Modeling Financial Statements
This course requires excellent accounting skills. If your accounting skills are rusty, you will be expected to finish EXTENSIVE optional accounting assignments. Do not take this course if you dislike accounting.
Please contact NYU IT (email@example.com, 212-998-3333) or NYU Stern IT (firstname.lastname@example.org, 212-998-0180) for all ZOOM/email/NYU Brightspace/Admin/CapitalIQ issues. Please do not copy/contact me. Brightspace and NYU groups send all emails to the @nyu.edu (not @stern.nyu.edu) address, while Stern class mail lists send emails to @stern.nyu.edu. You must check BOTH emails and use the correct browser profile. Please contact IT to figure this out. Do not write to Almaris or me if you do not get Almaris emails because this issue is between NYU and you.
Please make sure you read the Announcement in NYU Brightspace for this course and read the details about highly recommended prework.
MBA ACCT-GB-3304 Specializations:
- Financial Systems and Analytics
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 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 and credit risk analysis.
The course is indispensable to careers in investment banking, private equity,
buy-side or sell-side research, credit research, corporate finance, valuation, project finance, and due diligence advisory. It gives a competitive edge during interviews, internships, and jobs. First-year and second-year
students can both take this course.
Help and Office
- Me: email@example.com,
212-998-0021, Office: KMC 10-86.
- Teaching assistant: Please check NYU Brightspace
- You need to be able to devote 6-8 hours every week to do the required assignments.
- You need to bring a computer to every class. If you have any technical questions, please contact the IT department (212-998-0180), NOT me.
- I will be using Excel 365. Any version from Excel 2010 onwards should work for you, but the older versions may be missing some of the required features. You can get Office 365 for free from Microsoft because you are a student. Given the limited class time, I will not show how to replicate Excel Windows on Excel Mac.
- You need to be in the following systems before the start of the first class:
- NYU Brightspace
- If you are a non-Stern student, Stern automatically creates a Stern account for you when registering for a Stern course. All class emails are sent to your Stern email, not NYU email. Please forward your Stern email to your NYU email.
- I do not control your access to dgode.stern.nyu.edu. It is linked to
whatever Stern has entered in the class roster. I cannot override it.
- If you are blocked from accessing these systems, please ask the administration to expedite matters. Given the complexity of these systems, I cannot manually add you to any system.
- Only registered students can attend. I cannot override this NYU rule.
Materials and Course Design
- I use my materials. Therefore, there is no required textbook, and you need not purchase anything.
- 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, please 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 collaborate with others while doing
- All assignments are mandatory. After the first day of class, you can view the online assignments at http://www.almaris.com/assess/ using your official Stern email (no aliases) and the most recent password emailed to you by Almaris. The Almaris password is different from the Stern password. To retrieve the password, use your full email with the domain name as it appears in Brightspace. The domain name could be @nyu.edu for some of you, while for others, it could be @stern.nyu.edu. I do not control this mess.
- 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 you should ace the assignment. In reality, there is no passing grade. Whatever you get on your last attempt is your final score. You are graded on accuracy but not the number of attempts. There is a difference between “passing” and getting full credit. If you get 70/100 on your final attempt, you “pass,” but you do not score 100.
- I set the passing score of less than 100% on a few assignments if you might not get every question right. Any score above that score is rounded up to 100%. For example, if the passing score is 90%, and you get 93%, your score is rounded up to 100%. I do the rounding up in a separate spreadsheet. You will see only the raw score online.
- Almaris is not affiliated with Stern in any way. It is offering these tests to Stern at no charge.
- 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. Please contact Stern IT for technical issues with your network.
Attendance and penalty for missing classes
Requiring attendance is necessary for several reasons. First, you incorrectly assume you can catch up on a missed class by watching a recording (if available). Videos do not engage your brain as much as a live class. Second, less than 20% of you watch the recording (if available). You are then lost in class, which provides wrong signals to me as an instructor. Third, your absence hurts class discussions. Fourth, you miss out on feedback if you do not work through the questions I pose in class. Fifth, I lose the feedback since there are fewer questions.
The policy below will be in effect only after the add/drop period.
