Master of International Business “Corporate Finance, Control and Risks”
Major
Management / Financial Management
Availability
Mandatory
Teachers responsible
M.E. Gogolukhina, PhD in Economics
Languages
English
ECTS
Hours
Contact hours: 28
Self-study: 48
Total = 76
Pre-requisites
The course is dedicated to budgeting and assessment of business performance of an international company. Students should have background in accounting, financial management and economics of enterprise. The treatment does not suppose advanced mathematical knowledge of students.
Course aim
Course objectives
Essential goal of studying this course for students is to understand importance and meaning of financial planning and assessment for Russian and international companies, as well as to get acquainted with methods of financial responsibility centres management on the basis of financial and non-financial indicators.
Objectives of the course are to give student theoretical knowledge and provide them with professional competences in planning and analysing business performance of an international or Russian commercial company.
In result the course studying the student should:
Þ know
o definition and types of budgets
o the main stages of a budgetary process
o the purpose and methods of business performance management
Þ get skills
o to analyse financial structure of a company
o to perform break-even and contribution margin analysis
o to form the master budget of an international company
o to form and to analyse a company’s cash budgets
o to analyse performance-to-budget variances
Þ get idea of
o connection between strategic planning and operational budgets
o the modern forecasting methods
o zero-based budgeting
Course content
The course provides students with theoretical understanding of the budgeting process of an international company, as well as with practical skills of its organising. It is suitable for those who intend to work and to apply the acquired knowledge in Russian and international companies. The course starts with description of the budgeting process and budgetary system of a firm continuing with analysis of the master budget, cash budgets and zero-based budgets. Topics dedicated to business performance management include break-even, contribution and variance analysis. A major part of the course describes existing methods of financial forecasting.
Topics summary
Date
Theme
Homework requirements Expectations/assignments due for next class
Hours,
Total
15 Nov.
Topic 1. Introduction.What is a budget and budgeting? Budgeting terms. Budgeting areas. What does effective budgeting require? Types of Budgets.
Topic 2. Strategic planning.What is strategic planning and what are the elements of a strategic plan? Strategic planning process. Connection between the strategic planning and budgetary process.
Expectations: Please read the relevant topics in
1. Sid Kemp, Eric Dunbar. Budgeting for Managers: McGraw-Hill, 2003
2. Jae K. Shim, Joel G. Siegel. Budgeting Basics and Beyond: Wiley, 2005
Graham Kenny. Strategic Planning and Performance Management: Develop and Measure Winning Strategy: Elsevier, 2005
16 Nov.
Topic 3. Budgetary process.Budgetary Process steps. Financial structure of the company. Organizational and financial structures of the company. Organizing financial structure. Directions of the budgetary process. Steps to from a budgetary structure
Topic 4. Break-even and contribution margin. Break-even and Contribution Margin Analysis. Types of costs. Sales Mix Analysis. Analytical usefulness of contribution margin analysis.
Expectations: Please solve problems and read the relevant topics in
1. Sid Kemp, Eric Dunbar. Budgeting for Managers: McGraw-Hill, 2003
2. Jae K. Shim, Joel G. Siegel. Budgeting Basics and Beyond: Wiley, 2005
3. R. Charles Moyer, James R. McGuigan, William J.Kretlow. Contemporary Financial Management: West Publishing Company, 1990
17 Nov.
Topic 5. Master budget.Master budget categories. Budgets of financial responsibility centers. Planning horizon & corrections frequency. Master budget structure.
Expectations: Please read the relevant topics in Jae K. Shim, Joel G. Siegel. Budgeting Basics and Beyond: Wiley, 2005
18 Nov.
Topic 6. Variances. Budget Accuracy. Types of Standards. The performance-to-budget report. The benefits of budgetary control. Variances, causes and responsible parties.
Topic 7. Forecasting. Forecasts users. Forecasting Methods. Criteria to select a forecasting technique. Assumptions underlying the forecasting. Steps in the Forecasting Process
Expectations: Please solve problems and read the relevant topics in
1. Jae K. Shim, Joel G. Siegel. Budgeting Basics and Beyond: Wiley, 2005
2. Graham Kenny. Strategic Planning and Performance Management: Develop and Measure Winning Strategy: Elsevier, 2005
19 Nov.
Topic 8. Cash budget.Major sections of the cash budget. Flowchart of a planning model. Percentage of sales forecasting method.
Expectations: Please solve problems and read the relevant topics in
1. R. Charles Moyer, James R. McGuigan, William J.Kretlow. Contemporary Financial Management: West Publishing Company, 1990
2. Sue Nugus, Financial Planning using Excel: Forecasting, Planning and Budgeting Techniques: CIMA Publishing, 2005
20 Nov.
Topic 9. Zero-based budgeting.What is Zero-base budgeting (ZBB). ZBB ranking techniques. A decision package content.
Topic 10. Business-performance management. Systems of Business performance management (BPM). Performance management framework. The concept of value. Areas from which top management could gain knowledge by using BPM.
Expectations: Please prepare your presentations and read the relevant topics in
1. Sid Kemp, Eric Dunbar. Budgeting for Managers: McGraw-Hill, 2003
2. Jae K. Shim, Joel G. Siegel. Budgeting Basics and Beyond: Wiley, 2005
3. Tony C. Adkins. Case Studies in Performance Management. A Guide from the Experts: Wiley, 2006
Teaching
Studies are held in form of interactive seminars which is a good combination of lectures and practical classes.
Lectures are provided with a PowerPoint presentation and handouts which contain the outline of the lectures, details of suggested readings, problems and questions for discussion in classes.
During the practical part students are involved into discussions, case studies and problems solving. A special day is foreseen to problems solving with the help of Excel.
For the last seminar students have to make their presentations of a business case using Tony C. Adkins. Case Studies in Performance Management. A Guide from the Experts: Wiley, 2006
Assessment
Students get their task to make a presentation for the last seminar and get a mark according to the standard valuation system.
At the end of the course students have a two-hour written examination based on the full syllabus. The examination contains:
1. four multiple-choice questions (4 points)
2. three open questions (9 points)
3. one problem to be solved (7 points)
Indicative reading
1. Jae K. Shim, Joel G. Siegel. Budgeting Basics and Beyond: Wiley, 2005
2. Sid Kemp, Eric Dunbar. Budgeting for Managers: McGraw-Hill, 2003
3. R. Charles Moyer, James R. McGuigan, William J.Kretlow. Contemporary Financial Management: West Publishing Company, 1990
4. Sue Nugus, Financial Planning using Excel: Forecasting, Planning and Budgeting Techniques: CIMA Publishing, 2005
5. Graham Kenny. Strategic Planning and Performance Management: Develop and Measure Winning Strategy: Elsevier, 2005
6. Tony C. Adkins. Case Studies in Performance Management. A Guide from the Experts: Wiley, 2006
Supplementary reading list
1. Diane C. Valenti. Training Budgets Step-by-Step: Wiley, 2004
2. Don Dayananda, Richard Irons, Steve Harrison, John Herbohn and Patrick Rowland. Capital Budgeting. Financial Appraisal of Investment Projects: Cambridge University Press, 2002
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