Module BUSI56715: Dynamic Financial Decision Making

Department: Business School (Business)

BUSI56715: Dynamic Financial Decision Making

Prerequisites

• None

Corequisites

• None

Excluded Combination of Modules

• None.

Aims

• To develop specialist knowledge of, and skills in applying, dynamic financial statements and dynamic financial decision-making techniques.

Content

• The scope of Dynamic Financial Decision Making
• Income - the anchor for business activity, dynamic Indicators, dynamic and Static costs
• The DNC Statement
• The dynamic indicators of efficiency, effectiveness and risk (Gross contribution, dynamic Net Contribution and the Breakeven Gap)
• The DNA Statement
• Static Net Assets (SNA), Stock, Debtors and Creditors
• Dynamic Net Assets (DNA)
• Dynamic Cash Movement (DCM)
• Visual Representations of your dynamic indicators
• Trend analysis - breakeven, SNA and DCM
• Calculating targets for your dynamic indicators
• Price volume and Contribution
• Cost Volume and Contribution
• Closing gaps - managing changes to your dynamic indicators.

Learning Outcomes

• By the end of the module, students should:
• Be able to identify dynamic (variable) and static (fixed) costs within their organisation in a depth appropriate to their needs.
• Have a critical appreciation of the limitations of the traditional breakeven analysis.
• Have a critical awareness of how a strategic product mix will have different reactions to dynamic financial decision making techniques.
• Be able to recognise the key components of static net assets and now they interact with each other.
• Be able to identify up to eight dynamic indicators and how management decision is likely to impact on all of these.

• By the end of the module, students should:
• Be able to restructure the traditional profit and loss account within their organisation into one more appropriate to a dynamic analysis.
• Be able to reconcile where traditional financial statements differ (and agree) with dynamic financial statements, and have a critical appreciation of the role and importance of both inside and outside their organisation (stakeholders).
• Be able to produce and interpret charts and graphs as a visual aid to Management Accounting and Control Systems and communication of financial information.
• Be able to set meaningful targets for all dynamic indicators and therefore be able to predict the impact on breakeven and cash.
• Be able to interpret 'gaps' between targets and actual performance and understand their implications on contribution and cash flow results.
• Be able to make dynamic decisions based on mathematical modelling that both predict and suggest alternative courses of management actions.

Written communication; planning, organising and time management; problem solving and analysis; using initiative; computer literacy.

Modes of Teaching, Learning and Assessment and how these contribute to the learning outcomes of the module

• Lectures and seminars, supported by guided reading, will be used to introduce and explore the key concepts and theories.
• Case studies and groups exercises will help them develop their own synthesised models. the assignments and mentor support will then help them adapt and apply these to the specific needs of their own organisation.
• Financial exercises used both during the seminars and given out for student practice post seminar help practice and develop the technical skills inherent in Enterprise Management Accounting and control Systems.
• An in-depth case study is introduced to allow the participants to develop the techniques from first principles on a "live" business. this will focus on the process of dynamic financial decision making.
• computer based mathematical modeling will be used to combine financial analysis with business know-how.
• Module tutors and mentors (Associates of the foundation for SME Development will assist students in developing individual learning and reflection (as per Learning Log entries).
• The summative assignment will require the student to calculate their financial ratios based on the historic statutory accounts. They will look at this from a number of stakeholder perspectives and they will map these ratios to significant changes in the development of the business to its current status. this assignment allows students to consider the practical application of the subject covered.

Teaching Methods and Learning Hours

Summative Assessment

Formative Assessment:

■ Attendance at all activities marked with this symbol will be monitored. Students who fail to attend these activities, or to complete the summative or formative assessment specified above, will be subject to the procedures defined in the University's General Regulation V, and may be required to leave the University