APPLIES TO ACADEMIC YEAR 2014/2015

BØK 3651 Strategic Management Accounting

Responsible for the course
Pål Berthling-Hansen, Espen Skaldehaug

Department
Department of Accounting - Auditing and Law

Term
According to study plan

ECTS Credits
7,5

Language of instruction
Norwegian

Introduction
Strategic management accounting is part of the business studies discipline and builds on knowledge acquired in management accounting, finance, accounting, microeconomics and methodology. The term “strategic” in the course title emphasizes the focus on optimisation in a multi-cyclic perspective. The aim of the course is to further develop the students’ knowledge and skills within analysis of business economics problems, to enable them to propose optimal solutions to the owners. The course is case- and game-oriented. The methodology and theories applied in the course are generally well-known and applied in previous courses but the problems to be addressed are more complex, extensive and to some extent interdisciplinary. Excel will be used for problems related to budgeting, modelling, risk management and strategic decisions, as well as analyses in connection with a simulation game.

Learning outcome
Acquired Knowledge
The course is divided into three main parts:

Part 1
In Part 1 the students conduct a simulation game in which they shall acquire and further develop knowledge in budgeting, market adaptation and optimisation with limited capacity, as well as modelling.
Acquired knowledge part 1:

• Acquire knowledge about setup of profit-, cash- and balance sheet budget
• Understand the connection between the profit-, cash- and balance sheet budget
• Understand different variants for calculating marginal cost and marginal income based on accounting and market data
• Understand uni-cyclic optimization based on marginal income and marginal cost

• Understand the relevance of cash flow for calculating uni-periodic profitability.
• Perform tax adjustments of cash flow and required rate of return.
• Understand the use of net present value and internal rate of return, as well as interpret the contents of these measurements of profitability.
• Understand how cash flows are modelled
• Understand how to calculate required working capital as well as various target figures. Examples: LG1, LG2 and CCC.
• Understand the meaning of the concept of relevant risk and simulation.

• Understand how various financial Excel-functions can be used as tools for analysis or as decision basis. Example:
  Net present value, internal rate of return, targeting and problem-solving function
• Understand how other Excel-functions such as SUM, IF, GOALSEEK, SOLVER can be used.

• How financial values are created and how they can be calculated
• The connection between various business economics decision models
  e.g. The connection between marginal revenue/marginal cost theory and the present value method
• how one can model business economics problems in Excel and how through simulation one can assess the effects of changes in the model parameters?
• how various company decisions affect profit, cash flow and balance sheet
• how one can use a cash flow statement to calculate funding needs
• use of multi-cyclic assessments in connection with particular investment decisions
• use of regression analysis in Excel to estimate demand functions and interpret results

• Marginal income/marginal cost
• Optimal adaptation with and without capacity limitations
• Strategic (multi-cyclic) problems
• Accounts modelling
• Practical use of problem-solving function

• Significance of working capital under value maximization
• False investments
• Modelling
• Simulation
• Relevant risk
• The relationship between risk and return under various ownership structures
• A comparison between cash flow and accounting data
• Decision trees as decision bases

• Financial functions
• Targeting and problem-solving function
• Regression
• If – sentences
• The scenario function

The course duration is 45 hours including lectures and assignments reviews conducted by the lecturer.Recommended use of hours:

Recommended use of hours: