This elective course covers accounting tools useful to consultants, as well as for students with an interest in a firm’s finance function, general management, or private equity. There will be a particular focus on performance measurement and management. Performance measurement is a key determinant of success for today’s companies that sell a wide range of products and services to a wide range of customers differentiated in their needs. While financial accounting (GAAP) information is a useful shortcut toward gaining some understanding of a firm’s financial health, consultants and managers need a more solid understanding of the firm’s strategy and mission, as well as disaggregated information that helps assess how the firm is performing along its strategic objectives. There is overlap between this course and the half-semester course “Financial Planning & Analysis (FP&A)” course. This course expands on many of the concepts taught in FP&A and supplements them with industry insights and guest speakers. For this reason, this course is mutually exclusive with the elective course “B8007 – Financial Planning & Analysis”. If you have taken FP&A, you will not be able to enroll in this course for credit. Please contact me immediately in case of such a conflict. The following specific topics will be addressed: • Profitability analysis to assess individual products • Customer relationship management using customer lifetime value (CLV) • Budgeting and variances • Performance evaluation for profit centers and investment centers • Performance-based pay: team incentives, relative performance evaluation, etc. • Corporate governance: the C-suite and the role of compensation consultants • The “War of Metrics”: Cash Flow, EVA, Balanced Scorecards, etc. • Innovative ways to deviate from GAAP rules to better measure value creation • Issues specific to multinational enterprises (MNEs), e.g., taxation • Industry-specific insights: performance measurement in key industries
Division: Accounting

Spring 2023

B8122 - 001