Modeling Financial Statements: Winter 2009 3-Credit Intensive Course

This page is for the Winter 2009 3-Credit Intensive Course.

Click here for the Fall 2008 3-Credit Course

Click here for the Spring 2009 1.5 Credit Course

Before contacting me, make sure that you read this email from Dean Corfman regarding this issue.

Important Stern Policy Document

Please read this very important document regarding Stern policies by clicking here.

Disclaimers

• Grading this course is a challenge, and there are no textbooks I can use. I am writing my own materials, but it will take me two more years before I have anything resembling a book.
• The course could easily take up to 8 hours of work per session. Take a look at last year's ratings to see that at least 33% of the class did not find the workload manageable. Don't take this course if you don't have the time to do the assignments.
• You will benefit from this course ONLY IF you are pursuing a career in investment banking, private equity, buy-side or sell-side research, credit research, corporate finance, and valuation.
• The course requires you to self study challenging material before class. Take this class only if self-study fits your learning style.

Prerequisites

• You cannot build meaningful models if you don't know accounting. I will assume that you have taken or will concurrently take Financial Statement Analysis, Financial Reporting and Disclosure, Accounting for Mergers and Acquisitions, and Corporate Finance. I will not repeat or review these concepts.
• You will struggle with this course and will not benefit from it if you did not get an A, A-, or B+ in your core accounting course, core finance course, and other accounting courses, or are otherwise uncomfortable with accounting, finance, or Excel concepts.
• You need to bring a laptop to 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. I will not look into technical issues with your laptop, Stern network, or your installed software. The class may not have enough power outlets to charge your laptop.
• I have tried using Excel 2007 but did not find the change worthwhile. All class examples will use Excel 2003, and you are expected to be familiar with it.
• Make sure that you can connect your laptop to the Stern wireless network.

Overview

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.

Help and Office

• Administrative assistant: Ben Sugimori, bsugimor@stern.nyu.edu, 212-998-0068, Office: KMEC 10-180 (front desk)
• Teaching assistants: Anne Cosgrove ac500@stern.nyu.edu and anukaran.agrawal@stern.nyu.edu
• Class mailing lists: B10-3304-10-F2008@stern.nyu.edu B10-3304-11-F2008@stern.nyu.edu [Only Anne, Anukaran, Ben, and I are authorized to send.]
• Me: dgode@stern.nyu.edu, 212-998-0021, Office: KMEC 10-86.

Materials

• I will not require a textbook because I have never found one that covers modeling financial statements in sufficient detail. I am writing my own materials.
• The course will not be on Blackboard. The materials will be online as I teach classes. Right now, you only need to do Almaris Assignments described below. To access materials during the course, click here: http://www.dangode.com/modeling/files/

Assignments

• See the grading section below. Some assignments are short, others are long. Please manage your time. Click on each assignment to see how to prepare for that assignment.
• 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 had 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. To view the on-line assignments, login at http://www.almaris.com/assess/ using the email and most recent password emailed to you by Almaris. To retrieve the password, use your Stern email id as it appears in the registrar's records. If you were added to the class list after December 22, please email me.
• 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. Please do not email me to reconfirm this.
• 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. Please do not email me to reconfirm this.
  • 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. Please do not email me to reconfirm this.
• 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.
• To help you review the basic accounting concepts, I am making my core course CD-ROM available to you at no charge. Please contact my assistant Ben Sugimori (bsugimor@stern.nyu.edu x212-998-0068). The CD will help you with the first four assignments (Progress 1-4). Most of you (at least I hope so) should find the assignments fairly straightforward. These prework assignments require a lot of data entry. Subsequent course assignments require much less data entry. I apologize for any tediousness.
• All of these assignments are from the first 8 weeks of my core course. If you find these prework assignments difficult, I strongly recommend that you consider taking the course next year after you have taken more accounting courses. Even if you took the core with me, I require you to take these tests as the concepts get rusty over time.
• Final project

Rules

To maximize my time spent on teaching, I want to emphasize the following:

• Please do NOT email me if you plan to miss a class, be late, or leave early.
• All technical issues are between you and Stern IT.
• All assignments are on-line. If you are late, you will get a zero. Make sure that you submit the assignments well in advance so that you are not delayed by technical problems. 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.
• You can discuss the concepts underlying the assignment questions or similar questions with your teammates, but you must work on the actual assignment alone. Copying any part of the answer from someone else is a violation of the Stern ethics code.
• If you have a qualified disability and will require academic accommodation during this course, please contact the Moses Center for Students with Disabilities (CSD, 998-4980) and provide me with a letter from them verifying your registration and outlining the accommodations they recommend. If you will need to take an exam at the CSD, you must submit a completed Exam Accommodations Form to them at least one week prior to the scheduled exam time to be guaranteed accommodation.

Exams and Grading

The grades will be based on the final exam and one project. The assignments can affect your grade adversely if you do not complete them on time. It is not necessary for you to get a full score, but you must show due diligence in completing the assignments. 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. The final project will count towards 50% of the course grade.

Schedule

Winter 2009 schedule: The schedule has been moved to a password protected area as it now has links to class videos. Use your STERN, NOT ALMARIS, userid and password to access the schedule and class videos.

Click here for the schedule with links to videos.