A recent transformation of a sweatshirt to a jacket reminds me of an important adjustment that changes the fit dramatically.  I compared the shoulder seams of the sweatshirt to a simple jacket pattern and found the sweatshirt shoulder seam needed to be lowered at the armhole to make the fit less baggy.  I cut off a wedge 1/2" wide at the armhole to nothing at the neck.  Along with this alteration, I had to lower the armhole at the side seams the same amount to accomodate the sleeve cap.