BØK 3651 Strategic Management Accounting

BØK 3651 Strategic Management Accounting

Course code: 
BØK 3651
Department: 
Accounting, Auditing and Business Analytics
Credits: 
7.5
Course coordinator: 
Pål Berthling-Hansen
Espen Roy Skaldehaug
Product category: 
Bachelor
Portfolio: 
Bachelor of Business Administration - Programme Courses
Semester: 
2019 Spring
Active status: 
Active
Teaching language: 
Norwegian
Course type: 
One semester
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 outcomes - 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

Part 2
In part 2 the students shall solve three cases with a multi-cyclic perspective. Case 1 studies the distinction between cash flow and profit as well as basic profitability methods such as net present value and internal rate of return. Case 2 addresses working capital in particular, while Case 3 studies problems related to risk and simulation.
Acquired knowledge part 2:

  • 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.

Part 3
Part 3 is partly based on self-tuition. The students shall improve their spread sheet skills. Spread sheets are among the tools used in the other two parts of the course.
Acquired knowledge part 3:

  • 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.
Learning outcomes - Skills

After having completed the course the students shall be able to account for

  • 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
Learning Outcome - Reflection

After having completed the course the students shall have gained an understanding of strengths and weaknesses of business economics modelling. The students shall have understood that modelling is very important in order to study the significance of the various underlying variables while having an understanding that a financial decision model rarely manages to quantify all relevant decision factors in financial terms.

Course content

Part 1: Simulation game (40%)

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

Part 2: Financial case (40%)

  • 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

Part 3: Practical use of Excel (20%)

  • Financial functions
  • Targeting and problem-solving function
  • Regression
  • If – sentences
  • The scenario function
Learning process and requirements to students

The course will include lectures, self-tuition, and teamwork. The teamwork consists of four decision hand-ins in connection with the simulation game. 

The course duration is 45 hours including lectures and assignments reviews conducted by the lecturer,

The students must actively use a spread sheet program (Excel is used in the course). When submitting assignments it may be relevant to use a word-processing program (e.g. Word). If the lecturer uses exercises that are not included in the compulsory syllabus they will be posted on its learning.

E-Learning

In course delivery as online courses, lecturer will, in collaboration with the student administration, organize an appropriate course implementation, combining different learning activities and digital elements on the learning platform. The online students are also offered a study guide that will contribute to progression and overview. Total recommended time spent for completing the course also applies here.

Software tools
No specified computer-based tools are required.
Qualifications

Higher Education Entrance Qualification

Required prerequisite knowledge

The course requires a basic knowledge of Excel and general expertise in business economics as well as mathematics and statistics equivalent to what is included in the first two years of the Bachelor of Business Administration programme.

Exam categoryWeightInvigilationDurationSupport materialsGroupingComment exam
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
BØK36511
Grading scale:
ECTS
Grading rules:
Internal and external examiner
Resit:
Examination every semester
100Yes5 Hour(s)
  • BI-approved exam calculator
  • Simple calculator
Individual
Exams:
Exam category:Submission
Form of assessment:Written submission
Weight:100
Invigilation:Yes
Grouping (size):Individual
Support materials:
  • BI-approved exam calculator
  • Simple calculator
Duration:5 Hour(s)
Comment:
Exam code:BØK36511
Grading scale:ECTS
Resit:Examination every semester
Exam organisation: 
Ordinary examination
Total weight: 
100
Workload activityDurationType of durationComment student effort
Teaching45Hour(s)
Prepare for teaching125Hour(s)
Group work / Assignments25Hour(s)Simulation game
Examination5Hour(s)
Expected student effort:
Workload activity:Teaching
Duration:45 Hour(s)
Comment:
Workload activity:Prepare for teaching
Duration:125 Hour(s)
Comment:
Workload activity:Group work / Assignments
Duration:25 Hour(s)
Comment:Simulation game
Workload activity:Examination
Duration:5 Hour(s)
Comment:
Sum workload: 
200

A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 7,5 ECTS credit corresponds to a workload of at least 200 hours.

Talis literature

Obligatorisk/Compulsory

Book
Authors/Editors År Tittel Edition Publisher StudentNote
Winston, Wayne L. cop. 2016 Microsoft Excel 2016: data analysis and business modeling
Chapter
Authors/Editors År Tittel Journal Edition Publisher StudentNote
Modeling in a problem-solving framework Modeling in a problem-solving framework S. 16-50
Spreadsheet engineering Spreadsheet engineering S. 95-118
Regression analysis Regression analysis S. 159-185
The need to acknowledge risk : thinking "ranges and distributions" rather than "one single estimate" The need to acknowledge risk : thinking "ranges and distributions" rather than "one single estimate" S. 69-87
Article
Authors/Editors År Tittel Edition Publisher StudentNote
Ek, Ron; Guerin, Stephen 2011 Is there a right level of working capital?
Reider, Rob 2005 Understanding effective cash management.
Richards, Verlyn D.; Laughlin, Eugene J. 1972 A Cash Conversion Cycle Approach to Liquidity Analysis.
Website
Authors/Editors År Tittel Edition Publisher StudentNote
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