tell me that the most recent version of Excel on Mac works well.
- Make sure that you can connect your laptop to the Stern wireless network.
Help and Office
Materials and Course Design
- I use my own materials. There is no required textbook. Because of copyright and contractual restrictions, these
handouts are distributed only on paper. Electronic copies are not available.
- If you are going to miss the first class, ask a colleague to pick up the handouts for you. It is difficult for me to carry these back and forth.
- There are no extra copies. If you lose your copy, you will have to make copies from your friends' handouts.
- Review your core concepts carefully.
- The assignments appear as tests on Almaris. I may update the deadlines as the course progresses. The deadlines shown at Almaris are the correct deadlines.
- Some assignments are short, others are long. Please manage your time.
- NO EXTENSIONS will be granted for any reason except medical or family emergencies. If you have religious or personal conflicts, submit the assignments early. The related materials are covered well in advance of the assignments. Please do not email me to request extensions unless you have a medical or family emergency.
- You can learn concepts from others, but you must work on the actual
assignment alone. You may be called upon in class to explain your answer to the assignments.
- All assignments are mandatory. After the first day of class, you can view the on-line assignments at http://www.almaris.com/assess/ using your official Stern email (no aliases) and most recent password emailed to you by Almaris. The Almaris password is different from the Stern password. To retrieve the password, use your Stern email id as it appears in the registrar's records.
- Assignments are marked "late" if you do not meet or exceed the passing score described below before the deadline. There is no additional penalty for lateness other than the low score.
- Assignments have a "passing score" of either 100% or less than 100%.
- I set the passing score at 100% if I believe that you should be able to ace the assignment. In reality, there is no passing grade. Whatever you get on your last attempt is your final score. That is, you are graded on accuracy but not the number of attempts. If you are allowed five attempts, and you use them, then your score on the fifth attempt is your final score for the assignment. There is a difference between "passing" and getting full credit. If you get 70/100 on your fifth attempt, you "pass" but you don't score a 100.
- On a few assignments, I set the passing score to be less than 100% if I believe that you may not be able to get every question right. Any score above that score is rounded up to 100%. For example, if the passing score is set at 90%, and you get 93%, then your score is rounded up to 100%. I do the rounding up in a separate spreadsheet. You will see only the raw score on line.
- Almaris is not affiliated with Stern in any way. It is offering these tests to Stern at no charge to Stern.
- Almaris staff is not authorized to extend deadlines under any circumstances. Only my TAs can do that. Almaris staff will reply to your emails only if they pertain to technical issues with the Almaris system. You should contact Stern IT for technical issues with your network.
Exams and Grading
- If you have a qualified disability and will require academic accommodation during this course, please contact me directly. I will arrange a separate room/time for you.
- Grades will be based upon the following factors:
- 20%: Attendance, professional conduct in class, and class participation as measured by being able to answer questions in class when I call on you in class.
- You will lose points for every missed class unless you have a medical emergency, family emergency, or a confirmed interview, or required work travel for Langone students. No other reasons will be accepted as valid reasons unless you have pre-cleared them with me. If you unfortunately do have a medical or family emergency, do not worry about the course. Take care of that emergency and email me later.
- If you are more than 10 minutes late, you will be marked absent.
- Please form teams of four students each. I will distribute the roster once the class starts. You will be doing the cases in teams.
- Please bring your name tags to each class and sit in the same seat every day. All members of a team are required to sit together.
- 20%: Almaris assignments described above.
- It is not necessary for you to get a full score on the Almaris assignments; any score above 80% is considered a passing score and will be rounded up to 100%.
- 20%: Short case submissions.
- I will randomly pick a team to present their case analysis in front of the class for 10 mins. Your preparedness and your presentation will count towards your grade.
- 40%: Final exam
- The final exam will not be rescheduled for any reasons except medical or family emergencies. Work commitments will not be a valid reason for rescheduling.
- Your exam will constitute of one or more spreadsheets. Your score on each spreadsheet will be max(attempt1, attempt2 - 7, attempt3 - 14, attempt4 - 21, attempt5 - 28).
- In case you are unable to complete a spreadsheet or are unable to debug it, and want us to manually grade your spreadsheet, you must submit the spreadsheet online (NO EMAILS) at NYU Classes (look for File Exchange in the left hand menu bar) within FIVE MINUTES of the end of the exam. If you submit a spreadsheet for manual grading, your maximum score on that spreadsheet can only be 72/100. This is because someone else who takes five attempts to ace the spreadsheet will get only 72/100 because of the penalty for multiple attempts. Thus, if you submit the spreadsheet for manual grading, you would be considered to have used up your five attempts.
Important computer tips for the final
- DO NOT WORK ON A SPREADSHEET WITHIN A BROWSER. Save the spreadsheet to your desktop, work on it, and save it periodically. If you work on a spreadsheet in a browser and then navigate away from a page, ALL YOUR WORK WILL BE LOST.
- Restart your laptop before the exam. This will close all other applications besides the browser and Excel and greatly minimize chances of computer problems.
- Bring an external mouse with a scroll wheel. It does speed up test taking. I have been using computer-based exams for seven years. I am always amazed at how much time students waste trying to use the track pad or the internal mouse.
- Maximize screen space by hiding the ribbon at the top of the Excel and menus at the top of your browsers. The more of the screen you see, the faster and more accurate you are.
- Bring a laptop with as big a screen as possible.
- Organize your computer files and designate a directory where you will be saving your exam files.
- Donít get an unfamiliar laptop.
- There is no midterm. There will be no in-class graded quizzes.
- As per Stern rules, the FINAL EXAM for the EVENING CLASS is during the last class. For day classes, check your course page on NYU Classes.
- Please do not schedule any travel that conflicts with the exam. I will not move the exam for you unless you have a medical or family emergency.
- A detailed document listing the sequence of topics, related pages from the materials, related spreadsheets, and related assignments is provided in the course materials. The outline below is a brief summary.
- Deriving cash flows, enterprise or unlevered cash flows
- Building blocks of models; Linking cash flow forecasts to value
- Designing models, Customers; Suppliers, employees, and other expenses
- Multiperiod models: Long-term accruals and deferrals
- Excel tools for scenario analysis; Capacity: PP&E and depreciation
- Modeling financing, Time value of money and bonds
- Which cash flows should one discount, Integrated models, Prioritizing assumptions in models; sensitivity analysis
- Adjusting models for capitalized leases