FI 709: Case Studies in
Instructor: John D. Sullivan,
Ph.D., Assistant Professor, Boston University, 808 Commonwealth
Ave, Boston, Massachusetts. Office Phone (617) 353 - 3018
Campus & Time: Quincy 6:00
PM to 9:00 PM - Wednesday
Office Hours: By appointment. You may call me either
at home or at the office. If I'm not home or in a meeting, please
leave a message on my answering machine or voice mail and I will
get back to you as soon as possible.
Schedule Issues: From time to
time, I am called away on business and this may interfere with class.
I will let you know as soon as possible if I will not be able
to conduct class. In the event that we cannot hold class for one
reason or another, we may need to reschedule or move an assigned
case to the next week.
Course Content and Objectives
This course will look at the principle
issues facing a financial professional in today's competitive environment.
Principle subjects will be: Financial Forecasting, Cost of
Capital, Rate of Return, How to Manage Growth, Discounted
Cash Flow, Valuation, Mergers & Acquisitions, and Bankruptcy.
Case Study Analysis
The case studies for this class were
chosen to represent different aspects of financial strategy. Case
study enables us to venture into many business situations,
analyze the important issues, and after detailed review, make recommendations.
A Note on Academic Standards
Both myself and Boston University
consider plagiarism a serious academic offense. Any form of plagiarism,
that is, taking the ideas or words of another and presenting
it as your own work, will be passed along to the Metropolitan College
Academic Conduct Review Board. Plagiarism includes duplicating work
from other classes such as handing in the same case study.
Textbooks and Other Required Reading:
Textbook (Optional): Financial Management, Brigham and Houston.
Harvard Cases & Notes www.hbsp.harvard.edu
Anheuser Busch 9-293-082
Braniff International 9-385-001
Continental Airlines 9-294-058
Goodyear Tire 9-290-016
Humana Inc. 9-294-062
RJR Nabisco 9-289-056
Walt Disney Productions 9-288-045
Vanguard Group 9-293-064
Jaguar plc. 9-291-034
"Is Your Stock Worth its Market Price?" 81309
"Choosing Compatible Acquisitions." 81109
Hospital Corp of America A 9-283-053
Scudder Funds 9-294-026
Cases Available through the Instructor
or the ECCH - www.ecch.cranfield.ac.uk
Genesis Health Ventures 200-024-1
Total Renal Care 201-007-1
Stone & Webster 201-008-1
WR Grace 201-041-1
Other Suggested Reading:
The Wall Street Journal
Investor's Business Daily
Hewlett Packard HP 12-C
First Case Write Up 25%
Second Case Write Up 25%
Group Case Write Up & Presentation 30%
Class Participation 20%
First Case Write Up 15%
Second Case Write Up 15%
Third Case Write Up 20%
Group Case Write Up & Presentation 30%
Class Participation 20%
Case Analysis and Preparation
For students taking FI 509, you will
need to prepare 2 case studies of your choosing (1 of these cases
must be from the ECCH case packet). Graduate students (FI
709) must prepare 3 cases (1 of these cases must be from the
ECCH case packet). Each case study will be due at the beginning
of the class in which that case study is being discussed.
For a successful case write up, you will need the following:
1. Case papers should address the key
issues which pertain to the financial strategy and then make clear
recommendations with as much support as possible.
2. Papers should be no more than three
double spaced pages (not including exhibits) and include a cover
page with your name, the date, the course number, and the
title of the assignment (case name).
3. Papers should be organized into
specific sections. For example, Background, Key Issues, Risk, Recommendations,
and Detailed Support for Any Recommendations.
4. Late Papers will not be accepted.
5. Your grade will depend upon how
well you identify the key issues in the case and make a solid recommendation.
6. All Footnotes and References must
use the APA format.
Group Paper & Presentation
The class will divide into groups
of two to four persons. 50% of your grade will be based on the paper
and the remaining 50% will be based on the presentation. Grades
will be assessed as a group and not as an individual effort.
Your written assignment is as follows:
1. Locate a publicly traded company
which is presently experiencing financial difficulty. This could
be a firm which is already in Chapter 11, experienced a major
layoff, reported an unexpected quarterly loss, extended or consolidated
or defaulted on debt, or has announced a restructuring plan.
2. Write a ten page double spaced paper
(not including exhibits) on why the company is in the position it
is and what recommendations you have to save the firm. I also
want a copy of your paper on disk. Your analysis should include
the "real" reasons why the company is distressed and not
symptoms. As financial consultants, it will be your job to
locate the true problem and provide financial solutions to bring
the company back into solvency. Major topics should include:
A brief background of the industry which the company operates, a
background on the company and the management team, how the
company got into trouble, and what financial recommendations you
have to pull them out.
3. You have an enormous amount of material to use for this
project. Annual Reports and 10Ks can be obtained by contacting
the company's Investor Services Department.
4. Prepare your presentation as though
it was before the Board of Directors of the company. The class will
be asking specific questions about your analysis, so be prepared.
5. Group participation by each member
is critical to the success of the group. Therefore, each group member
will evaluate each of the other members. I will provide each
member with an evaluation form.
Meaningful class participation is
an important element in case study analysis. Therefore, it is imperative
that students contribute to each class discussion. Please
be prepared each week. Your class participation grade will consist
of two elements: Attendance and Quality Participation.
1. January 15
Introduction & Review
2. January 22
Prepare Case: Anheuser Busch
Capital Budgeting & The Cost of Capital
Prepare Case: Goodyear Tire
3. January 29
Prepare Case: WR Grace 201-041-1
Prepare Case: Humana Inc
Assignment Due: A list of the members of your group
4. February 5
Discounted Cash Flow & Introduction to Mergers & Acquisitions
Prepare Case: MP3.com 201-030-1
Prepare Case: Pets.com 201-009-1
Assignment Due: Group one page summary of the company to be
5. February 19
Prepare Case: RJR
Read Case (You cannot write this case): Enron 102-014-1
Barbarians at the Gate
6. February 26
Read: Choosing Compatible Acquisitions
Prepare Case: Jaguar plc
Prepare Case: Stone & Webster
7. March 5
Bankruptcy & Turnaround Strategy
Prepare Case: Braniff Airlines
Prepare Case: Continental Airlines
Prepare Case: Laidlaw
8. March 19
Health Care Finance
Prepare Case: Hospital Corp of America A
Prepare Case: Genesis Health Ventures
9. March 26
Managing Your Stock Price
Read: Is Your Stock Worth its Price?
Prepare Case: Walt Disney Productions
Prepare Case: Total Renal Care
10. April 2
Note on "The Mutual Fund Industry"
Prepare Case: Vanguard
Prepare Case: Scudder Funds
11. April 9
Assignment Due: Group Papers
12. April 16
13. April 30