82189 - Management Control Systems Lab

Learning outcomes

The course aims to provide students with some tools and techniques of cost management in several contextes (for-profit, non-profit, private, public). By the end of the course students are able to: (a) to define the network of responsibility center, the different types of responsibility centers, and the basis for choosing the most appropriate type; (b) to understand what are the phases of the management control process and the characteristics of each; (c) to understand some of the issues involved in measuring non-financial performance and to implement effective integrated (financial and non-financial) measurement systems.

Course contents

1. The course introduces and develops a framework for business analysis and valuation using financial statement data. There are 4 key components for performing an effective financial statement analysis, namely:  Business strategy analysis, accounting analysis, financial analysis and prospective analysis.

2. The first step, business strategy analysis involves developing an understanding of the business and the competitive strategy of the firm being analyzed. We discuss contemporary tools for analyzing a company's industry, its competitive position and sustainability taking real world examples from prominent firms which are leaders in the sectors they operate (Chp. 2 of the textbook).

3. Accounting analysis involves developing general approaches to analyze assets, liabilities, revenues and expenses. The focus will mostly be on cash flow statements since cash flows are fundamental for a correct appraisal of firms' market value. Then we proceed with a recasting of financial statements to a common format to permit an easy comparison with peers and over time (Chp. 3 of the textbook).

4. The goal of ratio analysis involves assessing how various line items in a firm's financial statements relate to each other. This is followed by cash flow analysis which allows the analyst to examine the firm liquidity position and how the firm manages its operating, investment and financing cash flows (Chp. 5 of the textbook).

5. Prospective analysis includes two tasks: Forecasting and valuation. First we use the tools learned in the previous chapters to make the best possible forecast of future revenues, expenses, assets and liabilities which at the end determine future cash flows of the firm. Subsequently, these cash flows are discounted in order to determine the current market value of the firm's assets and shareholders' equity (Chp. 6-8 of the textbook).

Readings/Bibliography

Business Analysis and valuation, Palepu, K.G., Healey, P. M., Peek, E, 5th edition, Cengage.

ISBN: 978-1-4737-5842-1

The necessary chapters for the exam are 1, 2, 3, 5, 6, 7 and 8. Chapters 9 and 10 are suggested readings to better understand equity security analysis and credit analysis. However, these two chapters will not be included in the material to study for the exam.

Teaching methods

The instructor will principally adopt frontal lectures as a teaching method. However, there will be case study discussions on specific topics discussed in class. There are also problem solving sessions for several chapters. Dates for each of them are explained in detail in the course syllabus on Virtuale. 

Class participation is highly recommended. Students are encouraged to participate actively in lectures and to discuss openly with the instructor and colleagues on the topics discussed in class. 

Assessment methods

There is a partial exam after each sub-cycle. Each exam will comprise 16 multiple choice questions and will cover the material of that specific sub-cycle (both theoretical and problem solving). Exams will be on EOL.

For those who want to have a full exam, this will cover all the material of the course. Dates for the exam will be notified to students for each exam session.

 

Please note carefully: Exam modalities could be subject to changes due to the evolving of the pandemic situation.

 

Teaching tools

Virtuale

Microsoft applications such as Word, Excel, PowerPoint

Office hours

See the website of Andi Duqi