|In previous accounting/financial analysis courses, you obtained skills important to understanding how a firm tracks its day-to-day operations, and how its activities translate into periodic financial statements. Outside of 'normal' business activities, firms will periodically go through dramatic transformations via acquisitions, divestitures, restructurings, or bankruptcy. This course will give you the skills to understand what these transactions are, why they are undertaken, and how each type of transaction affects the financial statements. |
This course is essential for students seeking a career in financial services (e.g., financial analysis, investment banking, corporate restructuring, or corporate finance). You will benefit greatly from this course if you wish to:
(i) understand the accounting, economics, and tax implications of complex deals and restructurings;
(ii) apply the concepts learned in the course and build a comprehensive model in order to evaluate the feasibility of deals.
Building a financial model is an important exercise that will help you develop the following practical skills:
i) Apply the accounting and tax M&A concepts learned in the course and in other accounting courses taken at Chicago Booth.
ii) Learn how to build a financial model using Excel.
iii) Understand how a financial model is used to evaluate a deal, under a variety of structures and levels of stock or currency as consideration, and analyze the results. This step is something you will be doing to analyze corporate restructurings at an investment bank or at a restructuring firm.
Main topics to be covered include: (1) Accounting implications under influence and control situations; (2) The financial reporting rules for M&A deals; (3) The tax implications of M&A deals; (4) Corporate restructuring and financial reporting implications for leveraged buyouts, leveraged recapitalizations, spin-offs, and equity carve-outs; (5) Understanding financial reporting implications for a firm operating in bankruptcy and emerging from bankruptcy, i.e., fresh start reporting; (6) Merger Consequences and Restructuring models.
|Business 30116 or Bus 30118: STRICT. For students who have a strong accounting background, I might waive this prerequisite. In order to request a waiver, please send an email to me, explaining briefly (in no more than a couple of sentences) why you are requesting a waiver. You may be required to work on a short take-home assignment, and your waiver will be granted based on your performance on the assignment and your prior accounting background.
To get the most out of this course, you must have a solid foundation in accounting. If you struggled in either 30000 or 30116, you will find this course challenging. I expect students to attend all the lectures including the first class meeting which is mandatory even if you are not yet officially registered. If you plan on skipping at least one lecture, you should definitely not take this course; it is very hard to catch up once you fall behind. From past experience, most students who don't put in a lot of effort tend to earn a grade of C or D, or F. This course is also quite demanding in terms of time spent outside class. First, I hold weekly review sessions on either Saturdays or Sundays that last for at least 3 hours. These weekly review sessions are an integral part of the course and are highly recommended so if you cannot attend most of the review sessions, please do not take the course. Second, the merger model and restructuring projects require an average of at least fifteen (15) hours a week for the last four weeks of the quarter.
Description and/or course criteria last updated: 10/29/2013