Sample Syllabi & Assignments: Accounting

Course Name: Corporate Financial Reporting

Instructor(s): Doug DeJong

Discipline: Accounting

Level: MBA

Comments: This market used contracts based on the earnings of Younkers, an Iowa based department store chain. After having students submit these assignments, Professor DeJong invited a securities analyst who followed Younkers to discuss Younkers earning forecasts and actual earnings.


Iowa Earnings Market (IEM Case)

Introduction

There are three purposes that I have for the IEM case. First, students should learn about, be able to access and use financial information services and data bases, both online and other. Second, students should gain an understanding of the role of accounting earnings and forecasts in valuation (e.g., stock prices). Third, students should gain a working knowledge of how financial markets operate.

The IEM case accomplished these objectives by having students trade "futures" contracts or securities whose payoffs are related to the actual quarterly earnings per share of a company. In particular, students are required to analyze past earnings of Yonkers, develop their own forecasts of Yonkers' third quarter earnings per share, develop trading strategies in the IEM market for buying and selling Yonkers' earnings contracts, and finally to execute transactions in the market that implement the developed trading strategies.

This case is to be done on an individual basis. It is NOT a team project.

Enclosures

You already have annual reports or sets of financial statements for Yonkers (and Carson Pirie Scott). To assist you in completing the case, I have enclosed the following items:

Key Dates

Finally

I expect the case that is turned-in for grading to be well constructed and well documented. In particular, I expect you do defend your earnings forecasts, present a well articulated trading strategy based on the forecast and iem market conditions and finally to documentation the implementation of your trading strategy.

Before John Curti's visit, I expect the teams to meet and discuss what they would like to ask Mr. Curti about the role of financial analysts and past and future prospects for Yonkers.

Good Luck and Happy Trading.