Internal Decision Making and Corporate Performance

Catalog description

This course explores the use of accounting information for internal planning, analysis, and decision-making. The main objective of the course is to equip you with the knowledge to prepare, understand, evaluate, and act upon the many financial and non-financial reports used in managing firms. Managing and evaluating companies requires financial and non-financial information about the firm’s products, processes, assets, and customers. This information is a key input into a wide range of analytical tools to support decisions: analyzing the profitability of various products, managing product-line portfolios, setting prices, measuring and managing the profitability of customers, making operational and strategic decisions, evaluating investments, investigating efficiency, and so on. The focus of this course is on information generated by internal accounting systems. Along the way, we will discover that many companies have not provided their managers with useful information. These managers have to rely on information systems designed years ago for very different business processes and with very different technologies. We will take a look at a number of pitfalls that these systems can induce and at the dangers of using these systems to make business decisions. We will also investigate some modern ideas on how an organization’s information system should be designed. To attain the right level of understanding, you will need to be familiar with the mechanics of the many techniques used to prepare management reports. But the emphasis in this course is very much on interpretation, evaluation, and decision-making.