FIN 360

Principles of Financial Management

Oct. 8, 2025

G.R.A.D.E.S.

To Do

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• Read articles for next time (annuities and preferred stock).
• Enjoy break!

Review & Preview

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• PV and FV of payments, whether fixed or varying, over time.

Today:

• Annuities and perpetuities
• Payments that grow at fixed rates

FIN 360

Principles of Financial Management

Oct. 6, 2025

Finance Careers Summit

Advice from the FCS

• “Finance is a bunch of moderately smart people using fancy words for simple stuff.”
• What you learn in class is the bare minimum/expectation. “Table stakes.”
• AI can’t replace the human element.
• AI won’t replace all jobs, but replaces those who don’t know AI.
• EQ vs. IQ…again.
• Alumni network small but strong.
• Be the one who seeks advice.
• You will struggle when you get started. Don’t be stubborn. Accept responsibility and fix mistakes.

Advice from the FCS

• Use Career Services.
• Soft skills.
• Chill out and prioritize yourself. Don’t look at others.
• Soft skills…
• Don’t network because you “need something.”
• “Tell me about yourself.”
• Know background of who you are speaking with.
• Ask interesting and relevant questions - and good follow ups.
• Take interesting classes outside of business.
• Bad GPA can be overcome. A good one can’t?
• …SOFT SKILLS.

To Do

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• Read posted articles (annuities and preferred stock).

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Discuss after Fall Break on Wednesday Oct. 15.

Review & Preview

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• TVM: The foundation of finance. Money in hand today is more valuable than the same amount of money in the future. Why?

Today:

• Multiple cash flows, both present and future values.
• Discounted cash flow (DCF).

FIN 360

Principles of Financial Management

Oct. 1, 2025

Upcoming @ UR/Robins

• Access Holdings Private Equity
• Private Equity 101 with Access
• Oct. 1, 6-7pm, RSB 225
• Coffee Chats with Braden McClure and Jullian Alexander
• Thursday, Oct. 2, 9am-12pm, Queally Center, 201
• Two-day externship opportunity in January

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• Santander Sophomore Summer Analyst Program (Handshake)

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• Finance Careers Summit
• Saturday, Oct. 4 @ 9am

Exam Results

• Avg. = 82.2%
• Med. = 85.1%
• ⅔ A’s and B’s

Exam Results

• Avg. = 4.3/5
• 94.9% SA or A

Exam Results

• What if I did poorly?
• What if I did well?

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What I will do:

• Even more office hour appointments (added to Calendly).
• Bonus now +10 (instead of +7) for turning in project early.
• Even more in-class practice.
• Bloomberg hours: 9:30am-10:30am Thursdays for the month of October in Lab.

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But what will you do?

Exam Results

This is for viewing not discussing. Not everyone has taken this exam!

• Put everything away.
• No phones.
• No chatting.
• Treat it like an exam day.
• Turn-in and leave when you are done.

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I can go over one-on-one, in full, and answer questions if you schedule an appointment.

FIN 360

Principles of Financial Management

Sep. 24, 2025 (Review Session)

Exam 1: Checklist and Study Guide

Approximate Breakdown

☆ Don’t forget:

• Articles and readings (7 total)
• Spider Management Co.
• Course Journal slides and in-class discussions.

Max 3 total questions regarding Articles/Spider.

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Sample MC Question

(Answer = A)

Sample Articles/Readings Question

(Note: we didn’t cover this article this year. Answer = E)

Sample Fill-in-the-Blank

(Answer = Pro Forma)

Sample True/False

(Answer = True)

Sample Problems

Similar to your problem sets/in-class problems. Some possibilities include:

• CFFA
• Cash Conversion
• Ratios (and their interpretation!)
• EFN
• Dupont
• Growth Rates
• Profit Margins
• Statement of Cash Flow

Sample Short Answer

Tips

• Problems are about 15-20% of total points.
• Don’t overstudy stuff you know!
• CTQs and AQs are very important.
• Fill in blank lecture notes.
• Practice active recall.
• Teach to an empty classroom.
• “Sleep on it twice.”
• Time yourself
• Use Excel files to observe relationships.

Other Stuff

• Sources of Cash: ↓Assets or ↑Liabilities/Equity
• Uses of Cash: ↑Assets or ↓Liabilities/Equity
• EFN = 0 if growth @ IGR
• EFN > 0 if growth @ SGR, and D/E same if LTD increases by EFN
• Dupont, and what it tells us.
• “Add back” depreciation.

