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FINANCE 4400

FINANCIAL PROBLEMS—CORPORATE FINANCE

Case Preparation

1. Read the case carefully.  Read the case two, three, or even four times if you need to.  Most of the cases are short, but are loaded with relevant facts.

2. Analyze all statistical data.  

3. Determine the major problem or problems involved in the case.

4. With the problem or problems in mind, think about and search for alternative courses of action that are feasible.  Extra research may be necessary at this stage.  Consult your finance textbooks and other reference books.

5. Develop your plan for presenting the case in written form.

Write-up Format

Format for Individual Mini Write-ups

The individual mini write-up should be brief—generally two single-spaced pages.  (I prefer Times New Roman font and my increasingly bad eyes necessitate a font size of 12 points.)  In addition to the two pages, include exhibits and a bibliography as appropriate.

Your write-up should be presented in memo format. (If you don't remember how to write a memo, review your communications course; memos will be an important part of your future career and you should practice writing them now.)

In the body of your paper you should identify up to three of the most important issues raised by the case and address each issue thoroughly. Appearance is important—please make your submission look professional.

Format for Group Write-Ups and Individual Major Cases

A recommended (but not required) way of organizing your written report is to divide your report into six parts, as follows:

1. Executive Summary: The executive summary should be one page.  The summary should concentrate on the statement of the problem and your recommendations, not on the process used to reach your conclusions.  The executive summary should stand on its own and be designed to provide a concise briefing to a busy executive.

2. Summary of facts: Present a very brief summary of important facts.  Omit nonessential facts that do not affect your analysis of the problem.  Keep in mind that the intended audience probably also works for the company and is familiar with the basic facts of the case.

3. Statement of Problem: State the problem or problems that you intend to analyze and that you feel are the most important issues in the case.  Attempt to state the problem in one or two short sentences.  The ability to state a problem concisely and clearly is an extremely valuable skill.  Practice now!

4. Analysis:  Present your analysis or discussion in a rough outline form using complete sentences, or short paragraphs.  (This allows more information and ideas to be presented in a smaller amount of space.)  Use headings, spacing, indentations, and other techniques to organize and invite attention to the important points in your analysis.  Each of the exhibits attached to the case should be referenced within the discussion section.

This section of the report is where you use logic, judgment, and your problem-solving ability to support your recommendations. The strengths and weaknesses of the alternative courses of action should be developed in this section.  Support your ideas with carefully developed financial data. Remember this is a finance course – use the principles of finance you have learned in your other courses to help reach a decision.  Your analysis should be organized and written in such a way that a reader will be led directly to your recommendations at the end of the case.

5. Recommendations:  This section should also be very brief.  A solution must be given to the problem or problems you raised above.

6. Exhibits and Tables: These should appear at the end of your report in an easily readable form.  Make sure all exhibits are clearly explained and referenced in the text of the report and be sure the exhibits are clearly labeled, titled, and numbered.  (For example: a forecast of future cash flows that you have developed).  It should be very clear how you developed the data in any table or exhibit.  You should use footnotes to explain to the reader exactly how the numbers in the table were calculated.  Make sure every variable is clearly labeled. Each table or figure should have a caption with a brief explanation of the table’s or figure’s contents.

When you prepare your individual or group report, observe the following:

The report must not exceed a length of five double-spaced pages (the executive summary and charts, tables and exhibits do not count toward the five-page limit).  A rough guide for the five pages is as follows: Summary of Facts and the Statement of the Problem combined should not exceed one page; Analysis should be about 3 to 3 ½ pages in length, and the Recommendations should be about ½ page in length.  These are only rough guidelines – each case will be different.

Do not feel like the report has to be five full pages—conciseness and clarity are important.  On the other hand, if five pages do not seem to be enough space to fully analyze the problem, place more information in the tables.  Footnotes to the tables are a great place (i.e. usually the best place) to convey information regarding formulas, assumptions, etc.

All written cases should be typed and double-spaced on paper, 8 ½ x 11".

Other points

1. Your case report should contain information that you would present to management or your superiors in a business meeting or other business situation.  Consider your time and especially their time to be very valuable!  Pretend that you are writing for a very busy executive who may not have time to read the report in its entirety—avoid generalities and make your report easy to read.  There is a useful saying that goes:  “If I had only had more time, I could have made the report much shorter.”

For each write-up include a separate page that identifies the recipient, gives his or her job title, and gives a brief description of his or her knowledge of finance.

Your writing style is very important as well.  As a businessperson presenting your ideas to others, you want to make sure your ideas are clear and that others reading your report will understand the points you are trying to make.

2. Keep a copy of your report for the discussion of the case in class.

3. Remember that your group members will be asked to judge the quality and amount of contribution you made to the case project.

4. Grades will be based on the quality of your recommendations and analysis, the soundness of your logic and the overall exposition of the case (writing and style).