The overriding objective of the Finance content
in the curriculum is to aid the student in developing the knowledge
base and skills required for setting objectively determined organizational
goals, assessing overall organizational performance, and evaluating
the contribution of specific initiatives to corporate objectives.
These are necessary activities in organizations that seek to prosper
in the increasingly competitive global environment. The desired
end result of our content is to provide the manager with the ability
to translate the consequences of managerial policy alternatives
(for example, customer value determination and lean manufacturing)
into the financial consequences that are ultimately assessed by
the firm's investors.
Naturally, we start by understanding the relationships
among organizational stakeholders, and by presenting the concept
of value-based management as a unifying approach to corporate resource
management. This involves relating financial performance measures
to strategic objectives and to broad issues such developing customer
value, human resources and intellectual capital.
Some of the "tools" discussed are:
- Balanced Scorecard
- Enterprise and Equity Valuation
- Economic Value Added (EVA)
Since accounting is the “language of business,”
and since the essence of accounting is the objective measurement
of organizational assets and earnings, it is natural that the finance
curriculum content builds upon the student's working knowledge of
financial statements and accounting principles. These principles
are the building blocks for the various tools and techniques of
management are discussed.
Economic Value Added (EVA) has recently gained
enormous popularity as a comprehensive tool for organizational performance
evaluation and management compensation policy. We discuss EVA as
a natural extension of value-based management, and explore its utilization
of financial statements as a basis for performance measurement.
We also broach the complex issues associated with
managing organizational risk. This subject has taken on increasing
strategic significance as firms become more engaged in today’s
globally competitive environment. Exposure to risks associated with
changes in commodity prices, foreign exchange rates, and interest
rates has become a major concern in many companies. Understanding
the nature of these risks and measuring corporate risk exposures
are essential to determination of the need to manage them.
The major learning objectives
1. The student will be able to set objectively
determined organizational goals and assess overall organizational
performance with respect to those goals.
2. The student will be able to evaluate financial performance
measures to strategic objectives.
3. The student will be able to evaluate the contribution of specific
initiatives to corporate objectives.
4. The student will be able to assess and manage the firm’s
working capital requirements.
5. The student will be able to measure and manage organizational
risk.
Topics
- Principles of discounted cash flow analysis
- Valuation of corporate securities
- Concept of a firm's cost of capital
- Short-term financial planning
- Corporate investment decisions, capital budgeting
- Corporate financing decisions
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