FIN 360

Principles of Financial Management

Sep. 24, 2025

Tesla Shareholder Election (3.33B Shares Out.)

Tesla Shareholder Election (3.33B Shares Out.)

Readings

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IGR = 1.87682%

SGR = 6.70059%

EFN = $19,272.58

D/E = 240.878% (where D = all Liabilities)

ROE = 13.801954%

Cash Coverage = 6.70465x

Perhaps can grow with increase in capacity?

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Sales Growth from 2023 to 2024: 0.7%

LTD from 2023 to 2024: -7.2%

C/S APIC from 2023 to 2024 : -4.7%

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Exam 1: Checklist and Study Guide

To Do

• Study. CTQ/AQ. Office Hours.
• New weekend appointments available
• Open hours - drop in as needed (my office)
• Saturday: 1-2pm
• Sunday: 1-2pm
• Email me if no hours work for your schedule!
• Problem Set 2
• Due 9/26 @ 4pm

Preview

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Today:

• The time value of money, the foundation of finance.

FIN 360

Principles of Financial Management

Sep. 22, 2025

Visiting NYC

Lessons from NYC

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• EQ vs. IQ in the age of AI
• Curiosity and coachability over “talent”
• Most don’t stay in their first job
• Read
• Networking = necessary

Exam 1

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• Monday, Sept. 29
• Review Session: Wednesday 24th, 6pm, Room 113
• Feel free to come-and-go.

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To Do

• Study. CTQ/AQ. Office Hours.
• New weekend appointments available
• Open hours - drop in as needed (my office)
• Saturday: 1-2pm
• Sunday: 1-2pm
• Email me if no hours work for your schedule!
• New articles on quarterly filings and raising debt
• Problem Set 2
• Due 9/26 @ 4pm

Review & Preview

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• External Financing Needed (EFN): determining how much financing needed for growth.
• Internal growth rates.
• Sustainable growth rates.

Today:

• Calculator tutorial
• EFN case study

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Sales Growth from 2023 to 2024: 0.7%

LTD from 2023 to 2024: -7.2%

C/S APIC from 2023 to 2024: -4.7%

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FIN 360

Principles of Financial Management

Sep. 17, 2025

Exam 1 Info: Monday, Sept. 29

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Q&A

Exam 1 Info: Monday, Sept. 29

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Breakdown:

• About 70-80% conceptual/qualitative
• About 20-30% problem solving
• About 40-50 questions, expect to take the full period.

Types of Questions:

• Multiple choice - choose from 5 options
• Fill in the blank - definitional, no “options” to choose from, recall
• True/False - choose one or the other, no need to explain answer
• Problem Solving - computations, with partial credit
• Short answer - may have computational component, with partial credit

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I provide a formula sheet. POSTED. Practice with it!

Exam 1 Info: Monday, Sept. 29

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What is unlikely:

• Calculate this firm’s total asset turnover.
• Calculate this firm’s ROE.
• Calculate this firm’s equity multiplier and cash coverage ratio.

What is more likely:

• Comment on how effective this firm is at generating sales given its assets by computing a ratio of your choice.
• What is the firm’s return on equity? Show the components of the ROE using Dupont analysis and comment on each component.
• Use a ratio to show the degree to which this firm uses leverage, and use a ratio to show the ability of the firm to pay its debt.

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Exam 1 Info: Monday, Sept. 29

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Tips:

• Work additional problems in Excel. (i.e., do one where CFFA is negative – and know what that means).
• Focus on relationships.
• Write answers down from memory on CTQs and AQs.
• Time yourself on problem sets
• Start now!
• Work independently, then in groups.
• Talk to me – need more office hours? Tell me!

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Historical Distribution (differs significantly from year-to-year):

35% As, 30% Bs, 12.5%Cs, 15.0% Ds, 7.5% Fs

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Exam 1: Checklist and Study Guide

Readings

Readings: Repurchases, an example

Readings: Bankruptcy

Bankruptcy ≠ Going out of Business

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• Chapter 7: Liquidation - sell assets to pay creditors. What do shareholders get?
• Chapter 11: Reorganization - business can continue, courts and debtors develop plans to pay debts to be paid overtime. Dividends stop.

