Business Analytics

Introduction

A number of great business decision has been made without any guidance from economic theories and without any analysis of existing data. In fact, the best decisions are typically the outcome of «gut feelings» and a significant amount of pure luck. However, the number of good decisions based on «gut feelings» is completely swamped by the number of really bad decisions made this way.

Therefore, this module shows how decisions can be guided by theory and justified by careful analysis of existing data. If, after all this, you decided to ignore the insights from theory and data—great—what matter is that your decisions are as informed as they can possibly be.

Business decision-making require identification of alternatives. What is needed to arrive at decision alternatives are varied:  Some situations allow access to useful data while others do not. As a result, preceding circumstances need to be considered that define the decision space. For example, regulatory regimes and market actors steer how decision-making information is defined and made available.

This module coherently provides conceptual frameworks, analytical instruments and procedures, and rigorous lines of argument that allow for interpretation of decision-making outcomes.

The course covers four core topics: Managerial Economics, Financial Accounting, Corporate Finance and Management Accounting.

Course content

The course covers four core topics:
Managerial Economics
Financial Accounting
Corporate Finance
Management Accounting
 

Managerial Economics

Introduction
Economics is the study of allocation of scarce resources, and how economies use markets, prices, and coordination mechanisms to do so. In this course, we emphasize market theory, a study of monopoly and oligopoly, and the implementation of strategies.

Learning outcomes - Knowledge
The purpose of this course is to study the behaviour of rational economic agents in order to understand how their interaction – under various market arrangements – determine the price –and output constellations we observe in “the real world”. Particular emphasis will be placed on the strategic considerations of profit maximizing business firms  for instance in regard to their decisions concerning advertising, product differentiation, vertical integration and entry/exit in an industry.
Most business decisions will benefit from being evaluated with a firm grasp of the equilibrium response in the market. The ambition of this course is to develop in the students an intuitive and also analytical feeling for the workings of the market mechanism.In the last 20 years attention has been directed more and more towards a business managers strategic decisions, by which we mean decisions in situations where there are interactions between rational economic actors; actors which may all be smart , clever, energetic and well informed.What is called game theory offers a scientific approach to strategic decision-making of this kind, and game theory will accordingly play a role in this course as a theoretical model to approach the solutions of real-world problems.

Course content

• Demand, supply and the market
• The theory of the firm
• Costs and supply
• Perfect competition and monopoly
• Market structure
• Game theory and interdependent decisions

Financial Accounting

Introduction
The set of financial accounts is usually the primary channel for reporting the financial affairs of any organisation. A thorough understanding of such information is absolutely vital for any senior level manager involved in the discussion of a company’s financial state of affairs. Financial accounting based information is also the starting point of the financial aspects of most decisions aimed at improving shareholder value.

Learning outcomes - Knowledge
Students are expected to obtain knowledge of the fundamental principles of financial accounting and obtain a thorough understanding of the financial accounting vocabulary. The course intends to give a rudimentary understanding of the mechanics of developing a set of external corporate accounts. This is an important prerequisite to understanding how to use accounting based information for corporate control and decision making. In this it is important that users of such financial accounting based information understand the limitations of such information, and when the financial accounts need adjustments to cater for various applications.

Learning outcomes - Skills
The course will teach students to conduct specific transactions in the financial accounts, conduct year-end adjustments, and produce a set of year-end accounts. Students will then learn how to conduct different types of adjustments before any type of analysis can be conducted. Different types of analysis will then be covered in order to provide input for a control and decision making emphasis, and finally briefly discuss the communication of such analysis.

Learning outcomes - Reflection
The candidates will obtain the competence to reflect on the quality of financial accounting based information for various uses, and be able to evaluate the general quality of a set of financial accounts, especially in relation to the many financial scandals that have occurred over recent years that have not been directly identifiable through financial accounting based reporting.

Course content

• Topic 1:
• The main principles of financial accounting
• Posting financial accounting transactions
• Completing year-end accounts
• Topic 2:
• Regrouping and adjusting the financial accounts in preparation for analysis
• Topic 3:
• Using financial accounting information for corporate control purposes
• Earnings related issues
• Capital structure issues
• Liquidity issues
• Other performance measures
• Topic 4:
• Using financial accounting information for corporate decision making
• Strategic decision making
• Investment decisions
• Mergers and acquisitions
• Valuation
• Operational decision making
• Budgeting
• Pricing decisions

Corporate Finance

Introduction
This course will introduce you to Corporate Finance. The main objective of the course is to provide you with insights and practical tools that will help you make sound financial decisions.The course covers two broad topics:

Part I: Financial Policy and the risk-return trade-off. 

In Part I, we will examine the factors that determine a companys need for external financing, be it debt or equity. We will then consider the optimal mix of debt and equity financing. We will also introduce you to the trade-off between risk and return in capital markets.

Part II: Valuation. 

In Part II, we will develop the tools needed for valuing investment projects, including the estimation of relevant project cash flows, estimating the cost of capital (discount rate), and dealing with risk. We will then use these tools as a basis for selecting investment projects and valuing companies.

Learning outcomes - Knowledge

• Methods for evaluating investment projects
• Handling risk in project analysis
• Determining a company and project cost of capital
• Determination of the appropriate firm capital structure
• Understanding options
• Understand key challenges of Mergers and acquisitions

Learning outcomes - Skills

• Choosing between good and bad investment projects
• Adjusting project returns for risk
• Estimating the economics consequences of mergers and acquisitions

Learning outcomes - Reflection
The participants should be able to evaluate the trade-off between risk and return in making financial decisions.

Course content

1. Introduction to corporate finance
2. Financial planning
3. Capital budgeting
4. Risk and return. CAPM.
5. Capital structure
6. Free Cash Flow
7. Cost of capital
8. Options. real options.
9. Mergers and acquisitions

Management Accounting

Introduction
Management Accounting (‘økonomistyring’) develops structures, conceptual templates, and computational approaches that allow for the quantitative interpretation and comparison of business decisions. The EMBA course does not purport to turn participants into mini-accountants but aims to link the management accounting outcomes to other functional areas and decisions, thus “connecting the dots” in terms of management.
This course interprets the management accounting toolkit against a background of flexible, decentralized organizations with a clear strategy and a service orientation. The accounting toolkit itself has evolved rapidly and now includes instruments and approaches that explicitly incorporate strategic, organizational, and market arguments while adopting multiple levels of analysis. This course addresses these new characteristics of management accounting. Notably, the course assumes a management accounting context of a knowledge-based firm, delivering its services and operating in a global environment, competing on the basis of its intangible resources and assets.

Learning outcomes - Knowledge

• To understand Management Accounting as a social science, using numerical approaches and quantitative tools to frame and direct behavior.
• To understand how management accounting is embedded in a context of multidisciplinary decision-making and is not a neutral, stand-alone toolbox.

Learning outcomes - Skills

• To have the ability to use management accounting concepts and tools.
• To interpret decision-making situations as to which management accounting tool and approach to use and which are the various limitations and biases of the selected tools and approaches.

Learning outcomes - Reflection
To not fear or get confused by numbers but instead know what message is carried within them and be able to translate and communicate that message to other disciplinary fields.

Course content
Topics covered include:

• Cost concepts and product/service costing systems;
• cost estimation and cost behaviour;
• cost allocation systems and activity-based costing;
• customer profitability analysis.