B1988 - Economics and Business Organization P

Course contents

Introduction to the course

1. The firm as a system: business economics within the framework of the economic disciplines.
2. Firms and businesses: definitions, purposes, objectives.
3. The context in which firms operate today: an overview of the reference scenario and of the transitions towards sustainability, and of how they fit into business management.
4. Introduction to the control of business performance: the role of economic and financial information.

Part 1 — Financial statements as a tool for business analysis and management

1. The problem of recording and measuring the economic aspects of management: the role and structure of the annual financial statements.
2. The balance sheet: the relationship between its structure and items; the effects of management decisions on the balance sheet.
3. Economic transactions, their recording and their impact on the balance sheet.
4. An outline of how accounting systems work, aimed at understanding how the figures in the financial statements are formed.
5. Measurement and representation of costs and revenues: the income statement and its structure.
6. An outline of the cash flow statement: what it represents, how it is derived from the financial statement data, what information it provides on cash flow dynamics, and how its content is read.
7. The analysis of financial statement data for interpreting the firm's results and its economic, financial and balance-sheet position.
8. An outline of the structure of statutory (civil-law) financial statements and of the criteria for reading them.

Part 2 — Cost analysis for decision-making

1. The nature of management accounting: the different types of information supporting management decisions.
2. The relationships between costs and decisions: cost types and configurations.
3. The relationships between costs and activity volumes: variable and fixed costs, break-even analysis, the concept of operating leverage.
4. Direct and indirect costs and allocation problems. Product costing systems.

   Short-term decisions among alternatives

5. The concept of the differential: differential costs and revenues.
6. Cost configurations for different decision problems.
7. Typical problems of choice among alternatives: costs only; differential costs and revenues.
8. The stages of analysis in problems of choice among alternatives.
9. The estimation of future costs and the treatment of sunk costs.
10. An outline of performance measurement: what it means to measure a firm's performance, and the purposes of performance measurement systems.

Part 3 — Capital budgeting: the stages of the investment decision process

1. The concept of investment and the different types of investment.
2. Financial equivalence, compounding and discounting.
3. Determining the value generated by an investment: the Net Present Value (NPV) method.
4. The stages of the investment decision process.
5. The elements required to assess a project economically: the required return, the project's economic life, the relevant cash flows.
6. The problems of determining cash flows.
7. Other investment appraisal methods: the internal rate of return, the payback period, the accounting rate of return.
8. An outline of investment selection criteria: how one moves from the outcome of the appraisal to the decision, between accepting or rejecting a project and comparing alternatives.

Readings/Bibliography

R.N. Anthony, D.F. Hawkins, D.M. Macrì, K.A. Merchant (2025), Il Bilancio. Analisi economiche per le decisioni e la comunicazione della performance (16th edition), McGraw-Hill, Milan, chapters 1 to 9; 10.1, 10.2.1, 10.2.7, 10.5.2; 11 and 12.

R.N. Anthony, D.F. Hawkins, D.M. Macrì, K.A. Merchant (2025), Sistemi di controllo di gestione: analisi economiche per le decisioni aziendali (16th edition), McGraw-Hill, Milan, chapters 1, 2, 3, 4, 5, 16 and 17; 19.1, 19.2, 19.3, 19.4, 19.5.1.

Teaching methods

Lectures, in-class exercises and cases to consolidate the practical application of the tools presented.

Assessment methods

The final examination is a written test, consisting of practical exercises and multiple-choice questions. All components contribute to the overall mark.

The exercises cover the following topics: financial statement analysis; cost analysis and short-term decisions; investment analysis and medium- to long-term decisions.

The multiple-choice questions cover the theoretical topics of the whole course.

Examination dates are set according to the academic calendar and communicated through the AlmaEsami service.

Six examination sittings are scheduled during the academic year, distributed across the various examination periods.

Registration for the examination is made exclusively through the AlmaEsami service.

The examination mark may be refused once.

Teaching tools

Lectures with projection of summary slides, case studies and exercises.

Office hours

See the website of Angela Montanari