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Raising debt in the future (after reorganization) is challenging!

Since IPO, +3000%. S&P up 500% over the same time.

To Do

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• Study. CTQ/AQ. Office Hours.
• More hours added for Wednesday (in NYC Thurs/Friday)
• Email me if no hours work for your schedule!

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• Problem Set 2
• Due 9/26 @ 4pm
• Emailing today

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Review & Preview

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• Percentage of Sales and Pro Forma: forecasting the income statement and balance sheet.
• External Financing Needed (EFN): determining how much financing needed for growth.

Today:

• Arriving at growth rates:
• Internal (rate a firm can grow such that EFN = 0)
• Sustainable (rate a firm can grow such that D/E doesn’t change

FIN 360

Principles of Financial Management

Sep. 15, 2025

Upcoming @ UR/Robins

Survey Results

Survey Results

Survey Results

Percentage of students who “Strongly Agree” or “Agree” to each of the following:

• Class is engaging (90%)
• Teaching style is effective (97%)
• Lecture notes effective (87%)
• Strongly signals willingness to help (97%)
• Assigned readings interesting/relevant (84%)
• In-class ratio exercise interesting/relevant (90%)

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Review session: Wednesday Sep. 24 @ 6pm (with 67.7% of vote). Office hours added over the weekend prior.

Survey Results

Like and Enjoy:

• Material
• Practicality
• Energy/enthusiasm
• Clarity
• Lecture notes
• Organization

Suggestions:

• More in-class problems

To Do

• New readings posted.
• Cash flow, repurchases, bankruptcy

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• Get/bring your calculator.

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• Study. CTQ/AQ. Office Hours.
• More hours added for Wednesday (in NYC Thurs/Friday)
• Email me if no hours work for your schedule!

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Review & Preview

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• Financial Ratios: Short term solvency/liquidity, leverage and long-term solvency, turnover, market value, profitability.
• Dupont to find what drives ROE.
• Cash conversion: from cash spent to cash received.

Today:

• Growth - how do firms plan for growth, and how do they finance it?

Exam 1 Info: Monday, Sept. 29

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Breakdown:

• About 70-80% conceptual/qualitative
• About 20-30% problem solving
• About 40-50 questions, expect to take the full period

Types of Questions:

• Multiple choice - choose from 5 options
• Fill in the blank - definitional, no “options” to choose from, recall
• True/False - choose one or the other, no need to explain answer
• Problem Solving - computations, with partial credit
• Short answer - may have computational component, with partial credit

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I provide a formula sheet. Posting soon. Practice with it!

Exam 1 Info: Monday, Sept. 29

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​

What is unlikely:

• Calculate this firm’s total asset turnover.
• Calculate this firm’s ROE.
• Calculate this firm’s equity multiplier and cash coverage ratio.

What is more likely:

• Comment on how effective this firm is at generating sales given its assets by computing a ratio of your choice.
• What is the firm’s return on equity? Show the components of the ROE using Dupont analysis and comment on each component.
• Use a ratio to show the degree to which this firm uses leverage, and use a ratio to show the ability of the firm to pay its debt.

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Exam 1 Info: Monday, Sept. 29

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Tips:

• Work additional problems in Excel. (i.e., do one where CFFA is negative – and know what that means).
• Focus on relationships.
• Write answers down from memory on CTQs and AQs.
• Time yourself on problem sets.
• Start now!
• Work independently, then in groups.
• Talk to me – need more office hours? Tell me!

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Historical Distribution (differs significantly from year-to-year:

35% As, 30% Bs, 12.5%Cs, 15.0% Ds, 7.5% Fs

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FIN 360

Principles of Financial Management

Sep. 10, 2025

Readings

Topics: Agency problems, shareholders, takeovers, market value, value maximization, corporate boards, organizational structure, proxy voting

To Do

• Problem Set 1 due 4pm Friday, Sep 12

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• Study. CTQ/AQ. Office Hours.

Review & Preview

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• Common size and ratio analysis: using to assess quality of the firm and to compare to peers. From short term liquidity to long term solvency and more.

Today:

• Continuing ratio analysis
• Cash conversion cycle

FIN 360

Principles of Financial Management

Sep. 8, 2025

To Do

• Problem Set 1 due 4pm Friday, Sep 12
• Print ►Complete ►Scan ►Upload as PDF
• Or complete on tablet/iPad, upload as PDF
• Name file “V” followed by your version number, i.e., V100 or V2
• Working together encouraged!

