28030 - Economics and Business Organization T

Learning outcomes

The student acquires knowledge of the basic quantitative tools used for the economic and financial analysis of business decisions and the interpretation of operating results.

Course contents

1. Business economics within the economic disciplines.

2. The recording and measurement of the economic aspects of business operations: the role and structure of the financial statements. The Income Statement and the Balance Sheet. Income Statement classifications: the cost-of-sales Income Statement, the contribution-margin Income Statement, and the value-added Income Statement.

3. Cost analysis in support of business decision-making:

a. The concept of differential analysis: differential costs and revenues;
b. Cost configurations for different decision-making problems;
c. Typical choices between multiple alternatives: costs only, and differential costs and revenues;
d. Decision-making between alternatives: the stages of the analysis;
e. Estimating future costs and sunk costs.

1. Short-term decisions: differential costs and revenues; contribution-margin analysis; choosing among different alternatives.

2. Long-term decisions: the stages of the capital investment decision-making process:

a. The concept of investment and the different types of investment;
b. Compounding and discounting: elements of financial mathematics;
c. Determining the value generated by an investment: the net present value method;
d. The stages of the capital investment decision-making process;
e. The elements required for the economic evaluation of an investment project: the required rate of return, the project’s economic life, and relevant cash flows;
f. Issues related to cash-flow estimation;
g. An overview of other investment appraisal methods: the internal rate of return, the payback period, and the average accounting rate of return.

Readings/Bibliography

R.N. Anthony, D.F. Hawkins, D.M. Macrì, K.A. Merchant, Financial Statements: Economic Analysis for Decision-Making and Performance Communication (15th edition), McGraw-Hill, Milan, 2021 (excluding Chapter 10).

R.N. Anthony, D.F. Hawkins, D.M. Macrì, K.A. Merchant, Control Systems: Economic Analysis for Business Decision-Making (15th edition), McGraw-Hill, Milan, 2021 (Chapters 1, 2, 3, 4, 5, 14, 15, 16, 17 and 19).

Teaching methods

Traditional face-to-face lectures, practical exercises, and case studies.

Attendance is recommended to facilitate a better understanding of the concepts and subject matter, but it does not affect the final assessment.

Assessment methods

The final assessment consists solely of a two-hour written examination held at the end of the course.

The examination includes a number of numerical exercises (ranging from two to three) and a section of multiple-choice questions covering the theoretical topics.

The examination schedule is published well in advance on the University of Bologna’s AlmaEsami online platform (http://almaesami.unibo.it).

Registration for the examination must be completed exclusively through the AlmaEsami service.

Teaching tools

The course slides will be made available online on Virtuale; however, they do NOT replace the content of the textbooks.

Office hours

See the website of Giovanni Rocco Di Torrepadula