Financial Business Planning

Instructor:Olga Lvova
Updated:4 February, 2016

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 techniques 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 lectureHours of discussionHours of independent studyTotal numbers of hours
4135572

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. Building a Business Model
    • Planning and budgeting
    • Aims and objectives of planning
    • The structure of a business model
    • Differences between a business model and a business plan
    • Customer segmentation
    • Value proposition
    • Distribution channels
    • Income flow
    • Key resources
    • Key types of activity
    • Expense structure
    • Business model verification
  2. Preparing a Master Budget and Financial Budgets
    • The main forms of financial accounting: profit and loss statement, cash flow statement, and budget
    • Devising a master budget
    • Planning sales revenues
    • Calculating cost of goods sold
    • Material costs, labor costs, selling and administrative costs
  3. Assessing Investment Prospects of Business Projects
    • Tools of investment assessment: Net Present Value (NPV), Internal Rate of Return (IRR), Payback Period
    • Internal sources of finance
    • External sources of finance
    • Banks’ requirements for start up business loans
    • Devising a cash flow statement
  4. Peculiarities of Business Planning in Russia. Planning Innovative Business Projects
    • Influence of Russian macroeconomic environment on planning
    • Developing a business strategy in Russia
    • Key elements of a strategy, tools for developing a strategy
    • Key performance indicators
    • Benchmarking
    • Business planning for innovative companies (the case of Skolkovo).

Reading List

Required reading:

  1. Osterwalder, Alexander and Pigneur, Yves (2010). Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. Wiley

Recommended reading:

  1. Shim, Jae K., Siegel, Joel G. (2011). Budgeting Basics and Beyond (4th edition). Wiley.
  2. Begg, David and Ward, Damian (2004). Economics for Business. McGraw-Hill.
  3. Black, Geoff (2005). Introduction to Accounting and Finance. Pearson.
  4. Brealey, Richard, Myers, Stewart (2013). Principles of Corporate Finance (Chapter 29). 11th edition. McGraw-Hill/Irwin.
  5. Bobyleva, Alla (ed.) (2012). Finansovy Management. Problemy i resheniya. Urait.
  6. Brigham, Eugene, Ehrhard, Michael (2013). Financial Management: Theory & Practice (Chapters 10, 12). 14th edition. Cengage Learning.
  7. Kemp, Sid (2003). Budgeting for Managers. McGraw Hill Professional.
  8. Horngren, Charles T., Datar, Strikant N., Rajan, Madhav T. (2011). Cost Accounting: A Managerial Emphasis, 14th edition. Prentice Hall.
  9. Druri, Colin (2012) Management and Cost Accounting. 8th edition. Cengage Learning EMEA.
  10. Pearce, John, Robinson, Richard. (2012). Strategic Management. 13th edition. McGraw-Hill/Irwin.
  11. Arnold, Wiliam G. (2008). Performance Budgeting: What Works, What Doesn’t. Management Concepts.
  12. Parmenter, David (2010). Key Performance Indicators (KPI): Developing, Implementing, and Using Winning KPIs. 2nd edition. Wiley.
  13. Krasova, O. (2009). Budgetirovanie i kontrol zatrat na predpriyatii. Omega-L.
  14. Nikolaeva, O. (2008). Strategicheski upravlencheskij uchet. 2th edition. LKI.
  15. Rid, S., Shoerman, Kh. (2012). Finansovy direktor kak integrator bisnesa. Alpina Publisher.
  16. Khrutskiy, V., Gamayunov, V. (2007). Vnutrifirmennoe budgetirovanie. Nastolnaya kniga po postanovke finansovogo planirovaniya. Finansy i statistika.
  17. Accounting Forum. Elsevier. http://www.sciencedirect.com/science/journal/01559982
  18. Journal of Corporate Finance. Elsevier. http://www.sciencedirect.com/science/journal/09291199
  19. Journal of Economics and Business. Elsevier. http://www.sciencedirect.com/science/journal/01486195

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.