Financial Business Planning

Instructor:Olga Lvova
Updated:30 September, 2015

Course Summary

Planning is one of the main management functions which allows to allocate resources more effectively and to control business processes during professional activity in any company. The goal of the Financial Business Planning course is to provide an introduction to the planning process in modern companies and to equip students with practical skills of using budgeting and control technologies to improve management of the company and achieve its strategic goals. Within the course students develop companies’ budgets using computers, complete tasks and case studies, work on group projects.

Course Format

Hours of lecture Hours of discussion Hours of independent study Total numbers of hours
8 12 52 72

Please note that the time spent on independent study exceeds hours of lecture and discussion.

Course Content

The course will cover the following topics:

  1. Planning and Budgeting in Business Management
    • planning and budgeting terminology
    • key features of modern business planning
    • aims and objectives of planning
    • types of budgets
    • planning in companies of different sizes
  2. Preparing a Master Budget
    • preconditions and methodology of preparing a master budget
    • peculiarities of sales budget
    • scenario planning
    • preparing a master budget for a manufacturing company
    • preparing operating budgets
  3. Preparing Financial Budgets
    • devising a cash flow budget
    • debt management
    • a company’s main sources of income
    • creating a balance sheet forecast
  4. Using Flexible Budgets in Planning and Evaluation of Actual Outcome
    • principles of flexible budgeting
    • controlling budget implementation
    • determining the breakeven point
    • sensitivity analysis as a planning tool
    • comparing budget forecasts and actual outcomes
  5. Peculiarities of Strategic Planning
    • the main elements of strategy
    • planning targets in value based management
    • benchmarking
    • management by objectives (MBO)
    • key performance indicators (KPI)
    • the balanced scorecard

Reading List

Required reading:

  1. Shim, Jae K., Siegel, Joel G. (2011). Budgeting Basics and Beyond (4th edition). Wiley.
  2. Brealey, Richard, Myers, Stewart (2013). Principles of Corporate Finance (Chapter 29). 11th edition. McGraw-Hill/Irwin.

Recommended reading:

  1. Bobyleva, Alla (ed.) (2012). Finansovy Management. Problemy i resheniya. Urait.
  2. Brigham, Eugene, Ehrhard, Michael (2013). Financial Management: Theory & Practice (Chapters 10, 12). 14th edition. Cengage Learning.
  3. Kemp, Sid (2003). Budgeting for Managers. McGraw Hill Professional.
  4. Horngren, Charles T., Datar, Strikant N., Rajan, Madhav T. (2011). Cost Accounting: A Managerial Emphasis, 14th edition. Prentice Hall.
  5. Druri, Colin (2012) Management and Cost Accounting. 8th edition. Cengage Learning EMEA.
  6. Pearce, John, Robinson, Richard. (2012). Strategic Management. 13th edition. McGraw-Hill/Irwin.
  7. Arnold, Wiliam G. (2008). Performance Budgeting: What Works, What Doesn't. Management Concepts.
  8. Parmenter, David (2010). Key Performance Indicators (KPI): Developing, Implementing, and Using Winning KPIs. 2nd edition. Wiley.
  9. Krasova, O. (2009). Budgetirovanie i kontrol zatrat na predpriyatii. Omega-L.
  10. Nikolaeva, O. (2008). Strategicheski upravlencheskij uchet. 2th edition. LKI.
  11. Rid, S., Shoerman, Kh. (2012). Finansovy direktor kak integrator bisnesa. Alpina Publisher.
  12. Khrutskiy, V., Gamayunov, V. (2007). Vnutrifirmennoe budgetirovanie. Nastolnaya kniga po postanovke finansovogo planirovaniya. Finansy i statistika.

Online resources:

  1. Performance Measurement. The Chartered Institute of Management Accountants CIMA Report, 2008. – http://www.cimaglobal.com/Documents/ImportedDocuments/9_Performance_Measurement.pdf
  2. Budgeting // CIMA Topic Gateway Series No. 27, 2008. – http://www1.cimaglobal.com/Documents/ImportedDocuments/cig_tg_budgeting_mar08.pdf

Homework Assignments

Homework will be assigned weekly. You will be expected to study the books from the reading list, solve problems, conduct case studies, prepare and present a group project.

Grading

It is a pass/fail course. To get a pass, you should complete all the assignments.