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• Readings, posted to website. Be ready to answer questions about the listed themes on Wednesday, Sep. 10.

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• Study. CTQ/AQ. Office Hours.

Review & Preview

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• It’s crucial to understand operating, investing, and financing cash flows!

Today:

• Building the statement of cash flow.
• Common size statements and ratio analysis.

FIN 360

Principles of Financial Management

Sep. 3, 2025

To Do

• Upload your PIB by 4pm Friday, Sept. 5
• Problem Set 1 will be emailed to you this week.
• Expected due date: 4pm Friday, Sep. 12.
• Remember late submissions not accepted!

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Review & Preview

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• Income statement: revenues and expenses
• Balance sheet: what a firm owns and owes

Today:

• Continuing discussions on cash flow
• CFFA computations
• Sources and uses of cash

Spider Management�Presentation to FIN360

September 3, 2025

Agenda

81

3

9

11

14

Overview of Spider Management

Our Opportunity

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Open Positions

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Q&A

CONFIDENTIAL – For University of Richmond Use Only. Not For Redistribution

Overview of �Spider Management

History: UR Endowment

• Transformative $50M gift by E. Claiborne Robins in 1969
• Largest gift to higher education at the time
• Catalyzed additional $60M in gifts
• UR’s endowment was one of highest in the country
• Endowment has grown by ~$1.1B over past 10 years
• $3.4B value as of March 31, 2025
• Investment returns
• Giving

83

All market outlooks, themes, strategies, allocations and holdings discussed herein are subject to change. Past performance is not indicative of future results. Current value of University of Richmond's endowment is inclusive of gifts, spending, and other historical cash flows and it should not be implied that the growth in the endowment is a result of the investment performance solely.

CONFIDENTIAL – For University of Richmond Use Only. Not For Redistribution

History: Spider Management Company

• $6.2B Total AUM
• $3.4B University of Richmond
• $2.9B Other Non-Profit Partners

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• Disciplined in AUM and number of partners to maintain high touch client service and investment focus
• All 501(c) organizations, including:
• colleges and universities
• independent K-12 schools
• community foundations
• cultural institutions

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84

As of 3/31/25. All market outlooks, themes, strategies, allocations and holdings discussed herein are subject to change. Logos are illustrative of the various non-profit institutions invested with Spider Management. Does not include all limited partners. The inclusion or exclusion of an entity’s name in the image above does not indicate the entity’s approval or disapproval of our services.

CONFIDENTIAL – For University of Richmond Use Only. Not For Redistribution

Organizational Chart

85

CONFIDENTIAL – For University of Richmond Use Only. Not For Redistribution

Endowment’s Role

86

Source: https://universityfinance.richmond.edu/planning-budget/about-budget.html. All market outlooks, themes, strategies, allocations and holdings discussed herein are subject to change.

CONFIDENTIAL – For University of Richmond Use Only. Not For Redistribution

Portfolio Construction

87

As of 3/31/25. Totals may not sum to 100% due to rounding. All market outlooks, themes, strategies, allocations and holdings discussed herein are subject to change. There can be no assurance that Spider Management can successfully execute the above or any other strategies.

CONFIDENTIAL – For University of Richmond Use Only. Not For Redistribution

Our Opportunity

Purpose

• Non-Profit Work
• Alma Mater
• Richmond Community

89

Networking

Education

• Investment Manager Meetings
• Investment Committee Meetings
• Partner Meetings
• Conferences & Other Events

• CFA
• Educational Benefits
• On the Job Training

CONFIDENTIAL – For University of Richmond Use Only. Not For Redistribution

Open Positions

Recruiting Timeline

If you have any additional questions, please email:

dcoyle@richmond.edu

lfeng@richmond.edu

lkrogh@richmond.edu

wgalbraith@richmond.edu

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91

Rising Senior Internship

Rising Junior Internship

CONFIDENTIAL – For University of Richmond Use Only. Not For Redistribution

Investment Analyst Role

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92

Source: Spider Management. All market outlooks, themes, strategies, allocations and holdings discussed herein are subject to change.

CONFIDENTIAL – For University of Richmond Use Only. Not For Redistribution

Questions?