Without mandatory attendance, attendance is often below 50%. Therefore, though I dislike doing this, I penalize absences. If you anticipate being absent for good reasons, please email me well in advance. Please enter "Excused" on the attendance sheet described below to avoid the penalty if I approve. If you miss a class due to emergencies and cannot tell me in advance, do not panic. Take care of the emergency first, and then email me. I will permit you to change the "Absent" to "Excused." But, if you miss a class without a valid reason, there is a penalty, as stated below.
For sections meeting in 150-190 minute sessions, you will lose one grade (A to A-, A- to B+, B+ to B, B to B-, and so on) for EVERY missed session unless you were explicitly excused via email. Thus, if you miss two class sessions, you will lose two grades, and so on.
For sections meeting in 75-80 minute sessions, you will lose one grade (A to A-, A- to B+, B+ to B, B to B-, and so on) for EVERY TWO missed sessions unless you were explicitly excused via email. Thus, if you miss four class sessions, you will lose two grades, and so on.
Please sit in the same seat in every class and display your name tags. For zoom classes, you must keep your video on AT ALL TIMES. You must also have a good working headset or mic, as it is extremely rude to be inaudible and force me to ask you to repeat yourself.
After entering the class, please mark yourself present in the first 20 minutes on the OneDrive sheet (link posted on Brightspace). You will be marked absent if you are more than 20 minutes late unless it is because of factors beyond your control (traffic, subway, interviews running late). You will also be marked absent if you leave the class early unless you have my permission or get it afterward. You will get an F in the course if you are caught cheating on the attendance sheet.
Exams and Grading
- If you have a qualified disability and require academic accommodation during this course, please contact me directly. I will arrange a separate room/time for you.
- Please read about the penalty for missing classes above.
- 50%: Almaris assignments described above.
- 50%: Final exam. Instructions you will see before the exam.
- Please login to Almaris as soon as you receive these instructions in an email from me. You will see inactive links to your exams and instructions.
- The instructions at the top of the login screen will tell you how many parts the exam has and their weights.
- Please report any problems such as wrong deadlines or missing parts of the exam to me immediately.
- Login to Almaris right before your exam. Refresh your screen to see active links for the exam.
- Your final score on each part of the exam will be max(score1, score2 - 7, score3 - 14, score4 - 21, score5 - 28).
- You must answer all questions without help from another student or anyone else.Any such communication will be construed as cheating. If you have any doubts, email the TA AND me. Whichever one of us reads the message first will respond. If the exam is held in class, you can ask the proctor.
- Please keep your email open during the exam and check it periodically. Any updates/corrections will be sent via email.
- Manage your time. Extra time will NOT be allowed.
- The exam is an open book and open notes exam.
- The exam covers the entire course.
- If you want us to grade your incomplete or incorrect spreadsheet manually, submit it within FIVE MINUTES of the end of the exam. Do not email it; look for File Exchange in the left-hand menu bar on NYU Brightspace. If you submit the spreadsheet for manual grading, you would be considered to have used up your five attempts. Therefore, your maximum score on that spreadsheet can only be 72/100 due to the penalty for multiple attempts.
Important computer tips for the final
- DO NOT WORK ON A SPREADSHEET WITHIN A BROWSER. Save the spreadsheet to your computer, work on it, and save it periodically. If you navigate away from the spreadsheet in a browser, ALL YOUR WORK WILL BE LOST.
- Organize your computer files and designate a directory to save your exam files.
- Restart your computer before the exam to minimize problems.
- Bring an external mouse with a scroll wheel to speed up test-taking. Do not waste time using the trackpad or the internal mouse.
- Maximize screen space by hiding the Excel ribbon and browser menus. The more the screen you see, the faster and more accurate you are.
- Bring a computer with as big a screen as possible.
- Do not use an unfamiliar computer.
- There is no midterm. There will be no in-class graded quizzes.
- A detailed document is provided in the course materials. It lists the sequence of topics, related pages from the materials, related spreadsheets, and related assignments. The outline below is a 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
Time value of money and bonds
Which cash flows should one discount
Prioritizing assumptions in models; sensitivity analysis