ALS350 - Financial Accounting and ALS472 - Valuation in the Life Sciences

ALS350 - Financial Accounting and ALS472 - Valuation in the Life Sciences


These courses are taught by Luann Bangsund. Luann joined KGI in 2010 as a Professor of Practice and Director of the MBS program. She received her BA at the University of Redlands. She got a Masters in Education at Redlands and an MBA in finance and Marketing from UCLA. She spend 20 years in the financial sector working for Security Pacific National Bank (since merged into Bank of America), Wells Fargo, Citibank and Kleinwort Benson, Ltd. (now part of Dresdner Bank) in the Los Angeles, New York and London offices of the banks.  At Wells Fargo she was Senior Vice Presidents and Division Manager for the Structured Finance Group. In 2001 she enrolled in the doctoral program at Claremont Graduate University's Drucker Graduate School of Management. After completion in 2006, she accepted the position of Assistant Professor of Finance at the Eberhardt School of Business at the University of the Pacific in Stockton, CA.

Luann teaches a number of courses at KGI this Fall semester; ALS350 Finance and Accounting Principles and ALS472 Valuation in the Life Sciences.

ALS350 is a half course survey of Financial Accounting. Accounting is frequently referred to as the "language of business," and thus, is an essential tool for all managers who strive to be effective communicators.  ALS 350 involves the study of accounting from the perspective of the data user (an investor, manager, or lender), not the data provider (controller, CPA, etc.). Instead, the goal of the course is to gain an appreciation and understanding of the topics covered.  The educational goal of ALS 350 is for each student to become a competent user of accounting information. Students will learn how to interpret, understand, and use the basic financial statements.

Topics Covered

Basic accounting concepts
Balance sheet account categories
                        Current assets
                        Non-current and Intangible assets
                        Property, plant and equipment
                        Current liabilities
                        Long term liabilities
                        Off-balance sheet debt
                        Shareholder's equity
Income statement accounts including revenue and cost recognition
Cash Flow and Funds Flow statements (cash versus income)
Financial statement analysis
Financial ratios

Learning Objectives

After completing this course, students should be able to:
1.)     develop income statements, balance sheets and cash flow statements from raw data
2.)     use basic accounting concepts to evaluate a firm's financial strength
3.)     assess the impact of various business events on a firm's financial statements
4.)     correctly calculate and interpret financial ratios

Grading

Participation           15%
In-class exercises    15%
Final exam               45%
Final Statement Project    25%

 Sources: http://www.kgi.edu/current-students/academic-affairs/course-catalog/courses/als-350.html

Textbooks

       Financial Accounting for Executives & MBAs, Kenneth R. Ferris and James S. Wallace, ISBN 978-934319-62-8

      Fundamentals of Corporate Finance, Brealey, Myers & Marcus, ISBN 978-0-07-803464-0

"The second textbook will also be used for ALS 351 so they shouldn’t freak out about the cost." (quote Luann)

ALS472 - material covered will include the basics of valuation, including defining cash flow, estimating cost of capital and calculating terminal values.  It will also address the challenges of estimating value for technology firms in the early stages of development.  Firms in the life science industry hold particular challenges in valuation due to the long time to market and the significant capital needed to complete the lengthy approval process required by the US regulatory system.  Due to the nature of the discovery, development and commercialization process, it is likely that a project or firm valuation will be required at several stages of the process as ownership shifts from R&D firms, to development firms and on to firms that will market the products.  The involvement of venture capital in the capital raising process sharpens the need for understanding the appropriate methods of valuation in preparation for negotiation of ownership interests.
Most valuation courses focus on the valuation of a firm; however, in this course students will learn to address the issues of valuation, which are created by the limited exclusivity periods (patent protection) typical for intellectual property.  Students will learn to not only use the basic DCF methods used for firm valuation, but also the rNPV ("Risk Adjusted Net Present Value") method specific to the industry.  The course will address valuation of projects, intellectual property and licenses.

  Sources: http://www.kgi.edu/current-students/academic-affairs/course-catalog/courses/als-472.html

Please note, ALS350 is a first semester first year course and therefore doesn't require any prerequisites. However, ALS472 requires knowledge of finance, so unless you have some prior finance courses you will not be able to take this course (unless you're a part-time PPM and will take it in your 2nd year).