FIN 360

Principles of Financial Management

Sep. 1, 2025

To Do

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• Select your stock for Part I of the Financial Analysis Project
• Upload your PIB (zipped file) by 4pm Friday, Sept. 5

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Review & Preview

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• What’s the goal of financial management?
• How do managers achieve this goal?

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Today:

• Financial statements.

FIN 360

Principles of Financial Management

Aug. 27, 2025

To Do

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• Select your stock for Part I of the Financial Analysis Project
• Upload your PIB (zipped file) by 4pm Friday, Sept. 5

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Review & Preview

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• What three questions does corporate finance address?
• Role of CFO, Treasurer, Controller?

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Today:

• Forms of business organization.
• The goal of financial management.
• Beginning discussion on financial statements.

FIN 360

Principles of Financial Management

Professor: Joe Farizo, PhD

Let’s begin with 4 stories…

CHRISTINE MCCARTHY CFO Disney, 2015 - 2023

Bob Iger

CEO

2005-2020

📈+400%

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Bob Chapek

CEO

2020-2022

📉-16%

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Well respected on Wall Street and by Disney’s Board of Directors. Expressed concerns to the Board that her boss, CEO Bob Chapek, was not well suited for his role. The Board listened and rehired the former CEO, Bob Iger, after ousting Chapek.

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A South Dakota rancher who won a $232 million lottery, took the lump sum payment of $88.5 million after taxes instead of the annuity paying the full amount over time. Bought a 50,000-acre, 4-house, multiple-barn ranch.

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Sold the ranch for $37 million, more than double what he paid.

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NEAL WANLESS Rich Guy

SHONDA RHIMES Writer, Producer, Showrunner

Creator/producer/writer of shows like Scandal, Grey’s Anatomy, How to Get Away with Murder, and Bridgerton. Her shows generated an estimated $2 billion in revenue for advertising and licensing at ABC before she was recruited to work at Netflix for a reported $150 million.

SAM ALTMAN CEO, OpenAI

Open AI, in partnership with SoftBank, Oracle, and MGX, launched the Stargate Project to invest $500 billion over the next four years to build AI infrastructure in the US.

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What do these stories have in common?

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They pose interesting questions.

• What is the role of management and the Board at Disney?
• Why take the lump sum instead of the annuity in a lottery?
• How does Netflix put a “price” on content?
• How did OpenAI and its partners arrive at a deal and decide on its value?

But moreover...

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Finance offers answers.

And FIN 360 is just the beginning!

FIN 360: Principles of Financial Management

About Me

Dr. Joseph David Farizo

...or just “Joe”

Office: 329 RSB

Office hour appointments (in-person) at link in lower right corner of website.

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• Lafitte, Louisiana
• Undergrad & Masters @ LSU; PhD @ UK
• Research: stock market participation, mutual funds, advisors
• Experience: insurance, consulting (private company valuation)
• Interests: travel, motorcycling

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About You

Majors/Concentrations/Minors: Finance, Math, Psych, Business Analytics, Economics, Accounting, Marketing, Management Entrepreneurship/Consulting, International Business, Biochemistry, Molecular Biology, Music, Chinese Studies, Gender and Sexuality, Political Science, Philosophy, Leadership, German, Math Econ, History

Syllabus Highlights

Textbook:

• Optional

Graded Assignments:

• 2 midterms and a comprehensive final
• 6 Problem Sets
• Financial Analysis Report

Calculator:

• TI BAII Plus

Professionalism

• Prepare.
• Be ready to participate if called on.
• Keep appointments.
• Attend class, and be on time.
• No in-and-out.
• Written notes directly on lecture notes or on iPad/tablet.
• Phones and laptops put away unless otherwise stated.
• Late assignments not accepted.

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Financial Analysis Project

Part I: Due Sept. 5 @ 4pm

• Choose a company
• Company you want not on the list? Schedule an appointment!
• Upload documents normally found in a “public information book”
• Annual and quarterly reports
• Proxy statement
• Earnings calls
• Financial statements
• We’ll work with this documents to complete Part II (which is due at the end of the semester)

To Do

• Sit in a “permanent” seat next class.
• Read the syllabus.
• Complete emailed survey if you haven’t already.
• Complete Part I of the Financial Analysis Report by Friday Sep. 5 @ 4pm.
• Buy the TI-BAII Plus.

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I will send an email with these reminders and a link to these slides today.