00251 - Economics and Business Organisation

Course Unit Page

Academic Year 2018/2019

Learning outcomes

At end of course the student acquires the knowledge on the economy and the organization of enterprises with regard to the following aspects: understanding and reading economic and financial results as indicated in the budget, analysis of product costs and budget drafting and, lastly, investment financial valuation.

Course contents

A) Company overview:
a. Business economics and management.
b. Organizations as open systems
c. Conceptual models for assessing companies competitive analysis
d. The role of information for decision making
e. Controlling companies economic outcomes and performance

B) Balance sheet:
a. Assessing and measuring economic issues within a company: balance sheet structure
b. The effect of decisions on balance sheet
c. Commercial transactions: their definition and their impact on balance sheet
d. Introduction to financial and accounting principles.
e. Costs and earnings measurement: the profit and loss account and its structure
f. Different structures and uses of balance sheet and profit and loss account. The legal framework

C) Analyzing costs to support decision making:
a. Different kinds of information provided within management accounting: how to use these information to take decisions
b. Relations between decisions and different types of costs
c. Relations between costs and activities: variable costs, fixed costs, break-even point
d. Direct costs, indirect costs and allocation problems. Systems for determining product costs.

D) Short term decisions:
a. Differential costs and revenues
b. Different kinds of costs for different decision-making problems.
c. Choosing between alternatives: full costs and differential costs
d. Making a decision among different alternatives
e. Assessing future costs and sunk costs

E) Long term decisions: choosing between investments
a. The concept of investment and different kinds of investments
b. Capitalization and discounting back: elements of financial mathematics.
c. Determining the value of an investment: the Net Present Value.
d. Investment valuation: steps of the decision procedure.
e. Basic concepts to evaluate an investment: the expected return rate, the economic life of a project, the relevant cash flows.
f. Problems in assessing cash flows.
g. Other methods to gain investment valuation: internal return rate, average pay-back time, the average accounting profit.
h. Investment valuation within the firm schedule.

Office hours

See the website of Gianrico Quattrocolo